Policy Space for Development at the World Trade Organization

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GEGI research and policy dialogue focuses on analyzing the extent to which existing and proposed WTO rules provide adequate flexibility for emerging market and developing nations to pursue their development strategies.  Examples include financial regulation, innovation and industrialization, and environmental protection.

Publications

GEGI Working Paper Series
By Rachel Thrasher (May 2014)

Abstract

Although the concepts of fair trade and free trade have little to do with one another, in the context of public procurement, the two come head to head. Proponents of free trade argue that governments should act like private market actors when purchasing; others hold that governments are obligated to promote justice and equality by way of procurement “linkages” to social policy like fair trade. An increased awareness of the importance of sustainability has re-opened the debate over whether governments should link their spending to social concerns. In Europe a sustainable approach to public procurement is commonplace and EU enthusiasm has reached the WTO. A Revised GPA seeks to encourage broader acceptance of the agreement by including exceptions for environmental and social policy linkages. The exceptions include a general exception in cases where derogation is “necessary to protect human, animal or plant life or health”, excludes public procurement in international development assistance from the scope of the agreement, and explicitly permits governments to apply technical specifications for environmental protection. A recent case against sustainable public procurement in the Netherlands demonstrates the space given countries in Europe to select and implement their own procurement practices. Countries vary widely in their government procurement. Although the EU maintains a region-wide consensus toward encouraging ethical sourcing and consumption, other regions have not created the same supportive structure. Within the WTO, it is even clearer that policies creating obstacles to liberalized trade would be less favorable than other policies, regardless of the reason for those obstacles. We conclude that while the Revised GPA has made more policy space for governments to prioritize development and environmental goals, it does not go far enough. Future revisions of the GPA should provide policy space for horizontal linkages, including those aimed at long-term sustainability.

By Kevin Gallagher (July 2013)

Collecting and synthesizing a series of essays on the political economy of trade and development policy, this book explores the following research questions: to what extent is the global trading regime reducing the ability of nation-states to pursue policies for financial stability and economic growth; and what political factors explain such changes in policy space over time, across different types of trade treaties and across nations? Gallagher presents intriguing findings on the policy constraints on the Uruguay Round, as well as the significant restrictions that the USA places upon the ability of developing nations to deploy a range of development strategies for stability and growth.

Analyzing the factors that have led to twenty-first century trade politics being characterized by a “clash of globalizations,” this volume explores the role of economic power, institutional structure, domestic politics, currency fluctuations and ideas about globalization in effecting changes to global trade policies.

The Future and the WTO: Confronting the Challenges A Collection of Short Essays
By Kevin P. Gallagher (July 2012)

UNCTAD
By Kevin P. Gallagher (July 2011)

This note examines the extent to which international investment agreements (IIAs) may affect the ability of States to implement sovereign debt restructurings when a debtor nation has defaulted or is close to default on its debt. Numerous defaults and restructurings of the 1990s, Argentina’s debt restructuring after its crisis in 2001, as well as the recent global financial and economic crisis have all emphasized that governments may need some freedom to maneuver in this area. While thus far, Argentina is the only nation to be subject to IIA claims related to the nations’ sovereign debt default and subsequent restructuring, today’s situation where numerous countries face the risk of debt
crises, suggests that the prospect of holdouts (i.e. investors who refuse to negotiate and demand that the debt instruments be honored in full) bringing additional investor-State dispute settlement (ISDS) claims cannot be ruled out. It is therefore important to ensure that IIAs do not prevent debtor nations from negotiating debt restructurings in a manner that facilitates economic recovery and development.

Issues in Brief, No. 1
By Kevin Gallagher (April 2008)

This policy brief – the first in the Pardee Center Series titled “Issues in Brief” – reviews the current debates about the future of the World Trade Organization (WTO) and looks at why current discussions on international trade and development are stalled and also on what the implication of this stalemate might be on the longer-term future of the WTO, and of trade and development in general.

The paper concludes that: “One hopes the WTO will survive this crisis and that five years from now — and 35 years from now — there will be a WTO. Its work is not finished and there is much that it can contribute to global development. To do so, however, it will need to realign itself to its stated development goals. To survive — indeed, to thrive — it needs to redefine itself as a development institution. That will be good for the WTO, good for the future of global development, good for developing countries, and indeed good for industrialized countries.”

By Kevin Gallagher (September 2005)

This book examines how far the economic forces and rules that govern the global economy are shrinking the “policy space” available to developing countries in constructing policies to raise living standards. The contributors analyze what room for movement developing countries still have, despite global macro-economic realities, IMF/World Bank policies, and the trade rules regime of the World Trade Organization. They suggest the policies that could be put in place to strengthen developing countries.

 

In the News

Op-Eds

Government Procurement Agreement Should Permit Environmental and Social Linkages
Policy Innovations
Rachel Thrasher
June 5, 2014

WTO on the Brink, Needs a Rethink
Al Jazeera
Kevin P. Gallagher
December 3, 2013

U.S. Unprepared to Limit Swings in Food Prices
The Japan Times
Kevin P. Gallagher
December 2, 2013

Quoted

Deal to Boost Global Trade Reached at WTO Summit
The Telegraph
Kevin Gallagher quoted
December 7, 2013

WTO Faces Fight for Survival at Make-or-Break Summit
The Daily News – Egypt
Kevin P. Gallagher quoted
December 1, 2013

Next W.T.O. Head Wants a New Look at Body’s Role
The New York Times
Kevin P. Gallagher quoted
May 9, 2013

Brazilian WTO Chief Has Leverage on BRICS in Global Trade Talks
Bloomberg News
Kevin P. Gallagher quoted
May 8, 2013