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Warwick Commission on Multilateral Trade

Key Trade Issues

Agriculture

Agriculture has always been among the most contentious trade issues. Agriculture represents a substantial share of income and exports in the poorest countries, but widespread protectionism prevents developing states from exploiting their advantages in agriculture. Agricultural issues are highly politicized due to the unique nature of the industry, its long history and its deep roots extending through domestic-level policies, institutions and cultures. The agricultural sector was largely excluded from the GATT/WTO until the Uruguay Round, which completed in 1994.

Agricultural protectionism includes tariffs, and non-tariff barriers, such as subsidies and other types of domestic support. The most politically-contentious of these is domestic supports, largely due to agricultural protectionist interests in developed countries. Both the EU, through their Common Agricultural Policy (CAP) and the US have been criticized for high levels of trade-distorting domestic support.

Additional agriculture-related concerns include the use of food safety standards and labelling. Most recently, biotechnology in agriculture has caused heated debates. Products such as genetically-modified organisms and meat from hormone-fed animals are largely embraced and encouraged in North America but resisted in Europe and most of Asia due to health concerns. Where does legitimate safety concern end and veiled protectionism begin?

Intellectual Property Rights

One of the newest issues on the WTO agenda is intellectual property rights. Intellectual property rights, such as patents, trademarks and copyrights, are tightly protected in most developed countries. This is not the case in many developing countries. As international trade increased, manufacturing, corporate, scientific and artistic interests in developed countries began pressing for greater international protection of their discoveries, creations and works.

The Agreement on Trade-related Intellectual Property Rights (TRIPs) was negotiated during the Uruguay Round. The TRIPs agreement does not determine national legislation, but the domestic laws of WTO members must support the intellectual property rights in the Agreement. When the WTO agreements took effect on 1 January 1995, developed countries were given one year to ensure their laws and practices conform to the TRIPS agreement. Developing countries and transition economies were given until 2000. Least-developed countries had until 2006, which was extended to 2016 for pharmaceutical patents.

The TRIPs agreement has been highly praised by many in developed countries and lamented by most in the developing world. Supporters argue that protecting intellectual property rights encourages innovation and discovery. Those objecting to the TRIPs agreement argue that it prevents technology transfer from developed to developing countries, which slows development. They also criticise the role of corporate leaders from developed countries in promoting and actually writing much of the TRIPs legislation.

A difficult issue involving intellectual property is pharmaceutical products. For example, countries like Brazil and several African countries have tried importing cheaper generic versions of expensive AIDS-related drugs to make them more affordable for their citizens. Many of these drugs have been imported from India, which traditionally has provided little protection for pharmaceutical patents and allowed a large generic pharmaceutical sector to develop. Pharmaceutical companies from developed countries argued that such practices violated the TRIPs agreement. The case was quickly dropped due to an international public outcry favouring affordable medicine for less developed countries, especially African countries suffering the AIDs crisis. As a response, greater flexibility in intellectual property rights enforcement for pharmaceutical products has been shown by developed countries, especially in severe situations such as the AIDS epidemic.

Democracy and the WTO

There are two key democracy-related critiques related to the WTO. These twin ‘democratic deficits’ have raised questions regarding the structure, procedural elements and membership base of the organization.

The first issue involves democracy among WTO members. With 150 members involved in decision making, invariably powerful members have more of a voice in most issue areas. Specifically influential are the ‘Quad Countries’: Canada, the European Union, Japan and the United States. Additionally, negotiations continue outside of the official meetings and assemblies, raising concerns about transparency and inclusion. Additionally, the small delegation sizes of developing countries do not permit them to attend each of the multiple meetings held simultaneously.

The WTO has developed a technical assistance and training program for developing country members. Also, many developing countries pool resources and share delegations in order to more effectively participate. Many argue that these efforts are far from adequate and advocate deep reform of WTO structure and procedures. Specific initiatives attempting for reform stem from NGOs and coalitions of WTO members, particularly developing countries. The key coalition is the Group of 21 (G-21), which was formed by key developing countries to promote greater pluralism.

