Research Paper 46, July 2012

Whilst the first steps towards Asian trade cooperation stated in 1970s, it was the Asian Financial Crisis of 1997 that triggered Asian efforts at monetary and financial integration. This paper argues that the conditions for Asian monetary integration are not conducive but that efforts at monetary cooperation should proceed at three fronts – exchange rate cooperation, coordination of capital flows control, and strengthening of regional financial liquidity management as in the Chiang Mai Initiative and regional surveillance.

Research Paper 45, June 2012

The new research paper discusses on contexts and recent negotiations in Technology Transfer, Sustainable Development and Climate Change. In terms of proprietary rights, the author categories technologies and related products into three domains: the Public Technologies; Patented Technologies and Future Technologies. After revealing the Effects of Patents on Access to Climate-Related Technologies, a number of measures are discussed to address problems arising should patents become a barrier to the transfer of climate related technologies.

Research Paper 44, March 2012

This paper argues that the unprecedented acceleration of growth in the developing world in the new millennium in comparison with advanced economies is due not so much to improvements in underlying fundamentals as to exceptionally favourable global economic conditions, shaped mainly by unsustainable policies in advanced economies. The only developing economy which has had a major impact on global conditions, notably on commodity prices, is China. However, growth in China has been driven first by a rapid expansion of exports to advanced economies and more recently, after the global crisis, by an investment boom, neither of which is replicable or sustainable over the longer term. To maintain a rapid growth, export-led Asian economies need to reduce their dependence on foreign markets. For Latin American and African commodity exporters, gaining greater autonomy and achieving rapid and stable growth depend on their success in reducing reliance on capital flows and commodity earnings – the two key determinants of their growth which are largely beyond national control.

Research Paper 43, March 2012

This paper examines possible modalities of collaboration for research and development (R&D), understood as comprehensive of scientific studies and of activities for the generation of new processes and products and the improvement of existing ones . It briefly discusses, first, the various sources of technology for adaptation to and mitigation of climate change. Second, the paper examines different elements relevant for fostering cooperation in R&D and the modalities that such cooperation may adopt, having in view experiences made in other areas of science and technology. Finally, an analysis of the cooperative model used to promote the development and diffusion of seeds in the ‘green revolution’ is presented, with the aim of exploring its possible applicability to the case of environmentally sound technologies.

Research Paper 42, December 2011

This South Centre Research Paper is a contribution to the debate and reform process of the WHO to enable it to respond to the health and health policy challenges of the twenty-first century. More specifically, this paper addresses the issue of the pharmaceutical innovation system within the perspective of access to medicines, exploring possible structural changes in the current system. To do so, it addresses the question of how the constitutional powers of the WHO, often ignored by the Organization itself, can contribute positively to a paradigm shift in biomedical research stimulation.

Research Paper 41, September 2011

Despite the decline in the discovery of new chemical entities for pharmaceutical use, there is a significant proliferation of patents on products and processes that cover minor, incremental innovations. A study conducted in five developing countries - Argentina, Brazil, Colombia, India and South Africa - evidenced a significant proliferation of ‘evergreening’ pharmaceutical patents that can block generic competition and thereby limit access to medicines.

Research Paper 40, July 2011

There are many challenges and obstacles facing developing countries in moving their economies to more environmentally friendly paths. On one hand this should not prevent the attempt to urgently incorporate environmental elements into economic development. On the other hand, the various obstacles should be identified and recognised and international cooperation measures should be taken to enable and support the sustainable development efforts. The conditions must be established that make it possible for countries, especially developing countries, to move towards a “green economy.”

Research Paper 39, May 2011

Parties to the United Nations Framework Convention on Climate Change (UNFCCC) have recognized the need to “urgently enhance implementation of the Convention in order to achieve its ultimate objective in full accordance with its principles and commitments” (Preamble, Bali Action Plan).

Research Paper 38, May 2011

The Millennium Development Goals (MDGs) are in the news. It is ten years since these were adopted by the United Nations. And, in late September 2010, political leaders from across the world gathered in New York for a meeting of the General Assembly to discuss the past decade and the next quinquennium. This is the life span of the MDGs which are the focus of attention among people for different reasons. Some are concerned with the past to review progress. Some concentrate on the present to consider the implications of the financial crisis and the Great Recession in the world economy. Some think about the future and how to traverse the remaining distance. The conjuncture is obviously important and so are the reasons. But the object of this paper is different. It seeks to discuss MDGs in prospect rather than retrospect. But it does not enter into a discussion on the next five years. The object is to reflect on possibilities and options beyond 2015.

