| Summary: | The international community finds itself
at a crossroads as it approaches the last quarter of 2003.
Will the Doha Agenda regenerate the multilateral consensus
that has been the hallmark of successive rounds of trade
liberalization since 1947 and in doing so provide new
impetus for global integration? Or will the Doha Agenda
collapse in stalemate and perhaps be viewed as the moment
when the international community retreated from
multilateralism and opened the floodgates for less desirable
bilateral and regional arrangements? The round has the
opportunity to remove many of the inequities in the global
trading system that put developing countries-and poor people
in particular-at a disadvantage in their trade. Several
issues under discussion are pivotal to development outcomes.
They are the focus of this report: First, because most poor
people live in rural areas, trade barriers in agriculture
are among the most important to poverty reduction. Second,
labor-intensive manufactures have been the most dynamic
market segment for every major region, including Africa, yet
many developing countries find that their exports meet
obstacles in foreign markets-high tariffs, quotas, specific
duties, and "antidevelopment" tariff structures
that discourage adding value in poor countries. Third, in
services, the potential for development-promoting reciprocal
gains is especially high. Regulations in some developing
countries still protect some inefficient state monopolies
from competition-a drag on growth. (To be sure, proper
regulation in some sectors must precede liberalization to
avoid potential disruptions in socially important markets,
such as finance or basic services.) Also, access for
developing countries' services exports to industrial
countries has yet to be fully bound in the General Agreement
on Trade in Services (GATS) (World Bank 2001). Finally,
national laws prevent greater labor mobility that would
otherwise contribute to higher standards of living in both
receiving and sending countries. Fourth, reducing the costs
of trading by improving international transportation
services, customs and ports, and logistics management- trade
facilitation-requires substantial new investment, additional
technical assistance, and coordinated multilateral efforts.
Trade facilitation is fundamental to realizing the expanded
trade promise of Doha, but the WTO agenda constitutes a
small part of the challenge. Finally, the issue of special
treatment for developing countries cuts across all of these
policy domains and affects trade preferences and exemptions
from WTO regulations. The pursuit of trade preferences and
exemptions from multilateral rules have not always served
developing countries particularly well, both because
preferences have not proven reliable and because selective
coverage has often left productivity-detracting trade
barriers in place. The residual barriers sap growth in the
protected economies and in developing-country trading
partners that are denied access. Perhaps most important, the
majority of the world's poor do not live in the least
developed countries (LDCs). Trade preferences targeted at
these countries do not benefit the three quarters of the
world's poor that live on US$1 per day in other
countries. In implementing new WTO rules, new accords will
be most effective if they recognize differences among
individual countries' capacity to undertake new,
resource-intensive rules. These differences require a new
approach to special and differential treatment.
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