Does the GATT/WTO Agreements effectively protect the interests of the developing country members of the WTO - Essay Example

Download file to see previous pages Developing countries have achieved greater access to developed countries’ markets and to other developing countries’ markets via the reduction of tariffs and other trade barriers as promulgated by the various agreements of the General Agreement on Trade and Tariffs (GATT) and its successor, the World Trade Organization (WTO). Moreover the WTO’s Most Favoured Nation (MFN) doctrine has enabled developing countries to gain access to some sectors in other WTO countries without having to reciprocate. Even so the reduction of tariffs and non-tariff trade barriers in some sectors that are of significant interest to developing countries have been insignificant. Even more troubling for developing countries is the cost implicit in implementing WTO agreements in terms of administration, legislation and compliance is too great and becomes a financial burden for many developing countries.
This research study therefore argues that although the WTO multilateral trade framework has served to reduce some trade barriers and has stimulated world trade in several sectors, the various GATT/WTO agreements have not served to protect effectively protect the interests of developing countries. This is particularly so in the areas of services and agriculture, which is of significant interest to developing countries. This study will demonstrate the ineffectiveness of the GATT/WTO agreements in protecting the interests of developing countries by analysing the main agreements.
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The popular belief among developing countries was that internationalization would compromise any hope that they had of becoming industrialized as industrial countries would not be amendable to new entrants.1 As a result, for most of the post-Second World era, developing countries were at best, minimal participants in GATT.2 By the 1980s more and more developing countries began to accept the merits of liberalized trade and supported the multi-trade system over bilateral trade systems because the latter left them vulnerable to pressure from the larger and more developed trade partner.3 This new shift in attitude among developing countries gave way to increasing GATT membership among developing countries. However, developing countries insisted on preferential treatment on the basis of their limited resources and in particular their difficulties with balance-of-payments which were perceived as a significant barrier to trade liberalization and economic integration.4 Thus the principle of MFN as the rule and special and differential treatment for developing and least developed countries as the exception was imported to the WTO from GATT when the WTO was formed in 1995.5 On the surface, it appears that developing countries have fared well under the WTO system. From the 1980s onward developing countries have increased exports in manufactory products demonstrating an increase from 10% to 20%. Moreover, more than one third of the world’s foreign direct investment (FDI) is directed to developing countries.6 Still there is evidence that the interests of developing countries are still marginalized within the WTO multilateral trade framework. For instance, Subramanian and Wei reported that as of ...Download file to see next pagesRead More