Joseph E Stiglitz calls for a true Development Round of trade negotiations in new Commonwealth report

In a new report commissioned by the Commonwealth Secretariat, Nobel Laureate Joseph E. Stiglitz has launched a broad critique of the post-Doha Development Round of trade talks, which he argues does not truly represent the interests of developing countries. The report will be launched at the Commonwealth Secretariat on Monday, 21 June. This comes as the United Nations Conference for Trade and Development meets in Brazil to discuss how to enable trade to contribute more to the development of the world's poorest nations. Developed countries have already been widely criticised for their agricultural subsidies and other trade restrictions which discriminate against key agricultural and manufactured exports from developing countries. Stiglitz argues that the problems are much broader and that fundamental reform of the agenda and negotiating process will be required if the Doha Round is to deliver on its promise to developing countries.

In 'An Agenda for the Development Round of Trade Negotiations in the Aftermath of Cancun' Stiglitz says that developing countries should receive special and differential treatment because they have been disadvantaged by unfair trade negotiations in the past, and because of the differences in their current circumstances. Rather than seeking reciprocal commitments from developing countries, Stiglitz urges developed countries to make unilateral concessions in more areas of the agenda.

The report by the Initiative for Policy Dialogue, written by Stiglitz with Andrew Charlton of Oxford University, details which reforms would deliver the largest gains to developing countries and, consequently, should be given highest priority in the Development Round. For instance:

• The agenda should contain proposals to facilitate the movement of unskilled labour (enabling workers in poor countries to provide services to markets in rich countries) and should prioritise free trade in commodities and services that require unskilled labour.
• There is an urgent need to address non-tariff barriers (NTB), which have taken on increasing importance as tariffs have come down. The legal framework for responding to dumping and other alleged unfair trade practices needs reform to ensure that developing countries are not disadvantaged. The double standard for domestic and foreign firms needs to be eliminated. 
• The intellectual property provisions (TRIPS) need to be revised to begin to close the 'knowledge gap' between rich and poor countries. Concerns about incentives for research should be balanced with the human costs and economic inefficiencies arising from granting corporations monopoly power over technologies and ideas. Access to life saving drugs must be guaranteed, and traditional knowledge should not be patentable by foreign corporations.
• Trade should not trump development. Developing countries should not be forced to accept obligations which overly restrict their scope for active development policies. They should have wide latitude in how they can promote new industries, being allowed, for instance, to impose requirements on banks to encourage lending to small and medium sized enterprises.

Note to editors:

The Initiative for Policy Dialogue is a network of international development economists and is based at Columbia University in New York City. 

Joseph E. Stiglitz was awarded the Nobel Prize in economics in 2001 and is a University Professor at Columbia University. He was Chief Economist and Senior Vice-President of the World Bank from 1997-2000 and Chair of President Bill Clinton's Council of Economic Advisors from 1995-97.

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