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fair_trade_for_all [2010/05/31 13:44]
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fair_trade_for_all [2019/11/08 10:39] (current)
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| ====== Introduction ====== | ====== Introduction ====== |
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| ===== Recent WTO History ===== | ===== Recent WTO History ===== |
| The Uruguay Round completed in 1994, establishing the [[wp>World Trade Organisation]] (WTO) and drastically expanding the scope of multilateral law concerning global trading rules. In the decade since its completion, consensus has emerged that the round heavily favoured developed countries and many developing countries have suffered unexpected costs in the implementation of its provisions. The collapse of the WTO ministerial conference in Seattle in 1999 --- where a new round of negotiations had been due to be launched --- brought the rich world into this consensus and convinced developed countries that the WTO would have to move in a distinctly new direction if it were to convince its developing members that a new agreement was in their interests. | The Uruguay Round completed in 1994, establishing the [[wp>World Trade Organisation]] (WTO) and drastically expanding the scope of multilateral law concerning global trading rules. In the decade since its completion, consensus has emerged that the round heavily favoured developed countries and many developing countries have suffered unexpected costs in the implementation of its provisions. The collapse of the WTO ministerial conference in Seattle in 1999 --- where a new round of negotiations had been due to be launched --- brought the rich world into this consensus and convinced developed countries that the WTO would have to move in a distinctly new direction if it were to convince its developing members that a new agreement was in their interests. |
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| That consensus was formally announced at the next ministerial conference in Doha in 2001 in the form of the [[wp>Doha Declaration]]. This conference launched the so-called 'Development Round', with developed countries promising to prioritise a rebalancing of the interests of developed and developing countries. However, developed countries as a bloc have reneged on those commitments, setting an agenda for Doha negotiations with only minimal concessions to development. This agenda focused particularly on the 'Singapore Issues', three subjects on which the WTO established working groups, and one which the WTO Goods Council was mandated to examine at the Singapore ministerial conference in 1996: | That consensus was formally announced at the next ministerial conference in Doha in 2001 in the form of the [[wp>Doha Declaration]]. This conference launched the so-called 'Development Round', with developed countries promising to prioritise a rebalancing of the interests of developed and developing countries. However, developed countries as a bloc have reneged on those commitments, setting an agenda for Doha negotiations with only minimal concessions to development. This agenda focused particularly on the "[[wp>Singapore issues]]", three subjects on which the WTO established working groups, and one which the WTO Goods Council was mandated to examine at the Singapore ministerial conference in 1996: |
| * trade and investment | * trade and investment |
| * competition policy | * competition policy |
| * trade facilitation. | * trade facilitation. |
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| Developing countries, wary of entering another bad agreement after the failures of Doha, have blocked progress on developed countries' target areas. The US has largely responded to the stalemate by switching its attention to bilateral agreements with individual developing partners, a process which developing countries recognise maximises the US' power advantage. | Developing countries, wary of entering another bad agreement after the failures of Uruguay, have blocked progress on developed countries' target areas. The US has largely responded to the stalemate by switching its attention to bilateral agreements with individual developing partners, a process which developing countries recognise maximises the US' power advantage. |
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| ===== Outline of the Book ===== | ===== Outline of the Book ===== |
| * Mexico's loss of tariff revenue prevented it from investing in infrastructure and education, whereas China was able to invest heavily in these and so was able to take jobs from Mexico | * Mexico's loss of tariff revenue prevented it from investing in infrastructure and education, whereas China was able to invest heavily in these and so was able to take jobs from Mexico |
| * NAFTA was not really a free trade agreement, as it did not eliminate US agricultural subsidies, enabling the US to export below the cost of production. The human implications are bleak: 80 per cent of the rural Mexican population lives in poverty, more than half in extreme poverty. | * NAFTA was not really a free trade agreement, as it did not eliminate US agricultural subsidies, enabling the US to export below the cost of production. The human implications are bleak: 80 per cent of the rural Mexican population lives in poverty, more than half in extreme poverty. |
