Global Political Economy

The development dimension of the Doha Developmental Round and its

impact on developing countries

10/10/07

Michael Ferendinos

Introduction 3

Evolution of the trading system 3

Relationship between development and trade 5

Special and differential treatment 6

Negotiating objectives of specific country coalitions within WTO (NAMA) 8

Effects of WTO negotiations on developing countries 9

How should the WTO accommodate the interests of developing countries? 12

Conclusion 16

Bibliography 17

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Introduction

The fourth WTO Ministerial Conference at Doha, Qatar in November 2001, dubbed the

"Doha Developmental Round", signalled a significant shift in focus within the World

Trade Organisation (WTO) as it recognized the economic developmental needs of low

income countries. This paper will assess the development dimension of the negotiations

focussing on the extent to which this offers developing countries policy space and

flexibilities to pursue developmental objectives.

The WTO advocated the implementation of special and differential (S&D) treatment in

order to assist with the plight of developing countries. This paper acknowledges the

importance of S&D treatment, but argues that it is not sufficient as a solitary approach to

development. In an adaptation of Amartya Sen′s conceptualisation of development as the

process of expanding human freedoms; Faizel Ismail highlights four elements of the

development dimension of the multilateral trading system, namely: fair trade, capacity

building, balanced rules, and good governance.

The paper will begin with a brief overview of the evolution of the trading system itself,

from GATT to the WTO. Thereafter it will look at the Relationship between development

and trade, focussing particularly on NAMA and S&D treatment. Following this will be a

brief analysis of the effect of WTO negotiations on developing countries; ending off with

a look at how the WTO can be restructured to accommodate the interests of developing

countries.

Evolution of the trading system

The General Agreement on Tariffs and Trade (GATT) was established in 1947 with the

objective to free global trade. It′s most important aspect is the Most Favoured Nation

(MFN) principle which states that any concession that one state receives from another

should be provided to all other states (McGowan and Nel, 2002:81).

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The evolution from the General Agreement on Tariffs and Trade to the World Trade

Organisation WTO came about after a series of negotiations, referred to as `rounds′. The

WTO replaced GATT in 1995 after the final round of GATT, known as the Uruguay

Round, was wrapped up in 1994 following its commencement eight years earlier

(McGowan and Nel, 2002:89).

The three predominant changes to trade regulations in the world economy that came

about after the Uruguay Round dealt with agricultural protectionism, Trade Related

Intellectual Property Rights (TRIPS), and Trade Related Investment Measures (TRIMS).

Furthermore tariff and non-tariff barriers, as well as other protectionist measures, were

reduced significantly. This makes it more difficult for developing countries to protect

young industries as well as their agricultural sector (McGowan and Nel, 2002:89).

Where GATT was created by the United States and its allies, promoting liberal trade

values and objectives corresponding with U. S. political and military strategic objectives,

the WTO tries to manage the entire international trade system by means of a

multinational effort, not a by means of a hegemon imposing itself on the rest. The

difference between the two is that GATT was just a treaty, but the WTO is a fully-

fledged international organisation. Thus the WTO packs a lot more punch as their

`dispute­settlement mechanism′ clearly illustrates. This gives them the authority to

impose trade sanctions on member states that are not loyal to trade agreements (Balaam

and Veseth, 2001: 120-121).

The WTO is headquartered in Geneva, Switzerland, consists of 151 members and

accounts for more than 90 percent of world trade (WTO, 2007). Its main function is to

implement the latest GATT agreement and to act as a `round-table′ in the negotiation of

new trade deals. It reviews national trade policies, functions as a mediator in the settling

of trade disputes, and provides assistance to least developed countries (LDCs), by means

of technical assistance and training programs, with regard to trade policy issues. The

members themselves seek consensus when it comes to decision making. The WTO′s

decision-making structure consists of a general council composed of ambassadors and

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