Unequal Exchange: Developing Countries in the International Trade Negotiations

UNEQUAL EXCHANGE: DEVELOPING COUNTRIES IN THE INTERNATIONAL TRADE NEGOTIATIONS

Julio J. Nogués
Revised Draft April 2002
Paper prepared for the Murphy Institute Conference on “The Political Economy of Policy Reform” in honor of J. Michael Finger.

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UNEQUAL EXCHANGE: DEVELOPING COUNTRIES IN THE INTERNATIONAL TRADE NEGOTIATIONS Table of Contents
I. INTRODUCTION II. ECONOMIC INTERESTS OF EFFICIENT AGRICULTURAL PRODUCERS IN TRADE NEGOTIATIONS
1. 2. 3. 4. 5. Agricultural protection and exports Agricultural protection and financial costs Agricultural protection and growth Agricultural protection and export prices Summing-up

III. THE UNBALANCED URUGUAY ROUND 1. The UR promise 2. The unbalanced UR outcome 2.1 Market access 2.2 Implementation issues 2.3 Services 2.4 Intellectual property 3. Broken promises and principles 3.1 Promise of agricultural liberalization 3.2 Promise of transparency 3.3 Promise of reciprocity 4. Summing-up IV. MANAGEMENT, KNOWLEDGE, AGENDA, AGRESSIVE UNILATERALISM AND OTHER HANDICAPS OF DEVELOPING COUNTRIES 1. Some developing countries’ handicaps 1.1 Experience and management arrangements 1.2 The pros and cons of negotiating as a member of a regional agreement 1.3 Knowledge and trade negotiations 1.4 Private sector-public sector linkages 1.5 Financial problems and trade negotiations 1.6 Summing-up 2. Aggressive unilateralism and negotiating agendas 2.1 Aggressive unilateralism

3 2.2 Negotiating agendas and ambitious demands 3. Tentative conclusions V. MERCOSUR-EU NEGOTIATIONS 1. Background 2. Differing negotiating goals and strategies 3. The EU proposal 4. Interpreting the EU proposal 5. Illustrating the working of thenegotiating handicaps 6. Summing-up VI. DRAWING SOME LESSONS 1. 2. 3. 4. 5. 6. 7. 8. Principles in trade negotiations Blocking negotiations: a defensive strategy Management arrangements, knowledge and other domestic reforms Congressional oversight Aggressive unilateralism Other actions by developing and industrial countries

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