Implementing the Uruguay Round Agreements: Problems for Developing Countries

Unilateral removal of trade restrictions is good economics, but it is often bad domestic politics. GATT negotiations for 50 years provided a mechanism to overcome this political incorrectness. The Uruguay Round carried multilateral negotiations into many 'new areas' with more complex economics - areas of regulation that establish the basic business environment in the domestic economy, e.g., technical, sanitary and phytosanitary standards; intellectual property law. Doing these things is costly and you can get it wrong - the economic correctness is not so simple as the economic correctness of removing trade restrictions. Making economic sense in these areas requires cost-benefit analysis, experimentation, projects tailored to specific problems. Some developing countries would benefit from reforms in the new areas, but the Uruguay Round requirements do not identify the problems that exist in developing countries and they consequently demand establishment of institutions and regulations that will impose higher costs than benefits on the countries that implement them. Implementation issues are development issues, not trade issues. The procedures of the World Bank are suited to taking on such matters, those of the WTO are not. Copyright Blackwell Publishers Ltd 2001.