Laaltain

Multilateral Trading System and Global Governance

9 ستمبر، 2015

In what can be defined as a wake from the glob­al fis­cal cri­sis of 2008, inter-depen­dence between trade and gov­er­nance has evolved. Now, mul­ti­lat­er­al trad­ing needs can deter­mine the dynam­ics, objec­tives and mech­a­nisms of glob­al gov­er­nance more promi­nent­ly. It is good because it trig­gers the pub­lic domain to estab­lish stronger nation­al and region­al blocs and be more rep­re­sen­ta­tive of the public’s trad­ing aspi­ra­tions. The real­iza­tion that mul­ti­lat­er­al trade can reform the archi­tec­ture of glob­al gov­er­nance is essen­tial because it makes it legit­i­mate for us to ask how the increas­ing need for mul­ti­lat­er­al trad­ing is urg­ing glob­al eco­nom­ic and polit­i­cal insti­tu­tions to ensure that a demon­stra­ble, sus­tain­able and trans­par­ent progress is deliv­ered. It also makes it legit­i­mate for us to ask how far mul­ti­lat­er­al trade can take the the­o­ret­i­cal frame­work of the glob­al sys­tem to the grass­roots, specif­i­cal­ly in small and vul­ner­a­ble economies.

Are prac­tices of com­pe­ti­tion and fair trade pro­vid­ing suf­fi­cient ‘fair play’ to devel­op­ing and least-devel­oped economies and real­ly estab­lish­ing them as equal stake­hold­ers in world econ­o­my?

In year 2008, before the eco­nom­ic cri­sis became cer­tain and a con­clu­sion of the Doha Round was being sought, an obvi­ous per­cep­tion was that a suc­cess­ful and time­ly con­clu­sion to the Doha Devel­op­ment Agen­da will re-affirm that a strong glob­al gov­er­nance which deter­mines the flow of mul­ti­lat­er­al trade is intact. In the same year, Dr. Debapriya Bhat­tacharya – macro­econ­o­mist and pub­lic pol­i­cy ana­lyst – opined that ‘we are putting too much val­ue on Doha Round when we are wit­ness­ing fail­ure of glob­al eco­nom­ic gov­er­nance’.

His analy­sis and the harsh fis­cal imbal­ance the world sub­se­quent­ly under­went imply that in the post-cri­sis sce­nario, we must attempt to answer two tough ques­tions prag­mat­i­cal­ly.

1. How far have we embraced the tran­si­tion into a rel­a­tive­ly more par­tic­i­pa­to­ry, decen­tral­ized sys­tem of region­al eco­nom­ic gov­er­nance?
2. Are prac­tices of com­pe­ti­tion and fair trade pro­vid­ing suf­fi­cient ‘fair play’ to devel­op­ing and least-devel­oped economies and real­ly estab­lish­ing them as equal stake­hold­ers in world econ­o­my?
Due to their small­er admin­is­tra­tive size as opposed to glob­al insti­tu­tions, region­al bod­ies can have greater people’s par­tic­i­pa­tion and engage pub­lic domains more rapid­ly.

It is impor­tant that the term ‘fair’, when used in con­nec­tion to Trade Quo­tas, Tar­iffs, Stan­dard Safe­guards and Import Sen­si­tive Lists, accom­pa­nies a reminder of the con­di­tions in which devel­op­ing economies are striv­ing for growth.

A decen­tral­ized mod­el of eco­nom­ic gov­er­nance there­fore, being inter­est­ing­ly more par­tic­i­pa­to­ry and more rep­re­sen­ta­tive of pub­lic aspi­ra­tions, also fur­thers the syn­chro­niza­tion which is manda­to­ry for glob­al gov­er­nance, by build­ing coher­ence in the imple­men­ta­tion of inter­na­tion­al eco­nom­ic poli­cies at region­al and local lev­els.

To answer the sec­ond ques­tion, when we talk about sub-stan­dard man­u­fac­tured goods being export­ed from devel­op­ing or least devel­oped coun­tries, we tend to assume that Low­er Tar­iffs, Relax­ation on Trade Bar­ri­ers like Stan­dards of Prod­ucts and Increased Trade Quo­tas to under-devel­oped nations pro­vide them with fair oppor­tu­ni­ties of growth. Here, insti­tu­tions of glob­al gov­er­nance must take into account the acute lack of infra­struc­ture that exists in under-devel­oped economies. Coun­tries suf­fer­ing from a decline in pro­duc­tion of goods due to lack of technology/infrastructure, cri­sis of ener­gy, absence of access to tech­ni­cal skills and capac­i­ty-build­ing and a declin­ing for­eign invest­ment due to fail­ure in the main­te­nance of law and order, are at an obvi­ous dis­ad­van­tage in per­spec­tive of rel­a­tive mul­ti­lat­er­al trade.

Com­pet­i­tive prac­tices are not inher­ent in devel­op­ing economies and a lack of skill and tech­nol­o­gy does not allow cot­tage-indus­tries and small-scale entre­pre­neurs aim­ing for pro­duc­tions of scale, to grow. It is there­fore imper­a­tive that glob­al insti­tu­tions sup­port vul­ner­a­ble economies to facil­i­tate the invit­ing of for­eign invest­ment. It is also imper­a­tive that finan­cial sup­port to gov­ern­ments be direct­ed towards val­ue-addi­tion of prod­ucts to ensure that fin­ished-prod­ucts are being export­ed and that assis­tance in val­ue-addi­tion process­es of pack­ag­ing, han­dling and stor­ing becomes a source of last­ing skill-trans­fer for local labor.

Our inves­ti­ga­tion into the sys­tems of glob­al eco­nom­ic gov­er­nance must answer whether or not glob­al gov­er­nance has the capac­i­ty to pro­vide a mod­el that deliv­ers equi­table oppor­tu­ni­ties and facil­i­tates devel­op­ing and under­de­vel­oped economies, as much as it facil­i­tates the devel­oped ones. It is impor­tant that the term ‘fair’, when used in con­nec­tion to Trade Quo­tas, Tar­iffs, Stan­dard Safe­guards and Import Sen­si­tive Lists, accom­pa­nies a reminder of the con­di­tions in which devel­op­ing economies are striv­ing for growth.

Pro­gres­sive mul­ti­lat­er­al trad­ing sys­tem demands of glob­al gov­er­nance insti­tu­tions to pro­vide for a greater open­ness in mar­kets. But this is what mul­ti­lat­er­al­ism demands in the short-run because in the longer-run the sys­tem is going to need reg­u­la­tions which are empa­thet­ic, not framed and imple­ment­ed at the cost of the devel­op­ing economies.

Devel­op­ing economies tend to suf­fer from a weak­er eco­nom­ic stand­ing which in turn leads to their weak lob­by­ing capac­i­ty at glob­al forums. The reg­u­la­to­ry frame­work we need there­fore, is the frame­work which bridges this inher­ent gap.

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