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WTO Working Papers
WTO working papers usually represent research in progress. Such research may be conducted in the preparation of WTO Secretariat reports, studies or other material for WTO members. The papers are circulated for comment because the WTO considers critical review of professional research to be extremely important.
281 - 293 of 293 results
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Can Bilateralism Ease the Pains of Multilateral Trade Liberalization?
Publication Date: June 1998More LessUsing the influence-driven approach to endogenous trade-policy determination, we show how a free-trade agreement (FTA) with rules of origin can work as a device to compensate losers from trade liberalization. The FTA constructed in this paper is characterized by external tariff structures that are negatively correlated across member countries, ensuring efficiency gains and, through reduced average protection, compatibility with the multilateral trading system's requirements. It is also politically viable, and we demonstrate that, in the countries concerned, governments are willing to include its formation in the political agenda in spite of the fact that, in equilibrium, political contributions from producer lobbies decline after the agreement.
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Transition Economies, Business and the WTO
Publication Date: May 1998More LessTransition economies are going through a process of changing the role of the state, allowing a greater role for the private sector. This is consistent with the market-oriented approach of the WTO. Remaining state agencies and enterprises will need to adapt their ways of doing business, including in their approach to procurement of goods and services, for economic and legal reasons. There is some hesitation about privatization, as for foreign direct investment, and, where accepted, about the precise timing. Where privatization of basic service monopolies occurs, the role of the state shifts towards a regulatory function. In some private sector activities, a non-interventionist approach to competition may be justified by market considerations, while in others a pro-active policy may be necessary to ensure the benefits of economic liberalization.
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Multilateral Approaches to Market Access Negotiations
Publication Date: May 1998More LessMarket access negotiations in merchandise trade at the multilateral level cover tariffs and non-tariff measures (NTMs). While tariffs have been substantially reduced in earlier rounds, they remain high in certain areas and further reductions involve a number of complex technical issues. Some formulae approaches, not used in the Uruguay Round, seem more favourable to developing countries. Elimination or phased reductions of NTMs in agriculture is one of the main areas for further market access negotiations in trade in goods. However, most NTMs are now the subject to negotiations on the rules under which they may be applied, e.g. in the areas of contingency protection and technical barriers to trade.
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Tying Governments' Hands in Commodity Taxation
Publication Date: May 1998More LessIn the 1970s, taxation of "windfall" profits from primary products and intervention in trade and production tempted governments into expansionary fiscal policies, whilst stifling the private sector and depressing growth. However, the experience of the recent coffee boom has so far been more favourable: those African countries which liberalized and left a large share of the “windfall” with the private sector, and which committed themselves to fiscal austerity via adjustment programs have shown better results in terms of fiscal stability, private sector responses and economic growth than countries which did not reform. These findings suggest that constraints on discretionary government policies are desirable, and that domestic institutions and international commitments could serve this purpose.
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Financial Services and the WTO
Publication Date: March 1998More LessThis paper analyses the results of the financial services negotiations under the General Agreement on Trade in Services (GATS) at the World Trade Organization (WTO). It shows that the negotiations have contributed to more stable and transparent policy regimes in many developing and transition countries. The wide range of market access and non-discrimination commitments should advance the process of progressive liberalization. The commitments do not compromise the ability of countries to pursue sound macroeconomic and regulatory policies. However, other aspects of the outcome do raise some concerns. First, there has been less emphasis on the introduction of competition through allowing new entry than on allowing (or maintaining) foreign equity participation and protecting the position of incumbents. Secondly, even where immediate introduction of competition was not deemed feasible, not much advantage has been taken of the GATS to lend credibility to liberalization programmes by precommitting to future market access.
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Reform in Basic Telecommunications and the WTO Negotiations
Publication Date: February 1998More LessThis paper examines liberalization of the basic telecommunications sector in a number of Asian countries and the role of the General Agreement on Trade in Services (GATS) in this process. It begins by explaining the working of the GATS as a mechanism for multilateral liberalization efforts. It then presents a description of the reforms taking place in the telecom regimes of selected Asian countries, and of the commitments these countries made in the recent GATS negotiations. The paper explores the reasons why governments have taken advantage of the GATS negotiations to make multilateral market-opening commitments, even though they were not pursuing export interests. The paper also considers the limits to what was achieved by way of liberalization commitments in the negotiations. Allowing greater foreign equity participation without liberalizing the conditions of entry may raise national welfare concerns. Furthermore, certain governments could have taken greater advantage of the opportunity under GATS to precommit to future liberalization.