Research Paper 36, April 2011

As is common knowledge, the Nagoya Protocol was rushed through in the final hours of COP10 in an attempt to secure a binding instrument on ABS. As a result the Protocol represents, at best, a partially negotiated instrument. In the process, transparency, legal certainty and balance seem to have been sacrificed. The silver lining, however, is that the generalised provisions, crafted in an attempt to accommodate seemingly polarised positions, provide considerable flexibility. It is for developing countries to exercise the options open to them as a result, as outlined in this article, through national law as well as through COP/MOP at the crucial implementation stage after the Protocol is ratified. Hopefully, this will finally provide the world with an instrument truly supportive of national ABS laws and policies to end biopiracy and restore fairness and equity in the exchange of genetic resources across the globe. For, ultimately, only on the basis of fair and equitable sharing of benefits can the conservation and sustainable use objectives of the CBD be finally realized.

Research Paper 37, March 2011

The South Centre is releasing a new research paper by its Chief Economist, Y?lmaz Akyüz.

The paper argues that the policy of quantitative easing and close-to-zero interest rates in advanced economies, notably the US, are generating a surge in speculative capital flows to developing countries in search for yield and creating bubbles in foreign exchange, asset, credit and commodity markets. This latest generalized surge constitutes the fourth post-war boom in capital flows to developing countries. All previous ones ended with busts, causing serious damages to recipient countries.  The conditions driving the current boom in capital flows and commodity prices are not sustainable and they are likely to be followed by a sharp downturn.  Various scenarios that can bring them to an abrupt end are discussed.  Examining the policy responses and financial and macroeconomic developments in major emerging economies, the paper concludes that deficit commodity-rich economies that have been enjoying the dual benefits of global liquidity expansion - that is, the boom in capital flows and commodity markets - are most vulnerable to a possible reversal, and urges them to manage capital flows more effectively.

Research Paper 35, January 2011

The purpose of this research paper is to describe, above all, a negotiating process which many have described as historical. More than an analysis on the subject of public health and intellectual property, this is an analysis of a negotiating process which could change the course and the nature of an organization such as the WHO. It is still too early to say whether this was achieved are not, but we are starting to write a chapter in the history of public health in the 21st century.

Research Paper 34, November 2010

This Research Paper sets out the relevance of international human rights obligations in light of the multiple constraints climate change poses to the sustainable development of developing countries. The paper demonstrates that the framework provided by the United Nations Framework Convention on Climate Change (UNFCCC) is particularly suitable to facilitate rights-based cooperation in accordance with the principle of affirmative action and the legal duty of all states to cooperate to realize human rights. In addition, the paper conducts an assessment of developed countries’ compliance with their UNFCCC obligations revealing a persistent compliance gap.

Research Paper 33, November 2010

This South Centre Research Paper aims to contribute to the discussion on the issues of environment, development and equity that are at the centre of the climate, development and equity nexus.

Research Paper 32, November 2010

This South Centre report argues that the G20 agenda misses some of the key issues that need to be dealt with in order to effectively reform the international monetary system so as to avert future global financial crises. The missing issues include enforceable exchange rate and adjustment obligations, orderly sovereign debt workout mechanisms and the reform of the international reserves system.

The paper also points out that there are no effective rules to control the unstable global financial market, no multilateral discipline over misguided monetary and exchange rate policies, and national policy makers are preoccupied with resolving crises by supporting those responsible for these crises rather than introducing measures to prevent future crises. This may sow the seeds for future problems.

Research Paper 31, July 2010

This Research Paper is a legal analysis of the EC-Cariforum Services and Investment Chapter. It demystifies the many complex technical details in the EPA text and illustrates where this services and investment template goes beyond the WTO's GATS. The paper highlights implications for other developing countries embarking on similar negotiations with the EU.

Research Paper 30, May 2010, Updated in February 2012

This paper discusses the principles and scope of activities of the world trade organization, addresses the imbalances in the existing rules and the problems faced by developing countries. Then it elaborated on various specific issues such as, the “Singapore issues”, labour and environmental standards, the “development issues”, market access negotiations and, at last, its functioning in decision-making system.

Research Paper 29, May 2010

The new released South Centre Research Paper is to examine some important aspects of the linkage between climate change and trade-related issues. In particular, the paper looks at developments in policies taken by governments and the inter-governmental processes to deal with the crisis in climate change, including within the international climate change regime, the United Nations Framework Convention on Climate Change (UNFCCC), and their inter-linkages with the multilateral trade regime, in particular the World Trade Organization (WTO).

Research Paper 28, May 2010

South Centre has released a Research Paper which examines the impact of the external shocks from the global economic crisis on industrial development of Least Developed Countries (LDCs).  These countries are heavily exposed to external shocks because of their extensive trade with the rest of the world.  Yet, they are marginalized in terms of their share in international trade and output.  They suffer from structural weaknesses and chronic balance-of-payments and fiscal deficits.  They are heavily dependent on commodity exports and external financing.The global economic crisis is a wake-up call for LDCs to reconsider their long-term industrial and development strategies.  

