Our Excellence - Trade & Development

Project

WTO impact on development & society

Core Development Areas

Countries including - least developed countires (LDCs) small vulnerable economics (SVEs) trade & transfer of technology, intellectual property, trade, debt & finance

Introduction

The WTO is a multilateral organization whose rules have a powerful effect on the trade and domestic policies of member states and on the livelihoods and lives of their people. In today's globalize world the concept of market transformation is most dynamic. The concept of ONE MARKET is becoming a reality with faster communication and transportation means. The economies are much more interdependent in today's world in comparison to past. The commodities and services are crossing global boundaries more rapidly in today's highly competitive world. In this scenario the role of World Trade Organization has become very important.

With about 150 countries now the member of this organization, the importance of the working of WTO is becoming essential for further growth of globalize trade .It has been observed that the gap between the developing and developed countries is becoming wider, as the negotiations at various meetings collapsing, with both developed and developing countries trying to project their own economic interests.

The issues like agriculture, environment, labor etc has brought the developed and developing countries dialogue to standstill. It is very important that the myths and false assumption between the two has to be removed and the deadlock should be brought to an end.

The newest and perhaps most important phenomenon in the globalization process is the emergence of trade agreements as key instruments of economic liberalization and as mechanisms used by the major countries to have disciplines and rules placed on developing countries in a wide range of issues. Trade agreements, that are legally-binding and have strong enforcement capability, have become the most important vehicles for disseminating and implementing economic and social policies across the world, policies that have been planned by the few developed countries for developing countries to follow. The World Trade Organization, which is the organization of the multilateral trading system, has in fact become the main vehicle of choice of industrialized countries for organizing and enforcing global economic governance.

IIME will design, recommend and implement methods, procedures and guidelines by which the developing nations can equally be benefited by the WTO as the developed countries

IIME focus on -The Doha Development Agenda

The Doha Development Agenda has put the needs and concerns of developing countries to the fore. This is central to IIME objectives, which is committed to achieving an outcome that will bring a significant contribution to the development prospects of the WTO membership. In this respect, achieving fundamental reform of world agricultural trade, commercially significant market access increases for goods and services, and binding rules for trade facilitation will be key. The strengthening of trade rules, which will increase transparency, predictability and stability in the trading system, will further enhance growth and prosperity opportunities that will arise from such outcomes.

IIME assistance to least-developed and developing countries will assists these countries to expand their participation in the global economy whereby enhancing their economic growth and poverty reduction strategies

IIME Focus- Millennium Development Goals (MDGs) were formulated at the United Nations following the Millennium Summit of 2000. They comprise goals and targets that government leaders have collectively agreed on and are committed to at various summits and meetings.

The WTO has effects on several or all of the MDGs and their targets. The most obvious is Goal 8 (Develop a global partnership for development), with Target 12 (Develop further an open, rule-based, predictable, non-discriminatory trading and financial system), Target 13 (which includes tariff- and quota-free access for exports of least developed countries (LDCs)), and Target 17 (…provide access to affordable essential drugs in developing countries).

Also very relevant are Goal 1 (Eradicate extreme poverty and hunger) with targets of halving the number of poor people and the proportion of people suffering from hunger by 2015; and several other goals that deal with health (Goal 4: Reduce child mortality; Goal 5: Improve maternal health; and Goal 6: Combat HIV/AIDS, malaria and other diseases) and education (Goal 2: Achieve universal primary education). Recent proposals and developments in the World Trade Organization (WTO) may have an impact on the realization of the Millennium Development Goals (MDGs).

IIME will undertake an in-depth description or analysis of Goal: 2 Achieve Universal Primary Education and provide solutions for Basic Education to all, in this context IIME plans to open International schools in developing countries with collaboration of Canadian schools in the year 2007,so that the under privileged can be provided with basic education

IIME focus- Problems of Implementation and the Lack of Progress on the Development Issues in the WTO

After the WTO was established, policy makers and analysts in many developing countries became increasingly concerned about the implications and emerging impacts arising from the implementation of the Uruguay Round agreements. They became increasingly aware that many of the agreements contained flaws and were imbalanced in that developing countries would have to undertake more obligations, and that the benefits would not be equitably distributed, and moreover the developing countries would in many cases suffer costs or losses. These problems were compiled by an influential group of developing countries (informally known as the Like Minded Group) and first tabled in 1999 as "implementation issues" in the WTO.

There are two sets of implementation problems that analysts and policy makers of the developing countries have found. Firstly, the benefits they anticipated did not materialize as the developed countries failed to implement their obligations in the manner expected of them. Secondly, the developing countries face many problems themselves in having to change domestic policies whilst attempting to fulfill there own Uruguay Round obligations.

On the first set of problems, the developing countries' main expectation was that the developed countries would very significantly open their markets in agriculture and textiles, the two main sectors in which the developing countries have an export advantage. The developing countries had made major concessions in agreeing for decades that agriculture and textiles would remain outside the general free-trade rules of GATT, thus allowing the developed countries to protect themselves. It was agreed during the Uruguay Round that the two sectors would be integrated into the system. However, up to now, the high protection has remained.

In agriculture, tariffs on many agricultural items of interest to developing countries are prohibitively high (some are over 200 and over 300 per cent). Domestic subsidies in OECD countries have risen from US$275 billion (annual average for base period 1986-88) to US$326 billion in 1999, according to OECD data (see OECD 2000), instead of declining as expected, as the increase in permitted subsidies more than offset the decrease in subsidy categories that are under discipline in the WTO Agriculture Agreement. There has been little expansion of market access to developed country markets.

