# TRADE POLICY AND MARKET ACCESS ISSUES FOR DEVELOPING COUNTRIES: **Implications** for **the Millenium Round**

# SUMMARY

Following the Uruguay Round Agreements (URA) developing countries increased their integration into the world economy. As the World Trade Organization (WTO) is about to embark on a new Round of multilateral trade negotiations, this study analyses two important dimensions of developing countries' integration in the international trading system: their own trade policies and problems of market access for their merchandise exports. The results of the analysis are then used to recommend an agenda of topics and developing country positions for the upcoming WTO negotiations.

The major innovation of this study is that it is based on a systematic review of the detailed information contained in 61 Trade Policy Reviews (CPRs) of 42 developing countries prepared for GA'fT/WTO over the period 1989-1998. The TPRs contain a great deal of detailed and authoritative information on countries' trade policies and institutions on a consistent basis and over time which has not been hitherto systematically analysed. The group of developing countries on which the study is based includes thirteen developing economies from Latin America and the Caribbean, thirteen from Asia and the Pacific, eleven from Sub-Sahara Africa and five from Europe, Middle-East and North Africa which together account for the bulk of the trade of developing members of the WTO

# The main findings and recommendations are as follows:

1. The integration of the developing countries into the multilateral trading system has been especially impressive for a group of perhaps 15-20 middle and higher income developing countries in Latin America and Asia. For many others, progress has been much slower. Following the URA, protection both through tariff and non-tariff measures appears to be greater in low- income than in middle- and higher- income developing countries. While this conclusion is subject to a number of methodological caveats, it suggests the variety of challenges and opportunities different developing countries will face in the context of future WTO negotiations.

2. The URA resulted in a major step forward by bringing the agriculture sector under the disciplines of the GATT. Nonetheless, very substantial protection continues to be present through a variety of controls and interventions that encumber intemational trade in agriculture. Various developing countries face different situations and challenges in their agricultural sector, which are likely to result in different groups of developing countries emphasizing different issues in the up-coming negotiations. There are two main groups: (a) major exporters of agricultural commodities, members of the Cairns group who would be seeking to reduce the Aggregate Measures of Support (AMS) and export subsidies provided to agriculture by developed countries; (b) traditional net food importing developing countries and others with substantial protection of agriculture which are concerned that export subsidy reduction by the developed countries will increase their import bills. These countries have been seeking to obtain an increased amount of food aid through the recently renegotiated Food Aid Convention to compensate for whatever increased costs export subsidy reduction may entail. While the revised Convention should prove of greater assistance to developing countries as a whole, and could help in a small way in dealing with some of the food security problems many face, it is not a substitute for further liberalization of agricultural trade - indeed it should be viewed as a supporting element for such liberalization. Reduced protection in developed country markets will improve market access prospects both for existing and potential exporters; while reduced export subsidies by developed countries will reduce international market distortions that impede the expansion of developing country agricultural production.

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