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South-South trade

Briefing/policy paper

Written by Sheila Page

Briefing/policy paper

The EU, US, and other developed countries have repeatedly insisted that the advanced developing countries should offer preferences to the Least Developed (and possibly others)
as part of any Doha deal. In particular, they suggest this as offering compensation for preference erosion (see paper Preference erosion: helping countries to adjust)or in return for better access to developed countries.* The demands have been directed particularly at the G20, the negotiating group of major developing countries. This suggests that the targets are
China, India, and Brazil, although these are not the highest income countries in the developing category. To exclude China and India from some preferences could be justified because their size increases the ‘cost’ (in mercantilist terms) of offering access to them. It is possible, if they consent, that even arrangements
which impose costs on them (through trade diversion by favouring other low income countries) would be acceptable, if their size makes external markets less important to them. But asking them to open their markets is justifiable only if this would be a significant benefit to other developing countries.

Sheila Page