DP1084 | Developing Countries After the Uruguay Round

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31/12/1994

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Abstract

The Uruguay Round marks an important turning point for the developing countries. The three core agreements on which the new World Trade Organization (WTO) is based present a remarkable range of obligations and responsibilities for a set of countries that were effectively outside any multilateral discipline on trade matters. Meanwhile, the few concrete gains that accrue to developing countries, such as the phasing out of the MFA, are suspiciously back-loaded. This is the wrong way to read the significance of the Uruguay Round for them, however. First of all, there are a number of important ways in which the Uruguay Round agreements promise to strengthen multilateral discipline in world trade. This is especially true in the area of dispute settlement. Second, since taking advantage of international trade is part and parcel of good development strategy, most of the developing country `concessions' need to be entered on the positive side of the balance sheet, and not viewed as a liability. Finally, there may be some subtle ways in which the Uruguay Round agreements can help developing country governments build better structures of governance at home to enhance the performance of their economies in areas that go beyond trade. The real threats to developing countries lie in the post-Uruguay agenda, in the demands for upward harmonization in the areas of labour and environment. A well-designed social safeguards clause will not necessarily be inimical to the interests of developing countries, and may forestall the emergence of a new set of `grey area' measures outside of the WTO.