Research Paper 27, April 2010

The South Centre has published a research paper by its Special Economic Advisor and Chief Economist Yilmaz Akyuz, addressing export dependence and their contribution to growth in China and its supplier developing economies in East Asia, in the context of re-examining their growth strategies in light of the global economic crisis and medium term global growth prospects.

Research Paper 26, March 2010

The South Centre releases a new research paper which throws interesting light on the global economic imbalances, the situation in the major countries, and what needs to be done.

The paper recognises that the US economy has to adjust, and its over-consumption problem has to be tackled. But in the debate on the global economy, attention has focused on US-China relations, to the neglect of the role of Germany and Japan.

Research Paper 25, November 2009

This research paper looks at the extent of compliance by developed countries listed in Annex I of the UNFCCC of their obligations under the UNFCCC to undertake mitigation and to provide financing, technology, and capacity building to developing countries.

Research Paper 24, May 2009

This new paper, authored by the Centre's Special Economic Advisor, Dr Yilmaz Akyuz, deals with the global financial crisis and developing countries.

The first part is on what is needed to support the required policy response in developing countries. The second part is on the required reform to the international financial architecture.  A summary of policy conclusions and proposals is at the end.

Research Paper 23, June 2009

This paper suggests that by using biotechnology, traditional knowledge holders may obtain economic gain, through innovation and research and development based on the traditional knowledge. It also explores what are the obstacles in the development of biotechnology-based traditional knowledge innovation.

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South Centre Research Paper 22,  July 2009

This paper examines the scope of policy space available to integrate economic, social and environmental concerns under the World Trade Organization’s (WTO) Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). By comparing the amount of discretion available for domestic public interest measures in two other core areas of WTO regulation, i.e. trade in goods and services, the paper concludes that the notion of general exceptions under the General Agreement on Tariffs and Trade (GATT) and under the General Agreement on Trade in Services (GATS) finds no equivalence in TRIPS.

South Centre Research Paper 21, June 2009

Standards cover nearly all fields, including pharmaceuticals, food production, the environment, energy, information and telecommunications. Problems arise when IPRs are included in standards and a balance cannot be struck between the private interests of IPR owners and the integrity of standardization. This paper illuminates the manipulation on the part of IPR holders in the context of standardization resulting in a severely distorted market. It further examines the limits and failure of current 'solutions' related to the exclusionary effects of IPRs in international standards and attempts to expound the importance of this theme around the following questions:

South Centre Research Paper 20 - May 2009

The importance of industrialisation as an engine of economic growth and development cannot be overstated. Industrial production creates job opportunities at higher skill levels, facilitates denser links across the services and agricultural sectors, between rural and urban economies and between consumer, intermediate and capital goods industries. Given the importance of industrialisation and the pressure weighing on industrial policies, it is thus useful to survey the extent to which industrialisation is a policy priority and is being pursued.

South Centre Research Paper 19 - December 2008

The objective of this research paper is to extract lessons from the negotiation process of SECURE, an initiative to promote TRIPS-plus-plus standards on IP enforcement at the WCO, and assist developing countries in addressing the emerging global challenges in IP enforcement initiatives. Although the proponents of SECURE had adopted a fast-track approach for its speedy conclusion, effective coordination among developing countries foiled the attempt to adopt the SECURE draft at the June 2008 WCO Council and led to the suspension of the SECURE Working Group at the WCO Policy Commission in Argentina in December 2008.

South Centre Research Paper 18 - December 2008

This article challenges the conceptual basis of patent counts being relied upon as indicators of innovation for assessing cross-country performance and for the purposes of understanding the geography of innovation in a particular location. It has been argued that the WIPO Patent Report’s conclusion on changing the geography of innovation based on a sharp rise in the numbers of patents filed in north-east Asia, with an emphasis on China, should be interpreted with caution. The drawback of such an international comparison not only relates to how properly to interpret the figures on patent filings and the “resident patent filings”, but also to high heterogeneity in the value of patents.

 

South Centre Research Paper 17 - July 2008

The experience of developing countries, individually and collectively, during the more recent period of globalization has only confirmed that developing countries need to be consistent and united in promoting their views and interests, and that to succeed it is also essential for them to join forces and pursue group action in most domains on the development agenda. With a number of developing countries having made important progress and strides in development and economic growth, the collective weight of the South should be used for launching major policy initiatives, as well as to counter the systemic economic and political imbalances that favor the developed countries.

Research Papers 16 - January 2008

EXECUTIVE SUMMARY

Health is a human Right. The Right is bestowed on human beings through national constitutions and various international legal instruments that have been signed and ratified by many, if not all, governments of the world. Inherent herein is the Right to access basic health services; which imposes an obligation on States to ensure that these services are universally accessible to all their constituents. Beyond the obligatory element, universal access to basic health services is also a development goal for which many governments strive to achieve. In a situation where the health sector in many parts of the developing world, particularly in sub-Saharan Africa, is in very weak condition, attempts of governments to deliver on this obligation face many challenges.