  • Current WTO initiatives to improve developing country participation can be found on the WTO website.
The second issue involves a lack of democratic accountability to civil society. WTO representatives are not elected and non-governmental organizations (NGOs) are not able to participate in decision-making. Although the WTO is a state-based institution, a wide variety of NGOs are demanding a voice in important trade-related decisions. This issue was brought to the fore through the protests at the 1999 WTO Ministerial Conference in Seattle. The WTO has recently attempted to improve its contacts with civil society by allowing for greater participation from NGOs. These groups may obtain permission to attend Ministerial Conferences, although they are not allowed to participate. Approximately 800 NGOs attended the most recent Ministerial Conference in Hong Kong in 2005. Also, NGOs may submit position papers on trade-related issues to the WTO Secretariat for consideration.
  • Discussion of the WTO-NGO relationship and NGO position papers are available on WTO website .

Development and Equity

Not long ago, it was widely believed that any trade liberalisation would provide great benefits to all countries involved in the international trade regime. Now that the GATT/WTO system has eliminated most tariffs, there have been growing doubts concerning the optimism of development through liberalisation. It has become obvious that most international trade agreements favour powerful, developed countries, while less developed countries struggle to implement obligations negotiated in previous Rounds. Additionally, developing countries are at a disadvantage in negotiations and the dispute settlement process due to their limited funding, small delegations sizes and lack of expertise. Discontent with inequality in the world trading system was most apparent in the protests during the WTO Ministerial Conference in Seattle in 1999.

In response to these concerns, the WTO has labelled the current round of negotiations, which began in 2001, as the ‘Doha Development Round’. The WTO has promoted development-related issues in the Doha Round more than any previous Round. Specifically, the WTO has closely reviewed implementation problems for developing countries, provided greater technical assistance, and highlighted the importance of the full participation of all WTO members in negotiations. Also, issues of particular concern to developed countries, including agriculture, textiles, services and market access for non-agricultural products, have been labelled as priorities in the Round.

It is widely agreed that these measures are not enough to address the wide gap between developed and developing nations. Several initiatives have been created outside of the WTO. The most well-known is likely the Fair Trade social movement, which works to help marginalised producers and workers in less developed areas obtain economic self-sufficiency.

This topic has generated greater debate with the increasing influence of large developing countries, particularly India, China and Brazil. These countries have formed coalitions within the WTO to more effectively defend their positions on many of the contentious issues discussed on this website.

Labour and Environment: The ‘Trade-and’ Issues

Labour rights activists and environmental protectionists seek to have their interests represented through the WTO. Unlike other international organizations dealing with environment and human rights, the WTO agreements can be enforced through the dispute settlement mechanism.

Interest groups argue that these issues belong in the WTO, because they are directly related to international trade. Trade impacts the environment through transportation pollutants, increased consumption, expanded manufacturing, deforestation, and more. Trade is related to labour, largely due to human rights concerns in low-wage countries dependent upon their ability to export large quantities of low-cost products.

Additionally, manufacturers in developed countries cite the higher costs of labour and environmental regulation they face. Developed country manufacturers state that manufacturers in countries with lower standards have an unfair advantage. For the most part, developing countries are against including labour and environmental protection under the WTO umbrella. Today’s most powerful countries developed their industries free of such regulations and currently developing countries argue that they should be allowed to do the same.

Other opponents of adding trade and environmental issues to the WTO agenda argue that it opens a door for veiled trade protectionism and discrimination among trading partners.

The Doha Development Agenda does include limited negotiations on trade and environment.

The WTO does not include labour standards in its core agenda. According to the WTO, the International Labour Organization (ILO) is the appropriate body to set and deal with labour standards. The WTO supports the work of the ILO.