Developing Countries and the Multilateral Trading System after the Uruguay Round

Abstract

Recurring rounds of multilateral trade negotiations (MTNs) under the auspices of the General Agreement on Tariffs and Trade (GATT) have been quite successful in reducing barriers to trade, especially tariffs. Until recently GATT negotiations were largely limited to industrialized (OECD) nations, reflecting the decision on the part of developing countries to follow a concerted strategy of demanding ‘special and differential’ treatment. Among other things this implied that reciprocal concessions were not offered in GATT negotiations, with the result that MTNs mostly centered on topics (products) primarily of interest to industrialized countries. The developing country stance towards trade policy and the GATT changed in the early 1980s, under the influence of the debt crisis, the demonstration effect of the benefits of the neutral external policy stance taken by the dynamic economies of Southeast Asia, and advice from the Bretton Woods institutions (BWIs) — the World Bank and the IMF. As national trade policies became more liberal and the interest in obtaining better access to industrialized country markets expanded, the willingness to engage in reciprocal bargaining in the GATT forum increased. This was reflected in the active participation by developing countries in the Uruguay Round.