An increasingly important phenomenon in globalization is the movement of health service suppliers to provide services. While a lot of this movement takes place within and among developed countries, the trend between developing to developed countries is more concerning. As HIV/AIDS, malaria, tuberculosis and other treatable diseases continue to claim lives in untold proportions on the African continent, the exodus of health service suppliers raises serious issues, and has taken centre stage at various international fora.

 

Research Papers 15 - January 2008

(This Paper is now available in French and Spanish...... 15 August 2008)

EXECUTIVE SUMMARY

Twelve years ago the TRIPS Agreement introduced global minimum standards of intellectual property protection and enforcement. To the extent that the substantive obligations under the Agreement have now been widely implemented in national legislation, developing countries are facing increased pressure to bolster intellectual property enforcement.

The European Union, Japan and the United States are undertaking new efforts to strengthen and harmonize at the international level the various means by which countries seek to enforce intellectual property rights. To boost the agenda they have jointly announced plans to negotiate a new international anti-counterfeit treaty independently of WIPO and have made intellectual property enforcement a priority issue for the G8.

This research paper provides a broad overview and analysis of the changing multilateral framework for intellectual property enforcement and the challenges that it presents for developing countries. It examines current multilateral obligations and traces developments in the field of intellectual property enforcement in various multilateral fora, including the WCO, WHO, WIPO, WTO and Interpol. Finally, it analyses the approach of the United States and European Union to strengthening intellectual property enforcement in third countries through regional, bilateral and unilateral mechanisms such as regional and bilateral agreements.

 

Research Papers 13 - August 2007

by Dalindyebo Shabalala

EXECUTIVE SUMMARY (excerpt)

The last two decades of the 20th century saw a revolution in the nature of information and the way that it can be created, used and transmitted. Vast opportunities have been opened up. Developing countries, that have insufficient capacity to generate, disseminate and effectively utilize educational information and knowledge, may finally be in a position to accelerate their development.

Digital and internet content is the key to these opportunities. With it, the cost of producing, copying and disseminating any piece of information approaches zero, and any person with access to a computer and the internet can be as powerful a distributor of information as a major company. The major content industries have had their primacy over production and distribution channels challenged. Many developing countries have not fully analyzed the policy implications of access to, and control over, digital and internet content. This paper analyzes the implications of digital and internet content policy for access to knowledge in developing countries and makes some initial recommendations for developing countries. By bringing together several different strands of discussions and analyses ongoing at national and international levels, it aims to provide a direction for further research and policy analysis, by laying the groundwork and creating awareness of the relevance and scope of digital and internet content for developing country policymakers.

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Research Papers 12

EXECUTIVE SUMMARY

Horticultural trade, especially fresh fruits and vegetables from Sub-Saharan African to European market, has received a great deal of attention over the past decade due to the rapid and sustained growth of its exports to Europe. This impressive growth has undoubtedly contributed to increased national incomes and has reduced rural poverty in Sub-Saharan Africa. Good examples in this respect are Kenya, South Africa and, to some extent, Zimbabwe. Despite this growth, the inclusion and proportion of the rent obtained from this lucrative business for smallholder farmers, who in the past used to be the major players, have been worsening over the span of the horticultural trade. One of the major contributing factors is the recent changes and dynamism of the global governance of fresh fruits and vegetables value chain. The changes of governance of global value chains for FFV from the market based coordination to the explicit vertically integrated coordination, coupled with other factors such as stringent phytosanitary measures, private standards like EurepGAP, and the increased consumers’ demand and choices, have led to the exclusion of smallholder farmers in the value chain because of their failure to comply with different requirements and standards. This poses a potential threat to the efforts of addressing chronic poverty and well being of the rural poor in the region.

Thus, the purpose and scope of this paper were: to investigate, compile and analyze concrete evidence regarding the nature of changes in the governance of fresh fruits and vegetables value chain and their causes; to identify the opportunities and challenges stemming from these changes and what determine success and failure in the new future governance and architecture; to see how the competitive advantage of FFV producers is affected by the changes in the governance of FFV value chains; to discuss the implication of the changes for the aspirations of economic diversification of commodity dependent developing countries. Finally, the paper provides recommendations on copping mechanisms, private sector strategies, and public policy responses that would enable developing countries’ producers, taking into account ownership and equity considerations, to appropriate a fair share of the rents in the FFV value chains.

