Are multilateral negotiations doomed to fail? Flashcards
The Doha round ?
Seattle, Washington
The first time all the countries gathered + November 2001, the round was launched. At this time, this round was not welcomed by the population, numerous demonstrators protested against the WTO
Two main arguments of the demonstrators:
- WTO trade policies would threaten food safety
- They would threaten the environment
What had been achieved? (WTO)
- they lowered tariffs from 6% to 3% + The agreement has been extended to services and intellectual property
What still needed to be done:
- find an agreement on agricultural policies (farm trade), The multi fiber arrangement was still implemented and the goal was to put an end to it. It stopped in 2004
The countries wanted to extend services liberalization and wanted to phaseout trade related investment measures
Who are the key players?
Developed countries , the developing countries, least developed countries , emerging countries
Developed countries?
Not mainly based on agriculture but also services, high income per capita, high standard of living, high human development index
Includes USA, Japan, France, the UK
What did these countries expected of the Doha round ?
Wanted to further liberalize trade (especially the USA) + wanted the WTO agreement to contain new laws on labor and the environment because they feared that globalization would lead to a “race to the bottom” (wages would be lower and lower, more competition,labor rights reduced)
What did emerging countries thought about that proposition?
Other countries disagreed because it is precisely the lack of rules on labor and on the environment that are partly responsible for the competitive advantage (cheap labor, long working hours, child labor)
More rules on the environment: such rules would slow down their economic development.
Almost all countries apart from the USA considered that linking trade to labor rights could be an excuse for protectionism that is to say a way for Europe and the USA to protect their economy — they already had labor rights so it would not damage there competition, and would hurt the competition of the emerging countries
Developing countries?
A low GDP or income per capita, high proportion of agriculture, countries that are considered is poor and are seeking for economic development.
This definition is important since they can benefit from preferential treatments and also they are given more time to adjust to WTO
What do the developing countries want?
Just after the Uruguay round, these countries complained that they could not comply with some commitments imposed by the Uruguay round (e.g: they had to enforce food safety standards, respect the cold chain, rules about hygiene — not able yet)
They needed more time and wanted their obligations to be eased. They wanted to put an end to agricultural restrictions (all trade barriers linked to agriculture: quotas, subsidies and tariffs)
The least developed countries?
The UN’s definition: Low income countries confronting severe structural impediments to sustainable development. They are highly vulnerable to economic and environmental shocks and they have a low level of human assets.
What is needed for a round to be successful?
You need a transatlantic deal
You need a north south agreement, otherwise no agreement
Why was it so hard to find an agreement ? (For the Doha round)
It started in 2001 and lasted more than 15 years, this is why some people considered that it was a failure and no agreement would ever be reached.
1) Boues of contention: They wanted more rules + agriculture.
Developed countries (Europe and USA) were supposed to lower their agricultural subsidies and import tariffs on agricultural products (this is what developing countries asked for) In theory they agreed to do that but what happened was that agricultural lobbies put pressure on Europe and the USA because they were afraid that cheap foreign food imports would be more competitive and that those foreign products and companies would take their market share
Why do lobbies have so much power?
- Lobby groups usually finance the campaign of candidates
- to frighten the government (if there are cheap products so our products would not be competitive anymore so a lot of people lose their job)
US agriculture relies on GMO’s (to keep prices low + more competitive) whereas Europe bans new genetically modified crops and meat from animals treated with hormones)
What is the problem with the definition between emerging countries and developing countries?
There is not one official definition, and the WTO does not define what a developing country is. What happens is that it works by self identification, the countries themselves choose what they are. Problem is that some countries transformed dramatically during the round and have become huge economic powers (China, India), but the problem is they still claim themselves as developing (as a developing country you can get advantages). This decision can be challenged by other double to members, however there is a definition the world bank: “Countries with per capita income of less than $12,271 are considered as developing countries. For China it could be considered as a developing country because $7,000)
The conflicts between members (e.g: in 2013 even though a lot of experts had lost hope, an agreement was about to be reached at the Bali conference)