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| ===== Theory: Liberalisation, Welfare and Growth ===== | ===== Theory: Liberalisation, Welfare and Growth ===== |
| Another type of market failure is based on information externalities. Market information is scarce and highly costly in developing countries --- for instance, it is normal that the only means of determining whether a certain business model is profitable is to try it (with one's own capital, given the failure of capital markets). The potential value of demonstrating a business model is profitable can be enormous, but very often it is impossible for the entrepreneur to capture more than a fraction of this value. If the model fails, the entrepreneur pays all of the costs; if it succeeds, copy-cat firms capture some if not most of the gains. There are compelling real-world examples: cut flowers in Colombia, apparel in Bangladesh, software in India --- in each case the entrepreneur that demonstrated the profitability of the model received a miniscule fraction of industry profits. | Another type of market failure is based on information externalities. Market information is scarce and highly costly in developing countries --- for instance, it is normal that the only means of determining whether a certain business model is profitable is to try it (with one's own capital, given the failure of capital markets). The potential value of demonstrating a business model is profitable can be enormous, but very often it is impossible for the entrepreneur to capture more than a fraction of this value. If the model fails, the entrepreneur pays all of the costs; if it succeeds, copy-cat firms capture some if not most of the gains. There are compelling real-world examples: cut flowers in Colombia, apparel in Bangladesh, software in India --- in each case the entrepreneur that demonstrated the profitability of the model received a miniscule fraction of industry profits. |
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| > [I]t is no great surprise that low-income countries are not teeming with entrepreneurs engaged in self-discovery. --Dani Rodrik, 2004, cited p29 | > [I]t is no great surprise that low-income countries are not teeming with entrepreneurs engaged in self-discovery. ---Dani Rodrik, 2004, cited p29 |
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| Perhaps more important than the impact on welfare is liberalisation's impact on long-term economic growth. Perhaps liberalisation will increase growth: | Perhaps more important than the impact on welfare is liberalisation's impact on long-term economic growth. Perhaps liberalisation will increase growth: |
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| > [M]odern trade agreements have been extended into areas which intrude into national sovereignty with no justification based on the need for collective action and without clearly identified and fairly distributed global benefits. The presumption of consumer sovereignty is based on the premise that society should only interfere with individual choices when those choices have consequences for others, when there is a need for collective action, and the same is true in trade. ---p86 | > [M]odern trade agreements have been extended into areas which intrude into national sovereignty with no justification based on the need for collective action and without clearly identified and fairly distributed global benefits. The presumption of consumer sovereignty is based on the premise that society should only interfere with individual choices when those choices have consequences for others, when there is a need for collective action, and the same is true in trade. ---p86 |
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| ====== Special Treatment for Developing Countries ====== | ====== Special Treatment for Developing Countries ====== |
| SDT is controversial. Whilst developing countries argue that SDT is necessary to permit them to pursue appropriate trade policies, opponents argue that: | SDT is controversial. Whilst developing countries argue that SDT is necessary to permit them to pursue appropriate trade policies, opponents argue that: |
| * it breaks the principle of reciprocity on which the WTO is based | * it breaks the principle of reciprocity on which the WTO is based |
| * according to neoliberal theory, protectionism that SDT encourages is inefficient and bad for developing countries themselves: they'd be better off if forced to liberalise completely (the problems with neoliberal assumptions was discussed in chapter 2) | * according to neoliberal theory, protectionism that SDT encourages is inefficient and bad for developing countries themselves: they'd be better off if forced to liberalise completely (the problems with neoliberal assumptions were discussed in chapter 2) |
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| ===== SDT in Doha ===== | ===== SDT in Doha ===== |
