With the World Trade Organization's Doha round lumbering into its final months of talks, Nobel Prize laureate Joseph Stiglitz offers a new view on how fair trade should be implemented to help all nations, be they wealthy or poor.
Stiglitz, a former presidential adviser and Chief Economist of the World Bank, brings impressive credentials and a strong critique to the task. Coauthor Charlton is a research officer at the London School of Economics. They argue that the WTO and its most affluent members have left the world's poorest nations behind in past trade negotiations. Even the Doha Development Agenda, proposed in November 2001, which specifically addressed the concerns of developing nations, has failed to live up to its promise, they say.
The Doha Declaration “was full of noble ambition,” Stiglitz writes in the foreword. It pledged to rectify past imbalances by reducing tariffs on goods that developing countries could export competitively, setting targets to reduce world poverty, and in general opening up trade opportunities to all WTO members, among other activities. Those goals have not been achieved, Fair Trade for All concludes.
The first few chapters review the various successes and failures of WTO rounds and make the argument that fair trade is good for everyone if handled carefully. Trade policies must be developed that “integrate developing countries into the world trading system and help them to benefit from their participation.” But even if such a system is crafted, developing countries will need special treatment to take advantage, Stiglitz and Charlton write.
Heading their list of suggested reforms is the “Doha Market Access Proposal,” which would bind WTO members to provide free market access in all goods to all developing countries poorer and smaller than themselves. Thus, even though Egypt, for example, would have to grant free market access to Uganda, it would in turn win free market access to the United States.
Another proposal would require that developed countries commit to eliminating agricultural subsidies. However, the authors write, a true development round will go beyond market access issues and embrace international agreements that expand and protect the interest of developing countries.
Interestingly, the argument that world trade should be leveraged to help developing countries seems an odd argument coming from Stiglitz. His earlier work, Globalization and its Discontents, was a bestselling critique of globalization. But even in that book he argued globalization could be a force for good if properly handled by the WTO, International Monetary Fund, and the World Bank. Fair Trade for All offers a potential roadmap.
- Sean Silverthorne