Secondly, the Uruguay Round went beyond intensifying past efforts at
reducing the barriers to trade, by extending GATT disciplines to a range
of "sensitive" commodities, like agricultural goods, textiles and apparel,
which had hitherto not been subject to the same discipline that applied to
the trade in most manufactures. Finally, the Uruguay Round touched on a
range of new issues such as trade in services, trade-related intellectual
property measures (TRIPs) and trade-related investment measures (TRIMs).
Of these "advances" it is the second set in which the results have been
particularly disappointing. The virtual standstill in textiles has already
been referred to. And in agriculture, even a commentator like trade
economist T.N. Srinivasan, who shares the free-trading bent of the WTO,
argues that: "Other than bringing agricultural trade under the discipline
of GATT rules, there is very little liberalisation. (And even in
agricultural trade coming under GATT rules, there are some exceptions.
Whereas the subsidisation of exports of manufactures is ruled out,
agricultural export subsidies are merely to be reduced but not eliminated,
let alone outlawed.) ... Although the reduction of export subsidies and
domestic support measures will be of benefit to developing-country
exporters, the possible rise in world prices of foodgrains with the
reduction in subsidised exports from developed countries will hurt
food-importing developing countries ... on balance, agricultural
liberalisation is likely to be a washout from the perspective of
developing countries." (Developing Countries and the Multilateral Trading
System: From the GATT to the Uruguay Round and the Future, Colarado:
Westview Press, 1998).
The third area of expected advance has indeed proved to be an area of
substantial loss from the point of view of the developing countries,
inasmuch as it constrains their efforts at enhancing and widening that
competitive advantage, where the limitations are more severe. This impact
is principally mediated through the agreement on Trade Related
Intellectual Property Rights (TRIPs), which defines those rights and the
mechanisms for enforcing them and for dispute settlement by WTO. That
agreement has required members to introduce legislation which provides a
sovereign guarantee that the patent rights of corporations, wherever
acquired and whether relating to products or processes, would be
protected. Such patent protection for products and processes is to apply
for a period of 20 years in almost all fields of technology. Patent
protection for products is especially significant in the chemical and
drugs and pharmaceuticals industries, where many developing countries had
found alternative processes to replicate products once standardised. But
they are proving particularly controversial in areas involving traditional
knowledge and life forms. The TRIPs agreement also limits efforts to
replicate industrial designs, such as the lay-out designs of integrated
circuits. Given the "technological gap" between the developed and
developing countries and the concentration of both existing patents and
R&D expenditure in the latter, this would be a major constraint on the
export competitiveness of domestic firms. This factor, along with the
agreement on Trade Related Investment Measures (TRIMs), which forecloses
governmental efforts to force a degree of indigenisation and domestic
linkage on international producers being provided freer access to
developing country markets, substantially increases the dependence of
developing countries on foreign firms as the medium to win and sustain
their foothold in international markets.
Overall, there are five aspects which call for attention when examining
the gains to developing countries from the implementation of the Uruguay
Round proposals: first, gains from increased access to foreign markets
have been small and partly neutralised by greater international
competition in domestic markets; second, tariff benefits have been
outweighed by non-tariff barriers in areas where developing countries have
obvious competitive advantages, as is true of labour-intensive sectors
where wage costs are an important part of total costs; third, in areas
like textiles where developing countries already have a strong
international presence, the full benefits of the Round are yet come and
would come slowly; fourth, the dependence on transnational firm strategies
and the costs and the extent of industrial restructuring would be higher
in the wake of the TRIPs agreement, necessitating special strategies in
the more-developed developing countries to enhance their technological
capabilities based on greater R&D efforts; finally, developing countries
would be increasingly hard put to follow conventional "mercantilist"
policies like the provision of export subsidies.
|