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| SDT has always been an important demand of the developing countries in Doha, with the G33 its main proponent. After the Cancún ministerial walk-out, in 2004 the EU Trade Commissioner wrote to trade ministers to propose that LDCs((The UN classification recognised by the WTO: 32 of the 50 LDCs are WTO-members; eight more are in accession.)) and "other weak or vulnerable developing countries"{{Which later became the "small vulnerable economies" (SVEs).}} should not have to undertake further tariff reductions during Doha, whilst still benefiting from other members' reductions. These countries would have the "round for free" (RFF). | SDT has always been an important demand of the developing countries in Doha, with the G33 its main proponent. After the Cancún ministerial walk-out, in 2004 the EU Trade Commissioner wrote to trade ministers to propose that LDCs((The UN classification recognised by the WTO: 32 of the 50 LDCs are WTO-members; eight more are in accession.)) and "other weak or vulnerable developing countries"((Which later became the "small vulnerable economies" (SVEs).)) should not have to undertake further tariff reductions during Doha, whilst still benefiting from other members' reductions. These countries would have the "round for free" (RFF). |
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| The danger of the RFF approach is that it would reduce the participation of the RFF countries in the round --- indeed, its intention was surely to overcome opposition to developed country proposals by the RFF countries by reducing their incentive to get involved. The result might be that Doha would come to mimic early GATT rounds in which the "GATT operated as a club for the advancement of rich-country interests."((p93.)) Whilst it would enable poorer economies to benefit from new tariff reductions, these reductions are more likely to be on goods of interest to exporters in other developed countries, of limited relevance and benefit to RFF economies. An additional problem with the approach is that it allows RFF countries to retain a veto over a round in which they are contributing little --- this could hold up negotiations, further encouraging the proliferation of bilateral agreements outside the WTO. | The danger of the RFF approach is that it would reduce the participation of the RFF countries in the round --- indeed, its intention was surely to overcome opposition to developed country proposals by the RFF countries by reducing their incentive to get involved. The result might be that Doha would come to mimic early GATT rounds in which the "GATT operated as a club for the advancement of rich-country interests."((p93.)) Whilst it would enable poorer economies to benefit from new tariff reductions, these reductions are more likely to be on goods of interest to exporters in other developed countries, of limited relevance and benefit to RFF economies. An additional problem with the approach is that it allows RFF countries to retain a veto over a round in which they are contributing little --- this could hold up negotiations, further encouraging the proliferation of bilateral agreements outside the WTO. |
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| > A blanket proscription against government subsidies to technology (industrial policies) is likely to have an adverse effect on developing countries and, indeed, it is likely in practice to be unfair: the United States conducts its industrial policy largely through the military, which supports a wide variety of technological developments that eventually have important civilian applications. And it is hard to conceive of a trade agreement that would prohibit the development of such technologies through defence programmes. (Even the EU has complained about America's use of defence expenditures as a hidden subsidy for its aerospace industry.) ---p105 | > A blanket proscription against government subsidies to technology (industrial policies) is likely to have an adverse effect on developing countries and, indeed, it is likely in practice to be unfair: the United States conducts its industrial policy largely through the military, which supports a wide variety of technological developments that eventually have important civilian applications. And it is hard to conceive of a trade agreement that would prohibit the development of such technologies through defence programmes. (Even the EU has complained about America's use of defence expenditures as a hidden subsidy for its aerospace industry.) ---p105 |
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| ====== Priorities for a Development Round ====== | ====== Priorities for a Development Round ====== |
| * multilateral enforcement (non-injured parties can also retaliate against an offending member) | * multilateral enforcement (non-injured parties can also retaliate against an offending member) |
| * monetisation of sanctions (developing countries can sell the right to sanction to other members for whom the sanction would be more valuable, eg if Nicaragua won a dispute against the US, it could sell the right to impose duties to China or the EU) | * monetisation of sanctions (developing countries can sell the right to sanction to other members for whom the sanction would be more valuable, eg if Nicaragua won a dispute against the US, it could sell the right to impose duties to China or the EU) |
| * institutional reform | * institutional reform: |
| * creation of evaluation unit within the WTO to assess likely impact of measures on developing countries | * creation of evaluation unit within the WTO to assess likely impact of measures on developing countries |
