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The political Economy of WTO with special reference to NAMA Negotiations

Shafaeddin, Mehdi (2008): The political Economy of WTO with special reference to NAMA Negotiations.

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Abstract

The dissatisfaction of developing countries with the new Trade Round surfaced first in the WTO meeting in Seattle in autumn 1999. The Round was finally launched in Doha in 2001. Nevertheless, since the, the negotiations has faced with difficulties and deadlocks. The author argues that such difficulties are rooted in the economic philosophy behind the design of GATT/WTO rules and in their implementation by developed countries. The interrelated issues of conflict of ideology/interests and imbalances in the power relationship between developing and developed countries are the main cause of the inherent bias in the world trading system against developing countries. Such bias prevailed right from the time of the inception of the Breton Woods System as an alternative to the Keynes’s proposal and the Havana charter. The combination of these factors has been reflected in a number of contradictions, double standards and asymmetries not only in GATT/WTO rules in favour of developed countries and their large corporations. It has also influenced the negotiation of developed countries with developing countries during the so-called “Doha Development Round” The author refers to the particular example of negotiation on NAMA, in some details, to highlight inconsistencies between the objectives/spirit of the agreed text of the Doha Round and subsequent proposals made by developed countries. If these proposals were to be agreed upon they would limit policy space of developing countries necessary for their industrialization. It may, in fact, lock many of them in production and exports of primary commodities and at best, resource-based and assembly operations. He further argues that unless these asymmetries are addressed, there will be a great risk of the collapse of the international trading system with its adverse socio-political consequences for the international community. Drawing on the experience of successful early and late industrializers and the failure of recent across-the-board and universal trade liberalization, he proposes the necessary changes in WTO rules commensurate with industrialization and development.

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