Post-Seattle blues: whither the WTO?

Can the WTO recover momentum after the debacle of Seattle? Are the ideals of multilateral trade dead? Should the WTO get embroiled in contentious issues of debt, poverty, labour standards and the environment? How can developing country members get more involved in its deliberations?

A report from the University of Nottingham’s Centre for Research in Development, Instruction and Training identifies the reasons for the failure of Seattle and asks whether there is a danger that the WTO is trying to do too much, given the modesty of its resources and the diversity of positions of its members.

Developing countries are critical of the Uruguay Round for several reasons:

• The south’s share of total welfare gains have been nowhere near the expected $86-$122 billion.
• Benefits from textile and clothing liberalisation have only been modest.
• In agriculture and manufacturing gains have been reduced by northern anti-dumping measures and special tariffs.
• Clauses requiring developed countries to give special attention to developing countries’ needs are felt to be exhortations lacking enforceability.
• Transitional periods prior to full adherence to the WTO Agreement are said to be too short.

Was it premature at Seattle to push the WTO agenda so far? This CREDIT report suggests it was naive to expect agreement over trade and related issues - those linking trade with competition, investment, environment or labour standards. Attempts to link WTO trade sanctions to non-application of ILO labour standards did more than anything else to break up the meeting.

Is the WTO at risk of marginalising itself? Members are turning to regional trade agreements. Developed country members are tempted by the idea of WTO-plus, agreeing a higher level of rights and obligations that further exclude the south from the benefits of globalisation.

Other points in this wide-ranging report include:

• Signing up to WTO is not cheap. Implementing the WTO Agreement on Custom Valuation would cost as much as some countries total development budget.
• The WTO’s Dispute Settlement Body has been a (qualified) success.
• Of the 55 new WTO members who attended Seattle from developing or transition countries, 40 are too poor to afford permanent representation in Geneva.

The report warns of the consequences of a return to autarchy or anarchy in trade. Recommendations to mitigate the negative effects of liberalisation and boost the chances of launching a new round of trade talks include the need for the WTO to:

• Be more transparent and allow scope for voicing of civil society concerns.
• Recognise concerns that many issues may be beyond its remit and involve a wider range of stakeholders in negotiations.
• Rules on anti-dumping, balance of payments, infant industry protection and other measures legitimising trade intervention need to be overhauled.
• Increase its modest technical assistance budget to help southern members meet WTO requirements.
• Explore ways to enable developing countries to participate in e-commerce.

Source(s):
‘Dolphins, turtles, mad cows and butterflies, a look at the multilateral trading system in the 21st century’, CREDIT Research Paper #00/16, Centre for Research in Economic Development and International Trade, University of Nottingham by Sam Laird, May 2000 Full document.

id21 Research Highlight: 2 October 2001

Further Information:
Sam Laird
E. 8075
DITC/UNCTAD
Palais des Nations
1211 Geneva 21
Switzerland

Tel: +41 22 917 5760
Contact the contributor: Sam.Laird@UNCTAD.org

UNCTAD, Switzerland

CREDIT, University of Nottingham, UK

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'Mega trading blocks: friend or foe of free trade?'

'Signing up to the WTO'

WTO

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WTO Watch focuses on trade policy analysis