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Developing Countries in GATT/WTO Negotiations

Working papers

Written by Sheila Page

The growing role of developing countries in the WTO negotiations since the Tokyo Round suggests that the most power-based or pessimistic views of the international regime, that it is entirely determined by the interests of the most powerful, and that the outcome of international negotiations cannot be influenced by choices made by weaker countries is not correct. While the role of the largest countries remains central, they cannot impose outcomes against the will of all other counties, and differences among them offer further opportunities to affect the outcome.

The question of when and how to participate in international negotiations is therefore a real one for countries to face. If they identify and determine their own priorities, and their strengths and weaknesses, they can include the costs and benefits of participation in international negotiations as part of their economic strategy. Within these, they must again define their priorities: all countries, even the largest, have found that following all the subjects under the WTO negotiations impossible. The countries that have put a large share of limited resources into WTO negotiations have done so after making such assessments.

As the scope of the WTO extends into more areas of rules and economic activity, the number of areas in which a country needs to be ‘competitive’ will increase, and there will be an increasing number of areas in which it needs to choose between breadth of coverage and depth. Competitive here means to have a standard of expertise not equivalent to the most well-resourced countries, but at least no more removed from this than its resources require it to be, on average, on all areas of expertise.

Countries need, for trade negotiation as for other aspects of development, an effective way to coordinate policy at the national level. In addition, they need long term experience and expertise in the subject and in the process of international negotiations. Long-term commitment to participation is therefore required.

Even small countries can achieve some successes on their own, if they identify their objective clearly and use the negotiating or enforcement tools of the WTO effectively, But even large countries cannot achieve major changes against opposition alone (as the US discovered in Seattle), so that awareness of other countries’ interests and an ability to identify common interests is important.

Delegations without national support or interest have considerable freedom to act, to form alliances, and to accept exclusion from decisions (as long as this is not excessively publicised). Delegations with a clear mandate, from their local government, perhaps in consultation with economic or other interests, may have much less flexibility, but are less likely to conform to the more powerful. They must have much greater formal participation, to allow them to demonstrate that they participated actively and therefore that any decisions, even if against them, are legitimate. Even the US, which has had this national support and restraint since at least the Tokyo Round allows some flexibility to the delegation, so that the result of countries’ being subject to national objectives is not necessarily deadlock, but deadlock may now be more likely. (Too much participation by too many countries, and too rigid national objectives could be added to the list of reasons for the Seattle failure.)

The problems of participation faced by developing countries are not irrelevant to the principal countries in the WTO. They have an interest in the stability and legitimacy of the system, which requires that all members accept that decisions are made in an appropriate way. The establishment of formal programmes of meetings in the Uruguay Round alongside the informal meetings of the Tokyo Round was an advance, but there is still an uneasy balance of formal, officially informal, and completely informal meetings. With 142 members instead of the fifty active of the Tokyo Round, and the demonstrated ability of the non-major countries to block decisions, if not to initiate them, the formal procedures probably will acquire increasing weight (as they did in the agenda-forming process pre-Seattle). While ‘really’ informal meetings will always have a place, whether among powerful countries or those with an interest in a particular specialised area of negotiations, the intermediate ‘informal’ meetings may no longer be useful: they are treated as a substitute for formal consultation, but without providing a mechanism that guarantees that all interests are consulted. Thus they fail to provide legitimacy, but they have become too rigid in their composition to offer the advantages of ad hoc informal meetings. The attempt to use one, the Green Room process, to resolve major differences, not merely to identify possible solutions or resolve technical differences, triggered a loss of confidence in the system. The failure to adapt the informal WTO central procedures to use the informal groups among developing country members suggests that the informal procedures have become too rigid to offer the principal advantage of informality: flexibility. Although ‘informal consultations’ to identify a way into further negotiations were used again in 2000-01, the delegations of the smaller and weaker countries made it clear that they did not consider them legitimate. Nevertheless, the management of the WTO still believed that there was a ‘delicate balance between efficiency and inclusiveness’ (WTO news 31 October 2000), rather than that inclusiveness was necessary for an efficient solution. It is easier to find and learn written rules and procedures than informal ‘custom and practice’. Countries that are new and inexperienced will therefore be more disadvantaged by a system with large informal elements. As increasing numbers of developing countries become experienced, this becomes less of a developed/developing issue, and there are efforts by the experienced to induct the inexperienced, but it is odd for an international organisation to support a discriminatory system.

Extending the scope and detail of WTO rules places strains on its own implementing and negotiating procedures, and increases the potential for opposition in the member countries. The present structure of the WTO and the present lack of support for international trade within countries may restrain further expansion.

The emergence of better-informed policy positions in the course of the Uruguay Round discussion of services and the improvements seen in competence of individual country delegations in the Round suggest that long negotiations are more likely to produce informed outcomes for new subjects or new participants. The pressure for limited duration Rounds may not be in the interests of developing countries, or of any countries in the new areas.

Sheila Page