 

A Development Analysis of the proposed WIPO Treaty on the Protection of Broadcasting & Cablecasting

Research Paper 9 - January 2007

by Viviana Munoz Tellez and Andrew Chege Waitara

Executive Summary (excerpt)

Since 1998, Member States of the World Intellectual Property Organization (WIPO) have discussed the creation of a new international instrument for the protection of broadcasting organizations. It is possible that final negotiations on a treaty on the protection of broadcasting organizations, including cablecasting organizations, will be initiated and conclude sometime in 2007.

Research Papers 10

EXECUTIVE SUMMARY  (excerpt)

There has been widespread concern for many years over the very abstract nature of orthodox economic theory, especially that of the neo-classical school which has dominated the profession since the late 19th century. Such disquiet is frequently felt among non-economists, but a great many dissident economists have also expressed their disquiet over the years. A large part of the difficulty centres on the concept of “perfect competition”, not least the explicit removal from the basic theory of economics of the notion of market power.

This is of importance for development today for two reasons. Firstly, the pressure placed on developing countries since the 1980s has been to liberalise, deregulate and open up markets in all areas of their economies; that pressure continues in spite of extensively reported evidence of its damaging effects. Secondly, there is specific concern in areas of trade which are vitally important to developing countries, and the poorest countries in particular - agrarian in economic structure and commoditydependent in international trade as they are. In recent years, many people who have investigated the crisis of commodity prices have linked it closely with declining market power among agricultural producers, combined with excessive power at the buyers’ end of international supply chains.

This paper argues that the bias of conventional economics needs to be replaced with a more realistic theoretical basis, which will hold market power at its core. It can be divided into three parts. First of all the paper discusses the challenges to the basis of economic theory that have been posed over a long period, and especially challenges to the fundamental concepts of perfect competition and general equilibrium. Along the way, it notes the astonishing number and variety of leading economists who have themselves commented on their discipline’s failure to explain adequately how markets work and how prices are formed, although one might have thought that those were at the very heart of its subject matter.

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Research Papers 5

INTRODUCTION

“There is on the question of commodities a sort of conspiracy of silence. The solutions are not simple… But nothing justifies the present indifference.” President Jacques Chirac of France, in his address to the Twenty-Second Summit of the Heads of State of Africa and France, 20 February 2003(As quoted in UNCTAD, 2003a)

Although the structure of International Trade has changed significantly in favour of manufactures, primary commodities remain extremely important for several developing as well as Least Developed Countries. A large number are still dependent on a limited basket of primary commodities for their exports. For example, Nigeria is predominantly dependent on petroleum and cocoa; whereas 95%of Ugandan exports consist of coffee and 95% of Zambian exports consist of copper and zinc. Due to their inherent peculiarities, primary commodities face extreme price volatility in the short run and secular decline in the long run. This adversely affects primary commodity growers directly, and severely hampers the ability of the Governments of these countries to improve the welfare of their impoverished populace. More than a billion people are still dependent on the production and export of primary commodities in these countries, especially in the Highly Indebted Poor Countries (HIPC), African, Caribbean and Pacific (ACP) countries and the Sub-Saharan African countries (SSA). Even today a major portion of these populations earns less than USD 1 a day. Therefore no strategy aimed at attaining the ‘Millennium Development Goals’1, especially that of halving the number of extremely poor people by 2015, will succeed without a conscious effort to address the issues of primary commodities2.

Several attempts have been made in the past towards ensuring commodity price stabilization commencing with the Havana Charter. They include, among others, International Commodity Agreements, Marketing Boards and International Compensatory Financing Mechanisms. Unfortunately, none of them proved to be satisfactory and primary commodities remain an area of concern.

Commodities, today, are plagued by several issues, and just a few are quoted here: a) market access, b) value chain, c) subsidies, d) price volatility and e) a long-term secular decline in prices.

This paper is an endeavour to explore the Export Earning Instability experienced by the Commodity Dependent Developing Countries (CDDCs) originating from price volatility and its associated issues which “...constrain the ability of many developing countries to attain a path of stable and sustained growth and employment creation that could benefit all segments of their population and allow them to reach the [Millennium Development Goals] MDGs” (UNCTAD, 2005). It also attempts to suggest better policy options keeping in mind the lessons learnt from past efforts.

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Research Papers 2

EXECUTIVE SUMMARY

The past few decades have seen a huge surge in international trade that has affected developing countries as well as the world’s largest economies. However, while some countries have seen an associated increase in wealth, others seem to have been left behind. One of the key reasons for this seems to be that least developed countries have specialized in those parts of the production chain that do not generate large profits. Resource constraints have prevented developing country producers from participating in activities that require a large amount of investment. In commodity markets, these activities (such as processing and marketing) tend to be undertaken by large multinational companies based in developed countries. Due to their size, such companies have considerable market power as buyers, and can ensure that input prices remain low. This, coupled with the low responsiveness of demand to changes in income and price, has led to a long-term decline in the price of primary commodities. Hence, concerted measures must be taken to improve the welfare of rural farmers in the poorest countries in the world.