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Fiscal Policy Cycles and the Exchange Regime in Developing Countries
Publication Date: February 1998More LessThe paper studies empirically fiscal policies around elections in 25 developing countries as affected by the exchange regime. It is argued that countries with flexible exchange regimes are less likely to engage in expansionary fiscal policies before elections because such policies can result in devaluations and inflation which affects government popularity adversely. The empirical results show that governments indeed try to improve their re-election prospects with the help of expansionary fiscal policies only in countries with fixed exchange rates and adequate reserve levels. For some countries, this raises doubts about the usefulness of fixed exchange rates for stabilizing the macro economy, unless reforms of the institutional framework reduce the scope for election-oriented fiscal expansion.
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Regulatory Autonomy and Multilateral Disciplines
Publication Date: January 1998More LessA major challenge for the multilateral trading system is to secure the benefits of trade liberalization without infringing on the freedom of governments to pursue legitimate domestic objectives. The difficulty lies in distinguishing between two types of situations. In one, a non-protectionist government cannot prevent certain domestic policies from incidentally discriminating against foreign competitors. In the other, a protectionist government uses a legitimate objective as an excuse to design domestic policies which inhibit foreign competition. The challenge is to devise rules which are sensitive to the difference between these two situations, exonerating the former while preventing the latter. The approach suggested in this paper is to create a presumption in favour of the economically efficient policy measure, with departures inviting justification.
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EU Import Measures and the Developing Countries
Publication Date: January 1998More LessThe EU's import policies towards developing countries are complex, stemming from important sectoral and country variations in policy. Average tariffs are modest, and, while there are tariff peaks and escalation in some areas of interest to developing countries, these are being reduced as a result of the implementation of the results of the Uruguay Round. The use of non-tariff measures has fallen, particularly as a result of agricultural tariffication, and is being further reduced in textiles and clothing. The elimination of VERs has not led to an increase in the use of alternative measures. Contingency protection falls more heavily in chemicals, iron and steel, certain textile items and certain electrical consumer goods and on Asian, Central and Eastern European and former Soviet Union countries. The operation of various factors appears to be working to mitigate the use of trade defence measures in recent years, helping to counter pressures that seem likely to arise as liberalization proceeds.
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Mercosur
Publication Date: June 1997More LessMERCOSUR is one of the most important examples of renewed world-wide interest in regional trade agreements. It may be seen as a consolidation of unilateral reforms undertaken in conjunction with major macroeconomic adjustments. The paper reviews the objectives of MERCOSUR and assesses its achievements, focusing on institutions and fulfilment of commitments. It concludes that considerable progress has been made to achieving a customs union and even beyond that towards a common (but not EU-style single) market, but there are a number of areas where progress is still to be made.
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National Treatment in the GATS
Publication Date: January 1997More LessThis paper is concerned with three problems in the interpretation of the national treatment obligation in the General Agreement on Trade in Services (GATS). First, the precise domain of Article XVII on national treatment has not been clearly delineated, particularly in relation to Article XVI dealing with market access. Secondly, there is a difference between the text of Article XVII and the structure of the schedules of commitments, which makes it difficult to interpret the scope of the national treatment obligation even for identical services supplied through different modes. The final, and most complex, problem arises in establishing the definition of "like" services and "like" service suppliers. Uncertainty about the precise meaning of the national treatment obligation may undermine the key GATS objective of creating a secure, predictable trading environment. Moreover, the extent of liberalization implied by the commitments under GATS depends on the precise choice of interpretation.
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The New Liberalism
Publication Date: January 1997More LessIn the last ten years, there has been a sea change in trade and related policies in emerging markets. This results from autonomous reforms undertaken in conjunction with macroeconomic stabilization programmes. Many non-tariff measures have been eliminated and tariffs, now the principal trade instrument, have been rationalized and reduced. Considerable increases in security of market access result from increased membership of the GATT/WTO system, which itself underwent important changes as a result of the Uruguay Round, further developed in the first Ministerial Meeting of the WTO in Singapore in December 1996. The systemic changes and the expansion of WTO membership to the transition and other economies mark a dramatic change in international economic relations.
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Dealing with Monopolies and State Enterprises
Publication Date: January 1997More LessThe objective of this paper is to assess the adequacy of multilateral rules dealing with monopolies and state enterprises, particularly in the domain of services. This paper argues that since these rules depend largely on the other obligations undertaken by Members, a variety of exemptions and exclusions have weakened the rules considerably. Furthermore, liberalization of services trade, aided by negotiations under the GATS, is leading to changes in market structure and the pattern of ownership. These changes imply that government-mandated monopolies or non-competing oligopolies are disappearing from the infrastructural services for which Article VIII of GATS is most relevant. The behaviour of dominant suppliers that often remain does not fall within the scope of Article VIII and has been addressed by creating other disciplines. The paper assesses how much emphasis needs to be placed on pro-competitive regulation to ensure competitive market conditions and argues that there is a need to strengthen Article VIII and widen its scope to deal with certain generic problems.
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