Would Developing Countries Gain from Inclusion of Manufactures in the WTO Negotiations?

Paper prepared for the World Bank's Conference on Developing Countries and the Millennium Round, Council Room, WTO Secretariat, Centre William Rappard, Geneva, 19-20 September. The importance of manufactures trade to the developing countries has increased dramatically since the early 1980s, and developing countries’ reliance on each others as markets has also risen sharply. Developing countries face disproportionately high trade barriers in manufactures and barriers to their manufactures exports account for around 70 percent of the total barriers faced by their exports. The inclusion of manufactures trade in the WTO 2000 negotiations is particularly important for developing countries, who would benefit both from improved market access and through greater domestic efficiency. In fact, developing countries capture a majority of the benefits (75%) of manufacturing liberalization. In contrast, comparable cuts in agriculture and services benefit the high-income countries relatively more since only one-quarter and one-third, respectively, of the global benefits accrue to developing countries in these two cases.