Policy measures may help to improve this situation by: (a) attempting to address the asymmetry in bargaining power between producers and their large vertically-integrated customers; and (b) assisting developing countries in diversifying into sectors where larger profits may be made.

At the national level, solutions might include: (a) implementing competition law according to the needs of developing countries (i.e. the protection of all powerless groups, including producers in commodity markets) so that claims related to buyer power can be addressed; (b) redesigning and improving the operation of producer groups (perhaps involving a role for State Trading Enterprises) in order to organize production and ensure compliance with quality and safety standards; (c) developing a comprehensive strategy such that the competition component in each type of government policy (industrial, trade, macroeconomic, etc) is focused towards overcoming the problems arising from concentration.

At the multilateral level, there are further possibilities: (a) any discussion of competition law at the international level should be framed according to the needs of developing countries and the development agenda and not in terms of market access; (b) international commodity agreements could be an alternative to the problem of asymmetry. However, it would be necessary to restructure their design and operation such that some of the shortcomings observed in the past are overcome; (c) there is an urgent need to keep pressing for a fair trade of the use of subsidies and tariff escalation in agricultural markets; (d) developing countries may find important support at the multilateral level to help them overcome problems of scarce resources and expertise.

At the regional level, suggestions include: (a) coordination of competition policy among smaller groups of countries; (b) cooperation to allow synergies which could contribute to solving the problem of the lack of resources faced by certain countries; (c) developing a regional competition law in order to increase developing countries’ leverage in negotiating cooperation agreements with antitrust authorities from large countries.

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Research Papers 3

INTRODUCTION

This year has seen how governments and individuals can respond with immense energy and generosity to relieve the suffering of people caught up in natural disasters. The man-made crisis affecting the markets of tropical commodities is every bit as devastating as any of these disasters, yet not only is there very little being done to address the problem but very few people are even aware of it.

This paper is concerned with the relationship between the conditions under which three beverage crops, coffee, cocoa and tea, are produced and traded, and the welfare of the men and women who produce these commodities. An examination of this topic, however, reveals several important misconceptions in current development thinking that extend beyond the limits of the beverage crop industry. Such an examination may also offer some guidance on what kind of measures need to be taken to significantly strengthen the economic prospects of the hundreds of millions of people who make their living from the land in developing countries

The central features of the markets of these three beverage commodities have been the very significant fall in their market price over the last twenty-five years and the fact that the producers of these products, smallholders and plantation workers, are receiving a smaller and smaller share of their eventual retail price.

In the case of coffee and cocoa, the world market price has fallen to less than one quarter of its value in 1980 and the price of tea has more than halved during that period. The World Bank’s monthly index of beverage crop prices (which averages prices for coffee, cocoa and tea) declined by 71% between 1997 and 2001. Although prices, in dollar terms, have increased a little since then, the value of the dollar itself has decreased by a third against other major currencies since that time.

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Research Papers 4

INTRODUCTION (excerpt)

Note: Specialized terms related to nano-scale technologies are underlined in this document and are defined in the glossary.

Commodity production is the mainstay of the economy in most developing countries. According to UNCTAD, commodity dependence is measured by the share of the three leading commodities in a given country’s total exports. The bigger the share, the more dependent the country is. Commodity dependence and poverty are closely intertwined. Commodities provide the primary source of income for the South’s rural poor. According to the Common Fund for Commodities, of the two and a half billion people engaged in agriculture in developing countries, an estimated one billion derive a significant part of their income from the production of export commodities. Ninety-five out of 141 developing countries depend on commodities for at least 50 per cent of their export earnings; 46 developing countries depend on three or fewer commodities for more than half of their total export earnings.(See Appendix, Table 1, for ranking of countries based on leading three export commodities.) The challenges posed by commodity dependence are myriad and complex. The defining feature of commodity dependence is a high degree of economic vulnerability due primarily to the persistent problems of price declines and volatility, trade-distorting subsidies, unfair trade barriers and a high degree of market concentration.

Strategies to address the economic vulnerability of commodity dependent developing countries frequently centre on efforts to reduce trade barriers and promote a fairer international trading system. However, the emphasis on trade alone is not sufficient, particularly in the light of rapid advances in nano-scale science and technologies. In a very real sense, technology is poised to trump trade as the defining feature of comparative advantage in the 21st century. In the coming decades, nano-scale technologies could make geography, raw materials, and even labour, irrelevant.

This report provides a brief introduction to nano-scale technologies and examines their potential impacts on commodity dependent developing countries. Nanotechnology refers to the manipulation of matter on the scale of atoms and molecules – where size is measured in billionths of metres. Below about 100 nanometres (nm) materials can have different or enhanced properties compared with the same materials at a larger scale. The UK’s Royal Society and Royal Academy of Engineering describe nanotechnologies as “the design, characterization, production and application of structures, devices and systems by controlling shape and size at nanometer scale.”