| * greater transparency (elimination of the Green Room, etc) | * greater transparency (elimination of the Green Room, etc) |
| * better application of antitrust law across jurisdictions: | * better application of antitrust law across jurisdictions: |
| * domestic antitrust regulators should look at the effects on foreign markets | * domestic antitrust regulators should look at the effects on foreign markets |
| * foreign consumers should have the right to take action in foreign courts | * foreign consumers should have the right to take action |
| * cross-border class action suits should be enabled to enable consumers in multiple jurisdictions to impose sanctions enforceable in the corporation's home country | * cross-border class action suits should be enabled so that consumers in multiple jurisdictions can impose sanctions enforceable in the corporation's home country |
| * consumers and governments should be able to take action (including class action) against international cartels, including those involving governments or government sanctions (ie OPEC) | * consumers and governments should be able to take action (including class action) against international cartels, including those involving governments or government sanctions (ie OPEC) |
| * development policies such as affirmative action and preferences for small businesses should be permitted, even when they have a differential impact on foreign firms | * development policies such as affirmative action and preferences for small businesses should be permitted, even when they have a differential impact on foreign firms |
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| The US has recently attacked China for allegedly manipulating its exchange rate. The situation is so complex that in almost all cases it is impossible to definitively determine whether this is truly a deliberate government policy. The threshold for action should be very high, at the least that only high multilateral surpluses be admissible as evidence. | The US has recently attacked China for allegedly manipulating its exchange rate. The situation is so complex that in almost all cases it is impossible to definitively determine whether this is truly a deliberate government policy. The threshold for action should be very high, at the least that only high multilateral surpluses be admissible as evidence. |
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| ====== Joining the Trading System ====== | ====== Joining the Trading System ====== |
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| Article XII of the Marrakech Agreement provides for the possibility that non-members may join the WTO, but "for an organisation which prides itself on being 'rules-based', the accession process is remarkably vague."((p159.)) In practice, developing countries as a bloc retain a veto on the accession package, and use this power to demand much greater concessions from acceding countries than have been made by existing members. As part of the Doha Round, in December 2002 the General Council adopted new guidelines for LDC accession: the process would be streamlined and simplified, and acceding LDCs would not be required to make commitments beyond existing LDC members. In practice these guidelines have been ignored. Empirical studies show that, over time, accession is becoming slower and more costly (in terms of commitments). Acceding members have been forced to accept the following: | [[http://www.wto.org/english/docs_e/legal_e/04-wto_e.htm|Article XII]] of the [[wp>Marrakesh Agreement]] provides for the possibility that non-members may join the WTO, but "for an organisation which prides itself on being 'rules-based', the accession process is remarkably vague."((p159.)) In practice, developed countries as a bloc retain a veto on the accession package, and use this power to demand much greater concessions from acceding countries than have been made by existing members. As part of the Doha Round, in December 2002 the General Council adopted new guidelines for LDC accession: the process would be streamlined and simplified, and acceding LDCs would not be required to make commitments beyond existing LDC members. In practice these guidelines have been ignored. Empirical studies show that, over time, accession is becoming slower and more costly (in terms of commitments). Acceding members have been forced to accept the following: |
| * greater binding coverage than existing members (some LDCs have accepted greater binding coverage than Australia, a developed member) | * greater binding coverage than existing members (some LDCs have accepted greater binding coverage than Australia, a developed member) |
| * lower bound rates (LDCs have bound at much lower maximum rates than the US) | * lower bound rates (LDCs have bound at much lower maximum rates than the US) |
| * waiver of SDT, including shorter transition times on the TBT, SPS and customs valuation agreements, as well as TRIPS, including immediately eliminating "the use of affordable new generic drugs"((p163.)) | * waiver of SDT, including shorter transition times on the TBT, SPS and customs valuation agreements, as well as TRIPS, including immediately eliminating "the use of affordable new generic drugs"((p163.)) |
