Back Matter
  • 1 https://isni.org/isni/0000000404811396, International Monetary Fund

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1

The authors are respectively with the World Bank and the IMF. The views expressed in this paper and their own and do not necessarily reflect those of the institutions with which they are affiliated. They would like to thank Mark Allen, Nancy Birdsall, Peter Clark, Bill Cline, Kymberly Ann Eliott, Bernard Hoekman, Nurul Islam, Hans-Peter Lankes, Julia Nielson, Roger Nord, Dani Rodrik, André Sapir, Stephen Tokarick, Alan Winters, and participants at the Center for Global Development seminar for helpful comments.

2

Our list comprises countries that are both small and poor. Countries are considered small if they account for less than 0.05 percent of the world’s imports of goods and services. Poor countries are those that are defined as low income by the World Bank (per capita GDP in purchasing power parity (PPP) terms of US$4,630 or below). Of course, any line of demarcation on these two criteria will be open to challenge, but, as we explain below, the principle that the criteria should be size and income is important.

3

See Hoekman and others (2003), Messerlin (2003), Finger (2002) and, especially, Wolf (2003) among others for similar analyses of the treatment of developing countries in the WTO.

4

Of course, to the extent that some of these countries had liberalized unilaterally, the issue was locking in these reforms in the WTO.

5

The agreement reached in Geneva in August 2003 was in fact a recognition as well as a means of addressing this differential impact of TRIPs on the small and poor countries.

6

Under the Uruguay Round, all countries, including developing countries were required to bind all their agricultural tariffs but were allowed to bind them at very high, often meaninglessly high, levels. The latter is reflected in the data on the wedge in the agricultural sector.

7

Small and poor countries are more likely to be net exporters of nonfood agricultural products than of food products. However, nonfood agricultural exports generally face low trade barriers in major industrial country markets.

8

Cline (2004) in his study, however, argues that net food importers could nevertheless benefit from global trade liberalization as long as they are proportionally larger net importers of manufacturing than agricultural products. Global liberalization, according to him, will lead to a reduction in the world price of manufactures relative to agricultural products that will have a positive welfare impact.

9

See Chaudhri and others (2003) for estimates of the impact of TRIPs on India.

10

The also do not take account of the negative impact stemming from obligations such as TRIPs, and from the financial costs of adhering to agreements such as TRIPS and customs valuation.

11

One area where preferential access might be worth pursuing is with regard to the temporary movement of unskilled labor. There seems to be little prospect of multilateral liberalization of such movement, while there is evidence of a willingness on the part of some industrial countries to conclude bilateral agreements with specific developing countries. Here the role of the WTO would be to acquiesce in the participation of the small countries in such agreements despite the implied departure from the MFN principle.

12

See developing country submissions leading up to the Doha and Cancun ministerials.

13

Of course, the value to small and poor countries of adhering to WTO obligations even as a signal might be limited if partners have little incentive to enforce the obligations as we suspect.

The WTO and the Poorest Countries: The Stark Reality
Author: Aaditya Mattoo and Mr. Arvind Subramanian