| A
GLOBAL PUBLIC GOODS APPROACH
As tables 1 and 2 show, the
multilateral trade regime can be described as
a global public good in form. The regime is
available to and affects a large group of member
countries, and it has strong properties of nonrivalrous
consumption and nonexcludable
benefits (or costs).
As
more countries effectively join the multilateral
trade regime, the portion of the market
governed by this regime becomes larger
and more diverse. Hence there are also
benefits from network externalities and
greater product variety (i.e. traded goods
and services and financial products and
investment vehicles). But perhaps most
important, trade provides many countries
with important development and growth benefits.
For all these reasons the rules of the
club emphasize the expansion and nonexclusivity
of membership, as long as new members accept
existing rules.
Clearly, there is an important
distinction to be made here. The construction
of the trade regime is an issue of international
cooperation–countries see it in their interest
to cooperate in order to build and be part of
this regime. This is different from the competitive
dynamic that governs the conduct of trade itself.
On this point, the paper,
One
interesting point to take forward for further
discussion is to consider whether and to
what extent the WTO trade regime is a GPG
in form but not one in substance. That
is, if the trade regime is fast becoming
a de facto global public good in
form because a large and still growing
number of countries fall under its expanding
discipline, then the question is: Is it
also generating balanced welfare gains
for its member countries–industrial
and developing–and hence is it also
a global public good in substance?
And
if this regime, indeed, does not generate
balanced benefits for the countries that
are affected by it, then perhaps a policy
message could be that "goods" placed
in a highly stratified public domain tend
to lead to imbalanced benefits, possibly
even exacerbating and reinforcing existing
inequities.
Referring back to the quote
earlier, perhaps what is needed are "separate
cages," or a two-tiered multilateral trade
regime that takes into account the disparity
in capacity to trade between industrial and
developing countries. Some of the elements comprising
such a regime may take the form of, among other
things, stronger special and differential treatment
built into all existing and future WTO agreements,
and the more general use of "safety valves"
for particularly vulnerable countries, such
as escape clauses in the Agreement on TRIPS
in cases of national emergency. In this regard,
it might be of interest to refer to the papers:
and "Making
Global Trade Work for People," a report
published by UNDP.
The
main objective of this discussion group
is to examine these and related issues
in more detail, and start eliciting opinions
as to the appropriate policy response in
time for the Cancun Ministerial.
back to top |
