While trade negotiations are by no means the sole task
of the trade ministry, they are typically its most visible
function. Performing that function is more challenging
now that the number of negotiating platforms has
increased, the demands made on developing countries
have deepened and the number of issues on the table
has proliferated. A trade ministry may need to handle
multiple negotiations at once. It must also follow up on
the existing trade agreements, ensuring not only that
they are properly implemented at home and abroad,
but also pushing the country to take full advantage of
the opportunities that these agreements create.
Negotiating trade agreements is only a first step towards
taking full advantage of the potential opportunities
in the external sector. It is equally important that a
trade ministry follow through by working with national
producers and prospective investors to identify and
exploit market opportunities.
The nature of the global debate over trade and
development has undergone major shifts in recent
decades. Simple formulas such as the demand
for special and differential treatment for developing
countries, or the insistence of “trade, not aid” as the
royal road to development, have given way to a more
variegated range of approaches that countries take
towards the liberalization of their own markets and
the quest for preferential access to foreign markets.
While some developing countries base their strategies
on a major role for the State and hope to secure open
access to developed country markets on a one-way
basis, others give greater weight to the market and are
willing to secure that access through the negotiation of
two-way agreements. One of the key questions to be
addressed in any TPF is which of these approaches
— or some compromise between them — is the most
appropriate means of mainstreaming trade into the
country’s development strategy.
A TPF should examine in depth a country’s participation
in existing trade agreements, both multilateral and
regional, as well as the options for new negotiations.
The descriptions and prescriptions should present an
overall vision of the country’s main objectives in its
trade agreements and consider how the actual and
potential agreements contribute to those aims.
A. MARKET ACCESS:
PREFERENTIAL OR
RECIPROCAL?
The first and most fundamental question that a
developing country faces in devising its trade strategy
concerns the terms on which it is prepared to secure
improved access to other countries’ markets. Does
it seek to obtain preferential access in one direction,
in which developed countries (and some developing
countries, as well) grant open access to their markets
without demanding concessions in return, or is it
prepared to negotiate agreements in which it also
opens its own market? This question is especially
apt for middle-income countries, insofar as least
developed countries are generally not expected to
negotiate reciprocal agreements with their developed
partners. Even for LDCs, however, the negotiation of
reciprocal arrangements with their neighbours, either
in the form of free trade agreements or customs
unions, remains an option.
Whether or not they enter into RTAs, developing
countries may place differing degrees of emphasis on
discrimination as an element in their trade strategies.
There are two issues here.
First, how important is it to obtain preferential access to
major markets, and at what price? That discrimination
includes not only the terms of the preferential access
that they hope to obtain to the markets of developed
countries, but also the preferences that they might give
in return.
The principal options are the non-reciprocal
(one-way) preferences that developing countries enjoy
via programmes such as the Generalized System of
Preferences, or the reciprocal (two-way) preferences
that they secure through the negotiation of RTAs.
The second issue concerns the value that a country
will place on retaining any preferential access that
it might enjoy. Will that country view initiatives to
negotiate multilateral trade liberalization as another
opportunity to improve its access to foreign markets,
or will it instead see a threat to the margins of
preference that it already enjoys under preferential
programmes and agreements? The answer to that
question has important systemic implications, as one
of the most intractable problems in the Doha Round
stems from the widespread concern on the part of
poorer developing countries that any reductions in
MFN tariffs achieved in the negotiations could, on
balance,
do them more harm than good.
38 TRADE POLICY FRAMEWORKS FOR DEVELOPING COUNTRIES: A MANUAL OF BEST PRACTICES
Table 17. Principal themes in developing–developed country trade relationships
Non-Preferential Preferential
Non-reciprocal 1950s–1960s: Apart from post-colonial
preferences (especially with the United Kingdom
and France), developing countries enjoyed
only MFN access to rich markets. Access was
non-reciprocal insofar as developing countries
were mostly outside GATT, unbound, and often
restrictive.
1970s: Starting with the GSP and followed by
regional preferences, developing countries acquire
preferential access to industrialized markets. Trade
policies generally remain restrictive and unbound,
with countries either staying outside GATT or
opting not to adopt its agreements.
Reciprocal 1980s: While still enjoying preferential access
under the GSP and other programmes, more
developing countries reciprocate by adhering to
the Washington Consensus, adopting more open
trade policies, acceding to GATT, and participating
actively in the Uruguay Round.
1990s: Many developing countries opt to negotiate
RTAs with industrialized countries, thus replacing
the one-way concessions of the GSP and other
preferential programmes with reciprocal, bound
preferences.
Promote a universal, rules-based, open, nondiscriminatory and equitable multilateral trading system
under the World Trade Organization, including through the
conclusion of negotiations under its Doha Development
Agenda.
Significantly increase the exports of developing countries,
in particular with a view to doubling the least developed
countries’ share of global exports by 2020.
Realize timely implementation of duty-free and quota-free
market access on a lasting basis for all least developed
countries, consistent with World Trade Organization
decisions, including by ensuring that preferential rules
of origin applicable to imports from least developed
countries are transparent and simple, and contribute to
facilitating market access.
Three of the 19 targets under Sustainable Development
Goal 17:
Revitalize the Global Partnership for
Sustainable Development
PARTNERSHIPS
FOR THE GOALS
The matrix in table 17 offers a simplified summary
of the principal directions that have been taken in
the trade relationships between developed and
developing countries in the years since the founding of
the multilateral trading system. In the first few decades
of that system, which coincided with the period in
which many African, Asian, and Caribbean countries
won their independence from European countries,
most developing countries remained either outside
the GATT system or participated only nominally in
multilateral negotiations, and any preferences that
they received came solely from their former mother
countries. In subsequent decades, the relationship
evolved along with the introduction of one-way
preferential programmes in the 1970s, the adoption
of more pro-trade policies in the 1980s and the new
wave of North–South RTAs starting in the 1990s. Each
of those developments were general trends only, and
in every period there have been some countries that
deviated from the path that the majority took.
What distinguishes the present period from the past
is that it is no longer possible to identify a single
pattern that accounts for the majority of all developing
countries. While some countries have enthusiastically
pursued the initiatives that began in the 1990s,
negotiating numerous RTAs with one another and with
a diverse array of extraregional partners, others prefer
the earlier pattern of non-reciprocal preferences. In
neither case, however, can preferential access to the
markets of the developed countries be expected to
offer as much of a boost today at it did in past decades.
Margins of preference have been eroded as a result of
multilateral negotiations that reduced MFN tariffs and
have also been diluted by the developed countries’
proliferation of RTAs with many and varied partners.
The potential value of preferences has been further
undercut by Uruguay Round deals that phased out
the quotas on apparel and outlawed the imposition of
quotas under other forms such as voluntary restraint
agreements.