In textiles and clothing, the developed countries agreed to progressively phase out their quotas over 10 years to January 2005, but they in fact retained most of their quotas until near the end of the implementation period. Genuine liberalization was avoided by the device of choosing in the first phases to 'liberalize' mainly products that were not actually restrained in the past, thus leaving quotas on the bulk of significant products, which would be eliminated only at the end of the 10-year transition period. This, together with the absence of structural adjustment in the North to prepare for the ending of the quotas, has raised doubts as to whether other trade measures (such as anti-dumping and safeguard measures) will be taken, besides high tariffs, to continue the protection of this sector.

Tariff peaks and tariff escalation continue to be maintained by developed countries on other industrial products in which developing countries have a manufacturing export capacity. The supposed improvement of market access through tariff reductions has to some extent been also offset by non-tariff barriers in the rich countries, such as the use of anti-dumping measures and the application of food safety and environmental standards.

On the second set of implementation problems, the developing countries are facing difficulties in having to implement their own commitments made in several WTO agreements. These problems include:

• The prohibition of trade-related investment measures and subsidies, making it harder for developing country governments to promote domestic industry
• Import liberalization in agriculture, threatening the viability and livelihoods of small farmers whose products face competition from cheaper imports, many of which are artificially cheapened through massive subsidies
• The effects of a high-standard intellectual property right (IPR) regime that has led to exorbitant prices of medicines and other essentials, to the patenting by Northern corporations of biological materials originating in the South, and to higher cost for and lower access by developing countries to industrial technology
• Increasing pressures on developing countries to open up their services sectors, which could result in some local service providers being rendered non-viable

The recent negotiations (which began in 2001) for a new round of industrial tariff cuts are also likely to result in steep tariff reductions, which may unleash a level of import competition upon domestic industries that many may not be able to stand up to.

IIME will undertake an in-depth analysis into issues of implementation faced by the developing countries especially by the Agriculture sector and small-scale industries. IIME will offer Diploma programs to students from around the world so that they can implement education in their countries and achieve the benefits of WTO.

IIME Focus - Intellectual Property Rights and TRIPS

Many developing countries had tried to resist the entrance of intellectual property as a subject in the Uruguay Round, and then tried to limit what they saw as the more damaging aspects of the proposals coming from developed countries. But eventually the developed countries succeeded in getting most of what they had been after in the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement.

TRIPS have instituted what is basically a "one-size-fits-all" (or rather a minimum-but-large-size-for-all) system of IPRs, where high minimum standards are set for countries at differing levels of development. The level of IPR protection set by TRIPS is far higher than the levels that the presently developed countries themselves had when they were developing.

There are inherent imbalances in the TRIPS Agreement. Persons and enterprises in the developed countries own most of the world's registered intellectual property. A strengthening of intellectual property rights (IPRs) would thus benefit these countries. Thus, the benefits of TRIPS are inherently skewed to the rich countries, whilst the costs (in terms of royalties paid, and of high prices charged) are mainly borne by developing countries. Thus, there is no reciprocal benefit sharing under TRIPS.

IIME focuses on research in areas on measures to be developed for TRIPS to become more balanced in its rules and implementations, how Intellectual property rights can be can be developed and benefits and profits be shared with the original holders of that knowledge.

IIME focus - The Industrial Sector

Regulating trade in manufactured products has been the traditional core function of GATT and the WTO. The multilateral trade system till now had by and large allowed developing countries the flexibility to choose the scope of tariff bindings (the number of products whose tariffs are to be bound) and the levels at which to bind their tariffs. Even then, many developing countries have significantly reduced their applied industrial tariffs, even if they maintained relatively high bound tariffs, often under the influence of loan conditionality of the international financial institutions. As a result, many countries have experienced a "deindustrialsation" process, whereby cheaper imported goods displace local goods, causing the closure or loss of business of local industries, and significant retrenchments of workers.

IIME - Conclusion

A recent and comprehensive study by B.L. Das (1997) concludes that the Uruguay Round "has been a unique negotiation in which most of the concessions have been made by developing countries without getting anything but meager concessions in return. It is not because the negotiators or trade policy officials of developing countries ignored the interests of their countries... The results are in fact characterized by the massive gap between the economic and political strengths of developed and developing countries." The study analyses the severe overall imbalance in concessions made by South and North and how the recent trend in WTO enhances the imbalance in various areas: the dispute settlement system, market access, balance of payments and safeguards; subsidies and dumping; specific sectors like agriculture and textiles; the new issues of services, and IPRs; neo-protectionism; and commitments of developed countries. Referring to the WTO Agreements, Nayyar (1995) states: "It would seem that the institutional framework for globalization is characterized by a striking asymmetry. National boundaries should not matter for trade flows and capital flows but should be clearly demarcated for technology flows and labor flows. It follows that the developing countries would provide access to their markets without a corresponding access to technology and would accept capital mobility without a corresponding provision for labour mobility. This asymmetry, particularly that between the free movement of capital and the unfree movement of labour across national boundaries lies at the heart of the inequality in the rules of the game for globalization in the late twentieth century. These new rules, which serve the interests of transnational corporations in the process of globalisation, are explicit as an integral part of a multilateral regime of discipline."

IIME focuses on areas of Educational research and plan to develop a Educational research center whereby students from underdeveloped and developing countries be educated on policies of WTO and how their countries can be benefited the maximum by the latest trade negotiations, how they can develop their own economies and then also have the benefits of the globalization.

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