The Present Outlook for Trade Negotiations in the World Trade Organization

Abstract

The Uruguay Round agreements established the World Trade Organization (WTO), overhauled and strengthened the GATT rules on trade in goods, and added rules on trade in services and intellectual property. Individual countries made wide-ranging commitments to liberalize trade policies. A new round of multilateral trade negotiations may be launched in the year 2000 or soon after. The author reviews the probable agenda for these negotiations and reactions thereto. Agriculture is a certainty for negotiations, with agricultural exporters insisting on liberalized markets. Net food importers fear such reforms will increase food costs and endanger food security. Trade in services is certain to be on the agenda, but some developing countries see little to gain in this area, unless their workers gain opportunities to provide services in other countries. Many developing countries are determined to avoid opening up the Uruguay Round agreement on textiles and clothing. They also fear that any WTO agreement on environmental issues will provide excuses to increase barriers on their exports. They all oppose WTO discussion of labor standards. They are divided about whether to reach an agreement on investment but tend to favor seeking an agreement on competition issues. Developing countries' attitudes toward further WTO negotiations are divided; they tend to be negative, but may be shifting toward support. Small and underdeveloped countries are unenthusiastic because they cannot participate effectively in negotiations in Geneva, and are distracted by upcoming negotiations with the European Union. Many developing countries feel their levels of commitment are already heavy, they need more time to absorb the consequences of their commitments, and it would be counterproductive to rush into another round of negotiations. They argue that industrial countries have yet to deliver on liberalization important to their trade. Countries that favor negotiations favor a broad agenda for negotiations because they have relatively wide trade interests, best served by a single negotiation that offers something for all participants and allows tradeoffs.