不平衡的乌拉圭回合结果: 未来WTO谈判的新领域

\AeS ;73X POLICY RESEARCH WORKING PAPER 2732 The Unbalanced Uruguay In mercantilist economics the North was a big winner over Round Outcome the South at the Uruguay Round-in real economics an The New Areas in Future even bigger winner WTO Negotiations J. Michael Finger Julio J. Nogues The World Bank Development Research Group Trade December 2001 H  POLICY RESEARCH WORKING PAPER 2732 Summary findings The Uruguay Round involved a grand North-South the South, the new domestic regulations adopted by bargain: The North reduced import barriers, particularly countries of the South could prove costly to those in textiles and agriculture. The South adopted new countries. To begin with, the regulations will be domestic regulations in such areas as services and expensive to implement. And while the cost side of their intellectual property-changes that would lead to impact is secured by a legal obligation (in the case of increased purchases from the North. In mercantilist intellectual property rights, for example, the cost is economics, apples for apples- imports for imports. In higher prices for patented goods), the benefits side is not real economics, apples for oranges. so secured. Finger and Nogues argue that while the North's reduction of import barriers benefits both the North and This paper-a product of Trade, Development Research Group-is part of a larger effort in the group to help developing countries to use the WTO as an effective instrument for development and was supported in part by the World Bank/ Netherlands Partnership. Copies of the paper are available free from the World Bank, 1818 H Street NW, Washington, DC 20433. Please contact Robert Simms, mail stop MC3-303, telephone 202-473-7156, fax 202-522-1159, email address rsimms@worldbank.org. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. The authors may be contacted at mfinger@aei.org or jnogues@infovia.com. December 2001. (19 pages) The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the excnange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and sbould be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the autbors. They do not necessarily represent the view of the World Bank, its Executive Directors, or the countries they represent. Produced by the Policy Research Dissernination Center  The Unbalanced Uruguay Round Outcome: The New Areas In Future WTO Negotiations by J. Michael Finger and Julio J. Nogue's   Table of Contents ABSTRACT ................................I SUMMARY .................................II 1. INTRODUCTION .................................1 2. THE URUGUAY ROUND BARGAIN .................................2 A. MARKET ACCESS- MERCHANDISE .2 B. SMOKE AND MIRRORS .3 C. TEXTILES AND CLOTHING .3 D. AGRICULTURE ............................................................................................4......................... 4 E. MERCANTILIST ECONOMICS VS. REAL ECONOMICS ........................5 F. CONCESSIONS IN THE NEW AREAS ARE DIFFERENT .........................5 (i.) Concessions cost money to implement .........................5 (ii.) Concessions can impose real costs ...................... ..5 (iii.) Agriculture Exporters vs. Textiles/Clothing Exporters ....................................................6 G. THE URUGUAY ROUND BARGAIN-REPRISE .................................................................6 3. ARGENTINA: A CASE STUDY ..................................................................6 H. SERVICES .................................................................7 (i.) Service sector performance ..................................................................7 (ii.) Foreign direct investment .................................................................8 (iii.) Locked in ................................................................. 10 1. TRIPS: PHARMACEUTICALS.. 10 (i.) The cost to Argentina ........................................................................ 11 (ii.) Patents and Foreign Direct Investment ................................................................. 11 4. WHY WAS AN UNBALANCED OUTCOME OFFERED AND ACCEPTED? .............. 11 j. THE MOMENTUM OF MERCANTILIST NEGOTIATIONS. 12 (i.) Tradition of casual analysis .12 (ii.) Information was not available .12 K. CREATING THE WTO CHANGED DEVELOPING COUNTRY OPTIONS ......................................... 13 L. CHANGING TRADE POLITICS IN THE US .............................................................. 13 M. INDUSTRY AUTHORITY OVER US POLICY - PHARMACEUTICALS: AN EXAMPLE .................... 14 5. CONCLUSIONS ............................................................. 15 N. MERCANTILISM, GATT AND WTO .15 0. UNBALANCED URUGUAY ROUND OUTCOME .15 P. GATS AND TRIPS .16 Q. WILL IT HAPPEN AGAIN? .16 R. REAL ECONOMICS IN THE WTO? .1 7 6. REFERENCES .18  LIST OF TABLES TABLE 1 URUGUAY ROUND TARIFF CONCESSIONS ...................................................................... 