| * China had to accept an extraordinary right of other members to use safeguards against it (beyond GATT Article XIX and in violation of MFN) | * China had to accept an extraordinary right of other members to use safeguards against it (beyond GATT [[http://www.wto.org/english/docs_e/legal_e/gatt47_02_e.htm#articleXIX|Article XIX]] and in violation of MFN) |
| * some LDCs have bound export subsidies at zero (far beyond many developed countries' commitments) | * some LDCs have bound export subsidies at zero (far beyond many developed countries' commitments) |
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| > It seems strange that the WTO's developed country members should force acceding countries, particularly small and poor countries like Cambodia and Nepal, into such strong concessions. Grynberg and Joy (2000) suggest that the motivation lies in the developed countries' desire to create a precedent that can be applied to future negotiations. ---p161 | > It seems strange that the WTO's developed country members should force acceding countries, particularly small and poor countries like Cambodia and Nepal, into such strong concessions. Grynberg and Joy (2000) suggest that the motivation lies in the developed countries' desire to create a precedent that can be applied to future negotiations. ---p161 |
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| Whilst Doha has floundered, the US has been aggressively pursuing bilateral treaties. These are bad for development because | Whilst Doha has floundered, the US has been aggressively pursuing bilateral treaties. These are bad for development because |
| * they //temporarily// divert trade (and the double-adjustment involved will be particularly painful for developing countries, and | * they //temporarily// divert trade (and the double-adjustment involved will be particularly painful for developing countries), and |
| * the US has greater power in these negotiations, but the results will be used as a precedent in multilateral negotiations, probably leading to an even less balanced agreement in the WTO | * the US has greater power in these negotiations, but the results will be used as a precedent in multilateral negotiations, probably leading to an even less balanced agreement in the WTO |
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| * a new (secretarial) body or bodies should be created within the WTO to: | * a new (secretarial) body or bodies should be created within the WTO to: |
| * supply impact assessments to developing countries, to mitigate their informational disadvantage | * supply impact assessments to developing countries, to mitigate their informational disadvantage |
| * assess whether proposed trade agreements are consistent with the principle that trade diversion should be limited and less than trade creation | * assess whether proposed bilateral trade agreements are consistent with the principle that trade diversion should be limited and less than trade creation |
| * assess countries in crisis and approve safeguard and other emergency measures | * assess countries in crisis and approve safeguard and other emergency measures |
| * assistance provided through the WTO system should be reassessed: | * assistance provided through the WTO system should be reassessed: |
| * adjustment costs are not merely institutional but in many developing countries sizeable additional financial assistance will be required | * adjustment costs are not merely institutional but in many developing countries sizeable additional financial assistance will be required |
| * legal assistance will be required to supplement an overhaul of dispute settlement to make it fairer to developing countries | * legal assistance will be required to supplement an overhaul of dispute settlement to make it fairer to developing countries |
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| ====== Trade Liberalisation and the Costs of Adjustment ====== | ====== Trade Liberalisation and the Costs of Adjustment ====== |
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| Understanding of adjustment costs is important because: | Understanding of adjustment costs is important because: |
| * the Development Round's cognisance of equity requires that poor and vulnerable groups be compensated significant adjustment costs fall to them, and | * the Development Round's cognisance of equity requires that poor and vulnerable groups be compensated whenever significant adjustment costs fall to them, and |
| * opposition to liberalisation often comes from groups who will face the largest costs: compensating these groups may be necessary to enable liberalisation | * opposition to liberalisation often comes from groups who will face the largest costs: compensating these groups may be necessary to enable liberalisation |
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| * workers and capital in previously protected industries become unemployed in the short run | * workers and capital in previously protected industries become unemployed in the short run |
| * government or workers face adaptation costs, such as training, benefits, search costs | * government or workers face adaptation costs, such as training, benefits, search costs |
