The Doha Development Agenda

• Author: Anne McGuirk
• Position: Assistant Director in the IMF's Policy Development and Review Department

The launch of a new trade round in Doha last November was a major breakthrough following the debacle in Seattle in 1999. The new round places the needs and interests of developing countries at the heart of its work, but a successful outcome for rich and poor nations alike is by no means a foregone conclusion.

Trade has been an engine of growth for the past 50 years, owing in part to eight successive rounds of multilateral trade liberalization. Over the past 20 years, world trade has grown twice as fast as world real GDP (6 percent versus 3 percent), deepening economic integration and raising living standards. Many developing countries have shared in this process, narrowing the gap with rich countries and becoming-as a group-key players in world trade. Their trade has grown the fastest and their trade relations have changed markedly from the traditional north-south pattern. They now account for nearly a third of world trade; many have substantially increased their exports of manufactures and services; and 40 percent of their exports now go to other developing countries. But even after successive trade rounds, many lower-income countries have failed to integrate into the global economy-reflecting both external and internal constraints-and the poorest countries have seen their share of world trade decline (see chart).

[ SEE THE GRAPHIC AT THE ATTACHED RTF ]

The last trade round, the Uruguay Round launched over 15 years ago, was the most ambitious thus far, and some of its agreements are still being implemented (see table). Tariff cuts covered a greater percentage of world trade than under previous rounds, and quantitative restrictions will be virtually eliminated by 2005. The round also established the World Trade Organization (WTO)-the successor to the General Agreement on Tariffs and Trade (GATT); brought international trade rules to areas previously excluded or subject to weak rules (agriculture, textiles and clothing, services, trade-related investment measures, and trade-related intellectual property rights (TRIPS)); and strengthened the dispute settlement mechanism. Developing countries played a more active role than in previous rounds and adopted the same WTO agreements as other members as part of the round's "single undertaking"-nothing is agreed until everything is agreed.

[ SEE THE GRAPHIC AT THE ATTACHED RTF ]

Yet despite these achievements, the global trading system faces major challenges. First, even after Uruguay Round commitments are fully implemented, protection will remain high and concentrated in areas of particular interest to developing countries. In agriculture, only limited progress has been made in reducing high tariffs and trade-distorting subsidies. In manufacturing, the rules for phasing out quotas under the Agreement on Textiles and Clothing allow most liberalization to be postponed until 2005. And in both agriculture and manufacturing, tariff peaks (tariffs at or over 15 percent) and escalation (tariffs rising with the degree of processing of imports) persist, impeding the diversification of developing country exports. Moreover, developing countries themselves maintain high protection in these same areas; their tariffs on industrial products are three to four times as high as those of industrial countries. And use of contingent protection such as antidumping measures is now widespread among both developed and...