3 TABLE 2 RATES OF INCREASE OF SERVICES EXPORTS AND IMPORTS, 1992/3 - 1998/9 ....................8 TABLE 3 STOCKS AND PROFITS OF FOREIGN DIRECT INVESTMENT IN SECTORS WHERE COMMERCIAL PRESENCE WAS BOUND AT THE WTO, ARGENTINA 1992, 1995 AND 1998 (U.S. $ MILLION) ...................................................................... 9 TABLE 4 ADJUSTMENT TO PREVIOUS ESTIMATES OF TRADE rN TRAVEL SERVICES, ARGENTINA 1992-1998 (%) ..................................................................... 12  The Unbalanced Uruguay Round Outcome: The New Areas In Future WTO Negotiations by J. Michael Finger and Julio J. Nogues' 1. INTRODUCTION The Uruguay Round produced an outcome unbalanced against the developing countries. We set out in this paper to document that imbalance and to analyze how it came about. The intent of this inquiry is to determine (a) how such a result might be avoided in a new WTO negotiating round, and (b) how the WTO might better incorporate a "development dimension" into what it does. We find three reasons behind this outcome: 1. The developing countries' lack of experience in WTO negotiations, particularly their (and everyone else's) lack of knowledge of how the developing economies would be affected by what the industrial countries wanted in the WTO new areas. 2. An intensified mercantilist (our export interests first) attitude of the GATT/WTO's major power, the US. 3. Creating the WTO put small countries over a barrel. It made ineffective the GATT tradition of decision by consensus. "No" by one country would not preserve the status quo; it meant that the country was out, stripped of the protection that the old agreement provided. Argentina's experience provides a country-specific example of the unbalanced outcome. It also allows us to compare the usefulness of the General Agreement on Trade in Services (GATS) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) as ways to support development of the relevant sectors of an economy. We conclude that GATS is the better model. Finally, we conclude that the mercantilist economics that was satisfactory for the GATT is not adequate for the more complex policy instruments that the WTO now regulates. A negotiation, particularly one driven by export sales, is not a forum that accommodates the more complex cost-benefit analysis that is necessary in the new areas. Decisions in the new areas should be structured as development/investment decisions - development issues to which a trade dimension can be fitted, not the other way around. The WTO can be complimentary, but the economics of the new areas is more likely to be identified by the unilateralism of the developing countries' liberalization of the 1980s and early 1990s. The structure of the paper is straightforward. We examine the North-South bargain at the Uruguay Round, taking a particular look at the outcome for Argentina in services and in intellectual property rights. We then examine how this outcome came about and proceed to draw our conclusions. ' The authors acknowledge with gratitude comments from L. Alan Winters and from two anonymous referees that prompted us to clarify and to extend our argument in a number of places. Thie authors alone are responsible for opinions expressed or errors that may remain. 1  2. THE URUGUAY ROUND BARGAIN The overall North-South bargain struck at the Uruguay Round was that the developing countries would take on significant commitments in "new areas" such as intellectual property and services, where industrial country enterprises saw opportunities for expanding international sales. The industrial countries, in exchange, would open up in areas of particular export interest to developing countries: agriculture and textiles/clothing. a. MarketAccess- Merchandise When the score is totaled, a developing countries' "surplus" on market access is not apparent. As to NTBs generally, the tariffication of agricultural protection meant that all countries that used NTBs in that sector had to remove them. Apart from agriculture, the best available information shows as significant a reduction of NTBs by developing countries as by industrial countries. (Finger and Schuknecht, 1999). On tariffs, the developing countries' reductions covered as large a share of their imports as did those of the developed countries. (Table 1) Their tariff cuts - when measured by how they will affect importers' expenditure- were deeper than those of the developed countries. 2 If however we take into account the tariff equivalent of the MFA quotas that the industrial countries have committed themselves to remove, the depth of industrial country concessions on merchandise increases to 1.6, still less than the depth of developing country concessions. 