What’s at Stake for the LDCs, Now that the Uruguay Round Talkshave been Suspended? (The Distinguishedl Lecture)

Until negotiations collapsed in early December, the UruguayRound gave promise of being the most significant multilateral tradenegotiation since 1947, when the General Agreement on Tariffs and Trade(GA TI) was implemented and tariffs levels of the industrial countrieswere sharply cut. There are at least three reasons for this conclusion.First, by agreeing at the outset to bring both agriculture and textilesunder GATT discipline, the participants created the opportunity for bothrich and poor agricultural exporting nations and relatively low-wage,newly industrializing LDCs to benefit significantly from GATT-sponsoredtrade negotiations. Prior to the Uruguay Round, the benefits to thesecountries of such negotiations had been limited, since these two sectorswere excluded from any significant liberalization. Second, by agreeingto formulate new rules relating to trade in services, trade-relatedaspects of· intellectual property rights, and trade-related investmentissues, members took an important step in modernizing the GATT. Aseconomic globalization has accelerated, there is a growing realizationthat arms-length merchandise transactions, the traditional concern ofthe GATT, are only one aspect of the real-side economic relations ofcurrent concern to national policy-makers and the economic intereststhey represent Now international commercial activities also involvemerchandise trade among multinational firms and their foreignaffiliates, international trade in services among independent agents aswell as among affiliated enterprises, foreign direct investmentactivities, production nf goods and services in foreign affiliates forsale either abroad or at home, international flows of technology, andtemporary movements of labour across borders. Although the so-called newissues in the Uruguay Round do not cover all of these matters, they go aconsiderable way in making the GATT more relevant for dealing with theproblems of increasing internationalization.