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Bilateral and regional free trade initiatives: political and sectoral issues

The disagreement between RTAs and the WTO from a gender perspective

Authors: M. Iorio; EQÜIT Institute
Publisher: International Gender and Trade Network , 2008

The acceleration of bilateral and regional initiatives pushes further the existing asymmetries between developed and developing countries (DCs). This working paper deems that these initiatives create further constraints on developing countries’ capacity to promote socially and gender-sensitive strategies. The initiatives themselves raise two questions:

  • do they support trade as a means for development, whereas they often link trade to political and investment issue?
  • what is their real impact on DCs' leverage in multilateral negotiations?
The paper defines 3 objectives for itself:
  • highlighting systemic issues that can be posed by the move toward regionalism
  • pointing out systemic and rules-related dangers of regionalism from a gender perspective
  • exposing main policy guidelines on regional initiatives of the European Union and the United States
Concerning the multilateral trading system (MTS), its evolution could be the reason why the stronger partners prefer to make deals outside of its context. However, issues of particular interest to (DCs), such as subsidies in agriculture can only be dealt with in multilateral negotiations. Developed WTO Members continue engaging in regional trade agreements (RTAs), which are mostly "WTO plus" and tend to link trade to political cooperation. In aggregation, the paper highlights the following political issues:
  • RTAs likely lead to erosion of negotiating the development-related aspects of the Doha Development Agenda (DDA)
  • RTAs result in a great heterogeneity and inconsistence at the national policy level
  • using competition measures in RTAs intra-trade where anti-dumping measures would apply to third parties creates a dual system
  • technical barriers to trade (TBT) increase as a result of RTAs, particularly in regard to their potential impact on third party trade
  • deciding the right time for the notification of an RTA
  • the possible confliction between dispute settlement provisions contained in the new generation of RTAs, and the existing international rules
The paper also covers sectoral issues. Starting with agriculture, the paper questions the committed reduction of domestic support and export subsidies of the WTO in the context of RTAs. Then it highlights the absence of multilaterally agreed rules of origin. The paper notices that RTAs can liberalise services more through the opening of local service providers with foreign ones. Moreover, from a sectoral standpoint, RTAs raise a number of issues that negatively impact both gender-sensitive development and developing countries’ policy space.

Finally, the paper summarises the international trends resulted from the Doha Round suspension as follows:
  • the emergence of developing countries’ coalitions
  • the spreading of RTAs, motivated by their quicker correspondence to the product cycles
  • fear of losing market shares by export-oriented countries
  • the desire by economic powers to use RTAs as political tools