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Research Papers 1

INTRODUCTION

A number of developing countries,1 and especially least developed countries (LDCs), rely on agriculture for their food security, export earnings and rural development. It has been estimated that the agricultural sector accounts for between 30 per cent and 60 per cent of gross domestic product (GDP) for many of these countries, and is the major source of foreign exchange. The Food and Agriculture Organization of the United Nations (FAO) (2002) noted that the economies of many developing countries depend on the exports of one or a few commodity exports, making them particularly vulnerable to price variations on specific commodities. It noted that single commodity-dependence is more pronounced in tropical regions, and notably so for specific tropical products including sugar, coffee, bananas, cotton lint and cocoa beans. The variability and decline of commodity prices is well documented (FAO, 2005). It erodes the competitiveness of commodities exported from non-subsidizing developing countries, discourages investment and expansion of their food exporting sectors and, in the event that developing countries depend heavily on agricultural exports, worsen their terms of trade.

According to the FAO’s State of Agricultural Commodity Markets (2005), the variability and decline in international agricultural commodity prices has serious implications for developing countries that are highly dependent on commodity export earnings, especially from traditional tropical crops. Since tariff escalation in agricultural markets is regarded as one of the major factors hindering the processing of traditional products for export, analysts have explored the potential for exporting non - traditional fresh fruits and vegetables to QUAD countries (Canada, the EU, Japan and the United States). These are valid alternatives because first, tropical fruits and vegetables are not usually cultivated in QUAD countries and therefore, their trade is not distorted by domestic producer support measures. Secondly, consumer tastes in QUAD countries are diversifying into ‘exotic’ tropical fruits and vegetables. The FAO for example, is currently helping market players to develop international trade for organic mangoes and pineapples produced in Sub-Saharan Africa.

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T.R.A.D.E. Working Papers 25

EXECUTIVE SUMMARY

With the increasing political and economic integration that accompanies globalisation, a growing number of international agreements now restrict the national ‘policy space’ of developed and developing countries alike. In order to assess the impact of international agreements on policy space, it is instructive to examine national policy space as a sub-space of the universe of policy options available to a country in an ideal world without policy constraints. From such an examination, this paper illustrates how domestic ‘endogenous’ constraints and international ‘exogenous’ constraints may significantly restrict a country’s access to national policy space for development. Sources of endogenous and exogenous constraints are reviewed, and ways that international environmental, social and economic agreements can both reduce and extend national policy space are outlined.

The paper demonstrates how developing countries’ national policy space is affected by agreements comprising the Multilateral Trading System (MTS) under the World Trade Organization (WTO). Focus is given to examining the narrowing range of policy options permissible under international trade and finance agreements, and the adverse effects this can have on countries in earlier stages of economic development. This contraction of policy space has recently been identified as a concern in international trade negotiations. In particular, agreements within the WTO contain provisions, and economic assistance arrangements of international financial institutions include conditionalities, that prohibit developing countries from implementing a range policy interventions designed to stimulate the growth, industrial development and diversification of their national economies. These effects are reviewed with the finding that the playing field resulting from international trade agreements that have ostensibly equivalent rules for all contracting parties, may provide a much smaller policy space for developing than developed countries because of differences in initial conditions and national policy implementation capacities. Efforts to establish a level playing field for international trade must recognise and address this disparity.

After assessing the scope of policy space accessible to developing countries, the paper suggests what can be done at national and international levels to ensure that available policy space is effectively utilised, and when existing space is insufficient to advance national development objectives, it examines ways to expand policy space in a manner that is consistent with developing countries’ existing WTO commitments. It is argued that special and differential treatment (S&DT) for developing countries under the MTS needs to be enhanced and made more actionable and effective in order to provide developing countries with essential national policy space for development. Finally, general areas where improved S&DT is needed, and should be pursued by developing countries in the ongoing Doha Round of WTO negotiations, are summarised.

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T.R.A.D.E. Working Papers 22

INTRODUCTION (excerpt)

At the turn of the twenty-first century, the development of economic globalization is accelerating and the interdependent relationship between nations is deepening. The World Trade Organization (WTO), the so-called Economic United Nations, has been in operation for more than ten years. In this context, the world trading system of global multilateralism is further strengthening. However, strong unilateralism, the adversary of global multilateralism, originating from the contemporary sole superpower, the United States, has not been ready to concede voluntarily to the WTO multilateralism. During the latest decade, this superpower has been persistently, and by hook or by crook, imposing obstacles to impede the solidifying and strengthening of global multilateralism in the hope of maintaining its economic hegemonic status of unilateralism. Usually such unilateral behaviour is conducted under the camouflage of defending U.S. sovereignty, safeguarding U.S. interests, and enforcing U.S. law. New evidence of this is the mighty disturbance of the U.S. Trade Act’s Section 201 and the chain of disputes ignited by the United States in March of 2002 within the WTO, specifically in the area of the international steel trade. These disputes were collectively decided by the WTO Panel in United States – Definitive Safeguard Measures on Imports of Certain Steel Products.

