Most developing countries have accepted the WTO regime though reluctantly. The debate is still raging in many countries over the consequences of their signing the WTO treaty. The critical question that is debated is what are the risks and gains from the WTO regime for the developing countries. Some general issues have been highlighted. They are as follows:
1. Agriculture:
One area where the predominantly agricultural countries of the less developed world are jubilant is gaining major benefits in the agricultural sector. Successes in reining agricultural support programmes in the industrially advanced countries and regions such as United States, Japan and the European Union are expected to render net gains to less developed countries’ agricultural exports for the comparative and competitive advantage these agricultural countries enjoy.
However, at the same time, certain apprehensions have surfaced regarding the WTO’s ruling in favour of reduction in subsidies for agriculture, phasing out of public distribution system and compulsory market access to agricultural imports.
ADVERTISEMENTS:
2. Textiles and Apparels:
Less developed countries with an edge in the manufacture of textiles and apparels have benefited from the multi-fiber agreement (MFA) for progress in unraveling the MFA is expected to bring major benefits to these countries. Yet there is a cause for concern because the phasing of MFA is accompanied by a system of what is known as “transitional selective safeguards” whose operational details have not yet been defined.
This in turn could restrict the growth in exports of textiles by the less developed countries. Also, there are already anti-dumping laws in hands of the industrially advanced countries which they may use to restrict the textile export from less developed countries.
3. Tariffs on Industrial Goods:
ADVERTISEMENTS:
The prospects of reduction in industrial tariffs have greatly improved. Yet, the benefits are not likely to be substantial because already the tariffs on imported industrial goods are low, besides the proposed tariff cuts are likely to be concentrated in areas on less importance to developing countries.
4. Services:
In the area of services, the less developed countries notwithstanding their demands have still to work out a viable way out for the export of skilled and unskilled labour, negotiations for which are still in the very initial stages. The only compensation is that several of the areas for liberalization in the service sector are yet to be negotiated.
5. Intellectual Property Rights:
ADVERTISEMENTS:
Intellectual property is the area where new and tougher rules would put the less developed countries to greater hardship. Despite the efforts made by several of the developing countries including India, not much success has not been achieved.
For, after all, in some of the identified sectors like chemical and pharmaceutical products, biotechnology and propagation of improved varieties of seeds and microbiological processes for developing new fertilizers and pesticides the developing countries may have to make royalty payments to the industrially advanced countries.
Some of the expressed fears of the less developed countries such as non-availability of needed technology at affordable costs, the pre-empting of domestic technological capacities by the more advanced countries and the incidence of restrictive business practices by the TNCs are admittedly justified. It is in these areas the less developed countries may have to evolve a concerted policy posturing within the forum of the WTO.
6. Trade Related Investments:
ADVERTISEMENTS:
Yet another area in which the less developed countries need to evolve a concerted policy response is trade related investments. Otherwise, the current regime on trade related investments will severely jeopardize the ability of the less developed countries to regulate the foreign capital inflows in accordance with their objectives and priorities. Besides, it will also weaken the domestic capital goods sector and arrest the growth of indigenous technological capacity.