| * government bears implementation and enforcement costs, which are particularly high in the case of Singapore Issues (in many cases the cost of implementation may be higher than the country's entire development budget)((Finger (2000) points out that the implementation of regulatory agreements will often draw money from the development budgets of poor countries. For this reason such agreements should be analysed in terms of their rate of return and compared to the alternative development priorities on which the same money could be spent. Finger estimated the implementation of three of the Uruguay Round's six agreements that required regulatory change... His analysis suggests that the average cost of restructuring domestic regulations in the twelve developing countries considered could be as much as $150 million. In eight of these countries this figure is larger than the entire annual development budget. ---p192)) | * government bears implementation and enforcement costs, which are particularly high in the case of Singapore issues (in many cases the cost of implementation may be higher than the country's entire development budget)((Finger (2000) points out that the implementation of regulatory agreements will often draw money from the development budgets of poor countries. For this reason such agreements should be analysed in terms of their rate of return and compared to the alternative development priorities on which the same money could be spent. Finger estimated the implementation of three of the Uruguay Round's six agreements that required regulatory change... His analysis suggests that the average cost of restructuring domestic regulations in the twelve developing countries considered could be as much as $150 million. In eight of these countries this figure is larger than the entire annual development budget. ---p192)) |
| * investment is required to take advantage of new opportunities: | * investment is required to take advantage of new opportunities: |
| * by government: infrastructure such as transport and standards and conformance institutions | * by government: infrastructure such as transport and standards and conformance institutions |
| * weak access to credit | * weak access to credit |
| * firms can't finance adjustment in production | * firms can't finance adjustment in production |
| * workers can't finance retraining or search for new employment | * workers can't afford retraining or their own search for new employment |
| * high unemployment: workers find it harder to get new employment, meaning longer unemployment and probably settling for a worse job than previously held | * high unemployment: workers find it harder to get new employment, meaning longer unemployment and probably settling for a worse job than previously held |
| * low education: studies show that costs are lower for better educated (therefore more mobile) workers | * low education: studies show that costs are lower for better educated (therefore more mobile) workers |
| * reduction in tariff preferences for the poorest countries | * reduction in tariff preferences for the poorest countries |
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| The authors present a range of evidence suggesting that the benefits of non-reciprocal tariff preferences (both GSP and especially LDC schemes such as EBA and AGOA) are small, and more than offset by the likely benefits in MFN tariffs, especially by developing countries who don't have GSP schemes but do currently have higher tariffs than developed countries. One reason for this is restrictive rules of origin, particularly in the EU, which undermine the value of such benefits (the American scheme has much lower coverage but a higher rate of take-up --- this probably reflects the costs of meeting the EU's RoO). However, the authors' analysis underestimates the value of EBA preferences as it uses Cotonou preferences as its counterfactual, not MFN tariffs (and Cotonou preferences expired in 2008). One reason that the GSP is ineffective is that it fails to compensate for a tariff regime that discriminates against products exported by developing countries --- thus for the EU, Canada and Japan the (weighted) average duty paid under the GSP is still //larger// than the average duty paid under MFN. | The authors present a range of evidence suggesting that the benefits of non-reciprocal tariff preferences (both GSP and especially LDC schemes such as EBA and AGOA) are small, and more than offset by the likely benefits from reductions in MFN tariffs, especially by developing countries who don't have GSP schemes but do currently have higher tariffs than developed countries. One reason for this is restrictive rules of origin, particularly in the EU, which undermine the value of such benefits (the American scheme has much lower coverage but a higher rate of take-up --- this probably reflects the costs of meeting the EU's RoO). However, the authors' analysis underestimates the value of EBA preferences as it uses Cotonou preferences as its counterfactual, not MFN tariffs (and Cotonou preferences expired in 2008). One reason that the GSP is ineffective is that it fails to compensate for a tariff regime that discriminates against products exported by developing countries --- thus for the EU, Canada and Japan the (weighted) average duty paid under the GSP is still //larger// than the average duty paid under MFN. |