Taking a macro view, the recent disputes concerning the U.S. Trade Act’s Section 201 (Section 201 Disputes) are nothing but the third big round of confrontations between U.S. unilateralism and WTO multilateralism during the last decade. Its occurrence is never occasional or isolated. It has been closely connected with, and continues from, the first and second big rounds of the same confrontation: “The Great 1994 Sovereignty Debate” in the United States, and the disputes over the U.S. Trade Act’s Section 301 (Section 301 Disputes) that occurred in the WTO during 1998-2000.

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T.R.A.D.E. Working Papers 3

INTRODUCTION: THE ROLE OF STANDARDS AND REGULATIONS (excerpt)

Countries require that domestically produced and imported goods conform to regulations and possibly adhere to standards. The number of standards and regulations is constantly increasing in most countries because of the expansion in volume, variety and technical sophistication of products manufactured and traded. Nowadays, standards and regulations aim at complying with a variety of aims and tasks. Some of them are traditional -- such as minimizing risks, providing information to consumers about the characteristics of products, providing information to producers about market needs and expectations, facilitating market transactions, raising efficiency and contributing to economies of scale. Other are less traditional -- such as serving as benchmarks for technological capability and network compatibility and enhancing technology diffusion. Standards and regulations respond also to growing public demand, often voiced by consumer associations and environmental groups, to have in the market products which have minimum detrimental effect on the environment, display clear information regarding their possible impact on health and respond to high quality requirements. Because the tasks that standards and regulations aim to fulfil have expanded and deepened, the number of interested parties involved in setting-up standards and regulations is also increasing, with the participation of groups such as consumer and environmental organizations, which were not previously involved in these activities.

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T.R.A.D.E. Working Papers 2

INTRODUCTION

One of the major issues in multilateral trade negotiations and in the implementation of multilateral trade rules is the extent to which the rights and obligations of developing countries, on account of their lower levels of development, should differ from those of developed countries and how this should be achieved. The manner in which countries at different levels of development are treated in world trade has been a major, often controversial issue. Special and differential (S&D) treatment, which addresses the requirements and special needs of the weaker member states, is of fundamental importance for the developing countries.

Over the years, first in the framework of the General Agreement on Tariffs and Trade (GATT), and currently in the World Trade Organization (WTO) as the liberalization commitments of developing countries have deepened and the multilateral trade agenda broadened, the issue of S&D treatment has grown in importance. For example, agreements have been concluded in a number of new areas critical for national development, including trade in services, the protection of intellectual property rights and agricultural trade, as a result of which developing countries have assumed important new commitments, as they have in other areas, such as market access, technical barriers to trade, and sanitary and phytosanitary measures.

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T.R.A.D.E. Working Papers 1

INTRODUCTION

The Decision on the Application and Review of the Understanding on Rules and Procedures Governing the Settlement of Disputes, adopted by the Trade Negotiations Committee on 15 December 1993, in part reads as follows: “Ministers ... invite the Ministerial Conference to complete a full review of dispute settlement rules and procedures under the World Trade Organization within four years after the entry into force of the Agreement Establishing the World Trade Organization, and to take a decision on the occasion of its first meeting after the completion of the review, whether to continue, modify or terminate such dispute settlement rules and procedures.”

Under this Decision, WTO Members were mandated to complete a review of the operation of the current Dispute Settlement Understanding (DSU) by the end of 19981, allowing the Third WTO Ministerial Conference, to be held in the United States in late 1999, to take a decision on whether to continue, modify or terminate the DSU. A number of informal consultations have been held at the WTO Dispute Settlement Body (DSB) for this purpose, but no consensus has emerged so far regarding whether or, if at all, to what extent the current DSU should be modified.

This paper is an attempt to analyse problems that have been encountered by developing countries in relation to the operation of the DSU. It is important to note however, that the analysis of substantive issues, raised and decided upon in the context of disputes that have been brought to the WTO dispute settlement mechanism so far, is beyond the scope of this paper. While the focus of the present paper is on issues of process related to the operation of the DSU, this should not diminish the importance of the issues of substance addressed in the panel/Appellate Body decisions which may be the subject of a follow-up paper in the future.

Before engaging in the analysis of the current DSU, it is useful to review the experience of developing countries under GATT 1947 in respect of the dispute settlement system, in order to highlight the difference and similarities between the past and the present situations.

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