Transcript Security Scenarios And The Global Economy

NS3040
Fall Term 2014
WTO: Cancun Conundrum
Cancun Conundrum I
• Robert Looney, The Cancun Conundrum: What Future for
the World Trade Organization (WTO), Journal of Third
World Studies, Fall 2004
• Quotes following the conference:
• “I said in Seattle that the WTO is medieval, but I’s now
wondering whether Neolithic isn’t a more appropriate term” –
Pascal Lamy, European Union Trade Commissioner – later
became head of the WTO
• “We are told that trade can provide a ladder to a better life and
deliver us from poverty and despair…Sadly the reality of the
international trading system does not match the rhetoric.” -- Kofi
Annan, Secretary General, UN.
• “Many countries – developing and developed – were dismayed
by the transformation of the WTO into a forum for the politics of
protest.. The Key division at Cancun was between the can-do
and the won’t do.” -- Robert Zollick, US Trade Representative
2
Cancun Conundrum II
• Quotes represent a growing disillusionment with the
international trade system in general and the WTO in
particular.
• WTO ministerial meeting in Cancun Mexico, September 2003
– delegates from148 member countries
• Idea was to try and find a way to move forward in key areas:
• Tariff reduction on industrial products
• Agricultural reform
• Foreign investment rules, and
• Competition policies
• Meeting was part of new round of trade talks stemming from
the agenda launched in Doha, Qatar in November 2001
• Round collapsed because of fundamental differences
between rich and poor nations
3
Cancun Conundrum III
• Stakes high
• World Bank estimate – agreement would produce $290-$520
billion annually for the world economy
• Income growth from agreement would lift approximately
million people out of poverty by 2015
144
• Main issues: Agriculture
• Agricultural subsidies in advanced countries – more on market
depress world prices for commodity exporters.
• Farm subsidies – industrialized world spends $1 billion a day on
agricultural subsidies.
• In 2002 US farm support was 17.6% of total value of agricultural
production, 36.5% in EU and 59% in Japan
• West African countries claim us cotton subsidies costing them
over a billion $ a year.
4
Cancun Conundrum IV
• Issue: Non-Agricultural Market Access (NAMA)
• Developing countries claimed advanced country tariffs
higher fro non-agricultural products – mainly industrial
goods
• Actuality for trade in manufacturers (excluding textiles
and clothing) developing countries average tariffs 8%
compared to 21% for developing countries
• Even in textiles and lowing developing country tariffs at
21% exceeded developed country tariffs at 8%
• Issue: Singapore Agenda from 1996 Ministerial meeting
• Trade facilitation
• Government procurement
• Competition rules
• Investment protection
5
Cancun Conundrum V
• Issue: Developing Country Issues
• After previous trade round, the Uruguay Round, this was
supposed to be the developing country round –
concessions given to developing countries – did not turn
out that way
• Developing countries wanted to have access to more
generic drugs
• Explanations for the Failed Talks
• Sluggish world economy
• US/EU Conflicts
• The Group of 21 (G21) led by China, India, Brazil, South Africa,
Korea and Egypt
• Overloaded agenda
• Role of NGOs
6
Cancun Conundrum VI
• Future Scenarios:
• North/South Split
• Hard to form a consensus with very different environments,
needs and view of how world works
• North mainly neo-liberal, free markets
• South mainly structuralism, development before trade
• North more inclined to focus on intellectual property, services
• South more included to want market assess in export markets
• South also concerned over commodity stabilization
• South the New International Economic Order (NIEO) good idea,
North, bad economics
7
Cancun Conundrum VII
• NIEO (New International Economic Order) set of
suggestions for altering the international trade system
(United Nations 1974)
• Adoption of an integrated approach to price supports for major
developing country commodity exports
• Official development assistance set at 0.7% advanced country
GDP
• Linking of development aid to SDRs
• Redeployment of some developed country industries to
developing countries
• Lowering of tariffs in advanced countries
• Development of an international food program
• Mechanisms for the transfer of technology to developing
countries – Law of Sea
8
Cancun Conundrum VIII
9
Cancun Conundrum IX
•
•
•
•
Future Scenarios (continued)
EU Dominance/US Ambivalence
Strengthening WTO Financially
Strengthening and Restructuring the WTO out of
Necessity – needed to continue globalization
10
Cancun Conundrum X
• Future Scenarios (contd.)
• Enlightened Unilateralism – US goes to free trade
• Change voting procedures – just let the major trading
countries vote and grant privileges to the rest
• Top 20 importers (with EU counting for one) account for 80% of
world merchandise exports and the top 50 for 92%
• Makes no sense for a country with 0.1% of trade having the
ability to block the whole process
• Problem –need unanimous vote to change voting procedure
• WTO becomes a debating club – trade dispute settlement
– countries pursue regional agreements
11