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| > In a sense the GSP only partially compensates for the discrimination by developed countries against the goods produced by developing countries. ---p183 | > In a sense the GSP only partially compensates for the discrimination by developed countries against the goods produced by developing countries. ---p183 |
| * goods prices | * goods prices |
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| Fiscal effects also vary a lot between countries. "Senegal pursued trade liberalisation in the mid-1980s, following which there were large revenue shortfalls. Lost tariff revenue combined with slow growth in trade volumes and weaknesses in economic management led to dire fiscal consequences." The process had to be abandoned. Other countries have been fairly successful in replacing lost revenue. Institutions such as the IMF believe that switching from trade tax to VAT is welfare-enhancing, but recent theoretical research shows that in a country with an untaxable informal sector it is desirable to retain some trade taxes. | Fiscal effects also vary a lot between countries. "Senegal pursued trade liberalisation in the mid-1980s, following which there were large revenue shortfalls. Lost tariff revenue combined with slow growth in trade volumes and weaknesses in economic management led to dire fiscal consequences."((p189--90.)) The process had to be abandoned. Other countries have been fairly successful in replacing lost revenue. Institutions such as the IMF believe that switching from trade tax to VAT is welfare-enhancing, but recent theoretical research shows that in a country with an untaxable informal sector it is desirable to retain some trade taxes. |
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| On the basis of proper per-country analysis, assistance must be provided to governments to improve safety nets for workers and to improve credit markets for firms (if necessary to counteract misguided IMF policy artificially inflating interest rates). Evidence suggests that even if firms' average cash flows improve, if credit markets are weak the adverse effects on losers can more than offset gains leading to overall losses. Technical assistance is currently inadequate and must be expanded and improved. Programmes must support countries in developing their own policies, unfettered by IMF conditionality, and new tax structures that undermine long-term growth based on an inadequate understanding of developing economies should not be pushed on governments. Assistance for LDCs must also help them to capture new (and existing) opportunities for export, by addressing supply constraints (often linked to capital markets and infrastructure) and product standards through participation in standard-setting and assistance for national programmes to measure and improve conformance. | On the basis of proper per-country analysis, assistance must be provided to governments to improve safety nets for workers and to improve credit markets for firms (if necessary to counteract misguided IMF policy artificially inflating interest rates). Evidence suggests that even if firms' average cash flows improve, if credit markets are weak the adverse effects on losers can more than offset gains leading to overall losses. Technical assistance is currently inadequate and must be expanded and improved. Programmes must support countries in developing their own policies, unfettered by IMF conditionality, and new tax structures that undermine long-term growth based on an inadequate understanding of developing economies should not be pushed on governments. Assistance for LDCs must also help them to capture new (and existing) opportunities for export, by addressing supply constraints (often linked to capital markets and infrastructure) and product standards through participation in standard-setting and assistance for national programmes to measure and improve conformance. |
| Two appendices contain empirical reviews of market access and Singapore issues. | Two appendices contain empirical reviews of market access and Singapore issues. |
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| | ====== Selected Bibliography ====== |
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| | The following works are mentioned in this abridgement: |
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| | * **Baldwin**, Robert E, John **Mutti** and J David **Richardson**, 1980, "Welfare Effects on the United States of a Significant Multilateral Tariff Reduction", //Journal of International Economics//, 10, 405--23 |
| | * **Brenton**, P, 2003, "Integrating the Least Developed Countries into the World Trading System: The Current Impact of EU Preferences under Everythign But Arms", mimeo, World Bank |
| | * **Grynberg**, R, and R M **Joy**, 2000, "The Accession of Vanuatu to the WTO: Lessons for the Multilateral Trading System", //Journal of World Trade//, 34:6, 159--73 |
| | * **Kuznets**, S, 1955, "Economic Growth and Income Inequality, //American Economic Review// 45, 1--28 |
| | * **Lewis**, W A, 1955, //The Theory of Economic Growth//, London: George Allen & Unwin |
| | * **Samuelson**, Paul A, 1962, "The Gains from International Trade Once Again", //Economic Journal// 72, 820--9 |
| | * **Rodrik**, Dani, 2004, "Industrial Policy for the 21st Century", mimeo, Harvard University |
