International trade is essential for developing countries: all
economically successful developing countries since World War II have
achieved such success through international trade. It is imperative that the
regulatory framework for international trade, currently under the auspices
of the World Trade Organization (WTO), enables developing countries,
presently making up a large majority of the WTO, to adopt effective traderelated development policies. However, the current regulatory system
exhibits a “development deficit”, with its provisions preventing the adoption
of key trade-related development policies. This article discusses the problems
with the current regulatory system and proposes specific regulatory and
institutional reforms to better facilitate economic development.
The recent failure of the World Trade Organization (WTO) to strike a deal on
customs rule due to serious opposition by India illustrates the challenges that
the international community faces in establishing universal trade practices. In
December 2013, WTO member countries (Members) negotiated a major agreement
to streamline customs procedure, whose purpose is to facilitate international trade,
and they were expected to ratify the agreement. However, India stated that it would
veto it unless the deal includes more concessions on crop subsidy and stockpiling; ie
developing countries, including India, attain more regulatory freedom to subsidize
and stockpile crops for food security without breaching their international obligation
under WTO disciplines. India’s objection concerns what trade rules and concessions
are necessary to protect the economic interest of developing countries, which has
been a core agenda at the latest trade negotiation round, namely “Doha Round”.
International trade being of essential importance to the economic development
of developing countries, rules of international trade have a significant impact on the ability of developing countries to adopt efficient development policies.
current international trading system, represented by the WTO, does not adequately
address the development concerns of developing countries, and the rules of
international trade (WTO disciplines) applying to all WTO membership
facilitate their economic development. The Doha Round
was launched in 2001
with a view to promoting the development interests of developing countries, but its
progress has been sluggish, reflecting large gaps in positions on development issues
between developed and developing countries.
Even if the current Doha Round is concluded successfully, with its negotiation
agendas and objectives
met in the final negotiations, it would not be sufficient
to fill the regulatory gap in the current WTO system for development facilitation
through international trade, nor does it address the fundamental problem and
imbalance in the current organizational structure of the WTO. The negotiation
agendas and mandates of the Doha Round are not sufficient to bring about the
kind of reform necessary to put right deficiencies in the regulatory framework and
in the institutional apparatus of the WTO. Reform will have to be considered and
discussed in a subsequent round.
This paper, based on the author’s previous works,
provides a brief account
of the “development deficit” in the regulatory framework of the WTO and its organizational apparatus. It also presents reform proposals to meet the development
needs of developing countries, as mandated by the WTO Agreement itself.
next section examines the importance and relevance of international trade and trade
rules for economic development. Section 3 highlights deficiencies in the current
regulatory framework and proposes a set of development-facilitation provisions,
called the Agreement on Development Facilitation (ADF). Section 4 discusses the
“development deficit” in the current WTO structure and proposes organizational
reform. Section 5 presents some conclusions.