The WTO and the millennium round: between standstill and leapfrog
The Third WTO Ministerial Conference in Seattle in November 1999 is expected to pave the way to the ninth multilateral round of trade negotiations, labelled Millennium Round (MR). Like the preceding Uruguay Round (UR), it will have the twin targets of preventing domestic measures from discriminating against foreign supply and of dismantling border measures such as tariffs and non-tariff barriers. The core challenge of the MR will be to defend the WTO framework against efforts to sacrifice its genuine target of guaranteeing and enforcing access to markets by compromising this target with other targets such as protecting the environment, workers' rights, foreign investors' rights and competition. The GATT experience with a contradictory and inefficient mixture of aid targets (special treatment for developing countries and least-developed countries) and trade principles (non-discrimination between all WTO member states) underlines the importance of clearly separating targets, instruments and responsibilities of actors through different institutional set-ups instead of forcing them into a single framework. This holds especially for the protection of the environment and of workers' rights, where existing frameworks should be used and/or new frameworks be founded. For competition and investment, existing elements of the WTO can be used to keep markets open and to level the playing field between foreign and domestic investors. Liberalising trade in services and enforcing free access to service markets through the General Agreement on Trade in Services (GATS) will be the most important concrete liberalisation objective in the MR. As the GATS principle is bottom-up (service-industry-specific liberalisation with many loopholes) while the GATT principle for goods is topdown (across-the-board cut of border measures), the best liberalisation results would be achieved if the top-down principle could be applied to services as much as possible. Linking services to goods as joint products bound to GATT rules and/or defining services as goods wherever possible (for instance, in e-commerce) could be instrumental to anchor the top-down principle in services. In traditionally highly protected sectors with special entitlements like agriculture and textiles (including clothing), the MR must counter efforts of big players like the EU and partly the US to play for time by postponing UR commitments to the latest possible date. In doing so, they will deliberately create an adjustment jam, which would trigger requests for further safeguards. Should the WTO fail to discipline the players in these sectors, frustration in developing countries can weld the vast majority of WTO members into a stumbling block against the MR. Further needs to reform the current WTO framework can be identified in disciplining mushrooming regional integration schemes, which undermine the most-favoured nation treatment principle, in dismantling still existing tariff escalation, which discriminates against manufactured goods exporters, in fundamentally redressing the abuse of contingent protection measures such as anti-dumping and safeguards and, finally, in solving the still pending issue of China's accession to the WTO. The MR without China refutes the WTO's claim to be a universal institution. In a mercantilist world, negotiation strategies matter. Notwithstanding the lack of a fast-track mandate for the US administration, it seems that the US together with Asian countries prefer sector-specific negotiations with a focus on agriculture, services, and government procurement. In contrast, the EU prefers negotiations on all issues in a socalled comprehensive round. Developing countries still hesitate to participate at all but their hesitancy can prove to be a promising strategy to push the EU and the US toward accelerating the implementation of UR commitments. All participants will experience that there are first-mover advantages and that leapfrogging technological progress in the cross-border movement of persons, goods and services will impose high costs on those who get stuck in old-style nitty-gritty trade diplomacy.
|Date of creation:||1999|
|Date of revision:|
|Contact details of provider:|| Postal: Kiellinie 66, D-24105 Kiel|
Phone: +49 431 8814-1
Fax: +49 431 8814528
Web page: http://www.ifw-kiel.de/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Frankel, Jeffrey A. & Stein, Ernesto & Wei, Shang-Jin, 1996.
"Regional Trading Arrangements: Natural or Super-Natural,"
Center for International and Development Economics Research (CIDER) Working Papers
233421, University of California-Berkeley, Department of Economics.
- Frankel, Jeffrey A & Stein, Ernesto & Wei, Shang-Jin, 1996. "Regional Trading Arrangements: Natural or Supernatural," American Economic Review, American Economic Association, vol. 86(2), pages 52-56, May.
- Jeffrey A. Frankel & Ernesto Stein & Shang-Jin Wei, 1996. "Regional Trading Arrangement: Natural or Super-Natural?," NBER Working Papers 5431, National Bureau of Economic Research, Inc.
- Jeffrey A. Frankel, Ernesto Stein, and Shang-Jin Wei., 1996. "Regional Trading Arrangements: Natural or Super-Natural?," Center for International and Development Economics Research (CIDER) Working Papers C96-059, University of California at Berkeley.
- Hiemenz, Ulrich & Weiss, Frank Dietmar, 1984. "Das internationale Subventionskarussell: Dabeisein oder Abspringen?," Kiel Discussion Papers 98, Kiel Institute for the World Economy (IfW).
- Bagwell, Kyle & Staiger, Robert W, 1998. "Will Preferential Agreements Undermine the Multilateral Trading System?," Economic Journal, Royal Economic Society, vol. 108(449), pages 1162-82, July.
- Alan Swinbank, 1999. "EU Agricultural, Agenda 2000 and the WTO Commitments," The World Economy, Wiley Blackwell, vol. 22(1), pages 41-54, 01.
- Bhagwati, Jagdish & Greenaway, David & Panagariya, Arvind, 1998. "Trading Preferentially: Theory and Policy," Economic Journal, Royal Economic Society, vol. 108(449), pages 1128-48, July.
- Beghin, John C. & Roland-Holst, David & Van der Mensbrugghe, Dominique, 1994. "Trade and Environment Nexus. Global Dimensions, The," Staff General Research Papers Archive 1589, Iowa State University, Department of Economics.
- C. Fred Bergsten, 1999. "The Global Trading System and the Developing Countries in 2000," Working Paper Series WP99-6, Peterson Institute for International Economics.
- Anne O. Krueger, 1995.
"Free Trade Agreements versus Customs Unions,"
NBER Working Papers
5084, National Bureau of Economic Research, Inc.
- Wonnacott, Ronald J, 1996. "Free-Trade Agreements: For Better or Worse?," American Economic Review, American Economic Association, vol. 86(2), pages 62-66, May.
- P. J. Lloyd, 1993. "A Tariff Substitute for Rules of Origin in Free Trade Areas," The World Economy, Wiley Blackwell, vol. 16(6), pages 699-712, November.
- Hoekman, Bernard & Saggi, Kamal, 1999. "Multilateral disciplines for investment-related policies," Policy Research Working Paper Series 2138, The World Bank.
- Anderson, Kym & Hoekman, Bernard & Strutt, Anna, 2001. "Agriculture and the WTO: Next Steps," Review of International Economics, Wiley Blackwell, vol. 9(2), pages 192-214, May.
- Piritta Sorsa, 1996. "Sub-Saharan African Own Commitments in the Uruguay Round - Myth or Reality?," The World Economy, Wiley Blackwell, vol. 19(3), pages 287-305, 05.
- André Sapir & Rolf Langhammer, 1987. "Economic impact of generalized tariff preferences," ULB Institutional Repository 2013/8090, ULB -- Universite Libre de Bruxelles.
When requesting a correction, please mention this item's handle: RePEc:zbw:ifwkdp:352. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.