2 As a part of what the importer pays, a tariff reduction relates to the tariff charge plus the price received by the seller, to Ps(l+T) rather than simply to T. Finger, lngco and Reincke (1996) provide a more detailed explanation. 2  TABLE 1 URUGUAY ROUND TARIFF CONCESSIONS Developed Developing Economies Economies % of Depth of cut % of Depth of cut imports dT/(l +T) imports dT/(l +T) Concessions Given. All Merchandise 30 1.0 29 2.3 Industrial Goods 32 1.0 33 2.7 Note: Depth of cut is a weighted average across all products, including those on which no reduction was made. Source: Finger and Schuknecht (1999), Table T-1, based on Finger, Ingco and Reincke (1996) b. Smoke and mirrors Reductions of "x percent" on "y [share] of imports" are familiar but inexact language to describe trade negotiations. Both the Uruguay Round textiles/clothing and the agriculture negotiations used such description in a manner that distracts attention from what was in fact agreed. c. Te-xtiles and clothing The central provision of the Uruguay Round Agreement on Textiles and Clothing requires that all textiles and clothing products be "integrated into GATT" in four stages (first day of calendar years 1995, 1998, 2002 and 2005); encompassing 16 percent, 17 percent, 18 percent and 49 percent (by 1990 volume) of imports of all specified textiles and clothing products. This does not however require that MFA restrictions be eliminated by that schedule. To "integrate into GATT" is essentially to certify that a product is clean of restrictions that would be illegal under GATT. The base to which this integration is to be applied includes virtually the entire schedule of textiles and clothing imports.3 This careful wording has allowed the industrial countries to put off much of the market liberalization until the very end of the transition period, until 2005. Through the first two stages, which include notionally 33 percent of textiles and clothing imports, the United States has eliminated only one percent of its MFA restrictions, the EU only seven percent, 3 According to the Agreement on Textiles and Clothing, the percentages apply to "the total volume of the Member's 1990 imports of the products in the Annex." (ATC, Article 2, paragraph 6.) "The Annex" runs to more than 30 pages of six-digit HS products and includes all textile and clothing products that were subject to MFA or MFA-type restraints in at least one importing country (WTO Secretariat 1999, p. 66). 3  Canada only 14 percent. "Liberalization" to date under the ATC has been mostly on products that were not under restraint to begin with.4 d. Agriculture The Agreement on Agriculture, even more than the textiles and clothing agreement, has proven to be much less than it appeared to be. Many industrial countries replaced existing agricultural quotas with tariff rates that minimally reduced and in some instances increased the degree of protection (Ingco, 1995; Hathaway and Ingco, 1996). Significant reduction of trade barriers, domestic support measures and export subsidies is still to be negotiated. To understand how this outcome came about, consider that the key parts of the negotiation were the following: * all NTMs would be eliminated and replaced by tariffs (i.e., tariffication), * tariffs would be reduced: industrial countries by an average of 36 percent over six years, developing countries by 24 percent over 10 years, and * there would be parallel reductions of export subsidies and of domestic supports.5 The first of these is written into the agreement as a legal obligation,6 the other two are not. The percentages by which tariffs, export subsidies and domestic supports would be reduced were set out in a document titled "Modalities for the establishment of specific binding commitments under the reform program," (GATT, 1993) The document also gave formulas for converting non-tariff restrictions to tariff equivalents. The document did not however have the status of specifying legal obligations. A country's legal obligation is the tariff rates it posted in its submitted schedule of commitments. Whether or not these rates would meet the strictures of the modalities document, e.g., the extent that such rates are 36 percent below the tariff equivalent of base year protection, was a matter of negotiating politics, not legal obligation. Holding countries to these guidelines depended on negotiators checking each other's arithmetic - did the numbers a country posted in its schedule follow reasonably from the guidelines' base years and formulas? Where "errors" were found, a different value in the schedule had to be negotiated. The outcome - the amount of liberalization implied by the rates in the schedules - suggests that a considerable amount of slippage did not raise alarm.7 4 The ATC allows transitional safeguard measures on any product in the Annex, except for products already integrated into the GATT. There was a flurry of such applications in 1995 and 1996, but these restrictions have been almost entirely removed, there have been few applications since. The number of antidumping cases initiated by the EU against imports of textiles and clothing has been higher since 1994 than it had been before. These actions, on the whole, have not been on products that have been integrated into GATT (Finger and Schuknecht, 1999). 