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Stiglitz: “Doha is not a development round”
8-9/2004
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[ Trade policy ]
Stiglitz: “Doha is not a development round”
“It is wrong to characterise the Doha agenda, especially as it has evolved over the past two years, as a development round. Recent negotiations have not only failed to push an agenda that would promote development; they have included a host of issues that are of tangential interest, or even detrimental, to developing countries.” Former World Bank chief economist and Nobel Prize laureate Joseph Stiglitz draws this conclusion in a study he co-authored with Andrew Charlton of Oxford University for the Commonwealth Secretariat. It was published in mid-June. Both economists recommend redrafting the agenda of the Doha round and giving the most important topics for the developing countries top priority.
The basic precondition for a true development round is the readiness of wealthy countries to make unilateral concessions to the developing countries. “Trade negotiations must begin from the premise that the less developed countries are deserving of special and differential treatment,” the study says. This means that trade agreements may not curb the political leeway of poor countries. Therefore, developing countries must be permitted, for example, to temporarily subsidise and protect local enterprises with the aim of building up new industries.
For both authors, the issue of international labour migration shows that the developing countries’ interests have little significance in the Doha Round. The topic barely gets a mention in the negotiations, although more freedom of movement for unskilled workers would be highly beneficial for the poor countries. Instead, according to Stiglitz, all that is discussed is the liberalisation of capital markets and financial services. Other important topics for development are the removal of trade barriers, like tariff escalation, for manufactured products from developing countries and the abolition of all agricultural subsidies in the advanced countries.
The authors call for a series of institutional reforms in international trade policy, in order to structure it in a more development-friendly fashion. Negotiations in the World Trade Organisation have to be more transparent and a new permanent advisory body should be created to support the developing countries in expressing and realising their interests. Furthermore, Stiglitz and Charlton suggest setting up an independent unit in the WTO secretariat to assess the development impact of trade policy measures and to formulate alternatives if necessary.
Meanwhile the Commission of the European Union plans to redraft the European General System of Trade Preferences (GSP) which provides developing countries with preferential access to EU markets. The GSP for the years 2006 to 2015 will especially favour the poorest countries, according to EU commission communication issued early July. However, some restrictions are also included. The Commission suggests, for example, to make preferential market access for specific products dependent on that product’s share of the Community market. The current GSP also accounts for the development index of the exporting country. (ell)
On the Internet:
http://www.thecommonwealth.org
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