5 Percentages for reductions in both were stated in the "Modalities" document, (GATT, 1993). 6 According to Article 4.2 of the Agreement on Agriculture: " Members shall not maintain, resort to, or revert to any measures of the kind which have been required to be converted into ordinary customs duties . . ." A footnote then states that "These measures include quantitative import restrictions, variable import levies,. 7 The modalities document gave developing countries the latitude to adopt ceiling bindings rather than to follow the tariff equivalence formulas. The modalities document itself not being binding, the industrial countries were 4  A result of the complexities of the agreement is that - without violating the Uruguay Round agreement - industrial country support to agriculture increased from 31 percent of gross farm receipts in 1997 to 40 percent in 1999 (OECD, 2000). In many industrial countries, aggregate assistance to agriculture is today higher than it was at the before the Uruguay Round. e. Mercantilist Economics vs. Real Economics Mercantilist economics is good enough for tariff negotiations. First of all, reducing a tariff or removing a quantitative restriction costs nothing to implement. A lot of money will move in different directions as a result, but putting such policy changes in place takes no more than an Executive or a Legislature signing an order. Second, while the mercantilist economics that underlies negotiations treats a tariff reduction as a "concession", in real economics such reforms have positive effects on both the "giver" and the "receiver." There is thus no need for negotiators to do a cost-benefit analysis. Even "concessions" are blessings, negotiators cannot get it wrong. f. Concessions in the New Areas are Different It is a mistake however to apply the same casual "concessions received vs. concessions given" to the new areas, particularly dangerous to evaluate by this standard concessions on market access vs. concessions in the new areas. (i.) Concessions cost money to implement New Area obligations likewise will cost considerable money to implement. Finger and Schuler (2000), in a review of World Bank project experience, found that to get up to speed in three areas: customs valuation, TRIPS and sanitary/phytosanitary measures, would cost each country some 150 million dollars, more than a full year's development budget in many of the least developed countries. (ii.) Concessions can impose real costs Such implementation decisions are, in real economics, investment decisions. Particularly in developing countries, where capital is scarce, it makes sense to ask if the money would be well spent. Real economics provides no assurance that the concession giver will benefit. Finger and Schuler (2000) found that the standards imposed by the WTO agreements are basically those already in place in the industrial countries.8 These regulations reflect little awareness of development problems and little appreciation of the capacities of developing countries - particularly the least developed countries - to carry out the functions that the agreements address. Unlike "concessions given" on import restrictions, "concessions given" in the new areas could very likely bring economic costs - real costs, not just the political challenges that a mercantilist perception describes as "concessions given." For example, Hoekman (1997) not bound to use the formulae. This is another instance of substance being less than appearance. 8Hence no implementation costs to them. 5  points out that foreign takeovers are an important means of entering markets. When investment or competition policy - not import tariffs or quotas - is the instrument, increased market share could have an anti-competitive effect, not the gains from trade that reducing tariffs or quotas would bring. (iii.) Agriculture Exporters vs. Textiles/Clothing Exporters The industrial countries' obligation to remove their MFA quotas is a binding obligation - though one written so that it does not come due until 2005. In agriculture, there is no obligation past what is reflected in existing schedules. Textiles and clothing are better off than exporters of agricultural products. Concessions received by South Asian countries (including India, Pakistan, Bangladesh) cover 50 percent of their merchandise exports, for Latin American only 25 percent, Argentina 22 percent.9 g. The Uruguay Round Bargain - Reprise In the Uruguay Round North-South bargain the North's mercantilist sacrifice on tariffs and quotas is, in real economics, a gain for them - even larger because of recovering the substantial MFA quota rents. The South's concessions however involve real costs to the South - significant costs to implement the policy changes, negative impacts in many cases of the changes themselves (we illustrate below this point for Argentina). Counting in MFA elimination, North concessions on merchandise import restrictions still did not equal those by the developing countries. South concessions in the new areas not only brought real costs to the South, they were entirely unrequited. 3. ARGENTINA: A CASE STUDY At the time the Uruguay Round began, Argentina had maintained inward-oriented policies for several decades. Fiscal deficits and governmental ownership of powerful enterprises producing tradable goods and public services had led the economy down a negative growth path for most of the 1 980s. Policy turned almost 180 degrees in the late 1 980s and early 1 990s when a broad program of stabilization and structural reforms was implemented. Like other developing countries that had chosen not to participate actively in previous multilateral trade negotiations, Argentina lacked trade negotiators with experience in what was a technically complex set of issues. Another relevant institutional fact is that during the Uruguay Round the government in 1989 shifted responsibility for trade negotiations from the Ministry of Economy to the Ministry of Foreign Affairs. The program of reform the government was pursuing in the service sector included extensive privatization, opening to international competition and deregulation. Making the sector attractive for foreign investment was an important element. In this section we will contrast the service sector and the pharmaceuticals sector. In the former, the Uruguay Round provided a useful complement to an ongoing program of domestic reform. In the latter, there 9 Finger, Ingco and Reincke, (1996). 6  was no program of domestic reforms and the impact of reforms forced on the Argentine economy by trading partners will be negative. h. Services Previous to the government's decision to modernize the economy, the public service sector had been made up of government-owned, monopoly companies. As the quality of the services they provided deteriorated, these enterprises came under increasing public criticism. When a new government took power in mid 1989, the efficiency of these enterprises had reached such low levels that the proposal of privatizing them enjoyed widespread public support. Building on this support the government launched in 1989 a sweeping privatization program. Power generation and distribution, communications and telecommunications, gas production and distribution, wholesale and retail trade, banking and insurance, and numerous companies in tradable goods industries such as petroleum, chemicals, iron and steel, have been privatized.I' Even water companies, port facilities, railroads and roads have been transferred to private operators in long term concessions. Other than minority shares, the national government has now no stake in the numerous enterprises it controlled only a decade ago.I (i.) Service sector performance The privatized companies have provided both increased volume and improved quality of services. During the period 1993 to 1998, the contribution to GDP of the services sectors grew by 24 percent, goods producing industries by only 18 percent. In communications, where reform has been extensive and has attracted significant foreign direct investment, the increase in value added during the same period was 46 percent. Though the overall trade deficit increased over the 1 990s, the service sector account performed relatively well. Overall, the rates of growth of service exports and imports were about equal. (Table 3) Travel, the largest sub-sector, shows good export performance, though no subsector stands out as one in which Argentina has begun to develop a strong trade position. The sharpest movements of sub-sector trade balances are the increase of imports of finance and insurance, the increase of exports of personal, cultural services. Over the 1 990s exports grew more strongly than imports in half the subsectors (not counting "Other"). Where liberalization resulted in relative growth of imports as well as where export growth has been larger, the liberalization has entailed benefits to the country. For example, the opening of trade in insurance services has meant that consumers face more choice and better services among suppliers that are competing for the market. '