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Copyright © The Author 2007. Published by Oxford University Press.
Coherence and the WTO
* University of Sussex, CEPR, and the World Bank, e-mail: l.a.winters{at}sussex.ac.uk
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Coherence between the WTO and the Bretton Woods Institutions (a formal WTO objective) has achieved some minor goals but has been expensive in terms of direct costs and inefficiencies in policy-making and policy debate. The so-called Integrated Framework has achieved relatively little and aid for trade has yet to be fully established. There is little role for the WTO in development and aid policy other than its traditional job of facilitating trade growth, and so its role in aid-for-trade is unclear. Coherence, especially when interpreted as allowing developing countries to avoid trade liberalization in the name of development, has confused and weakened the Doha Round of WTO negotiations.
Key Words: WTO • coherence • aid for trade • integrated framework • world trading system
The findings, interpretations, and conclusions expressed in this paper are entirely those of the author. They do not necessarily represent the views of the World Bank, its Executive Directors, or the countries they represent. I am grateful to Claude Barfield, Mike Finger, Bernard Hoekman, and John Panzer for comments on an earlier draft, and to Audrey Kitson-Walters for logistical help.
1 See Picciotto (2004) on (iv).
2 Perhaps a more striking example is drugs policy. Everyone wishes to reduce hard-drug use, but some advocate bans and illegality to achieve this, while others prefer education and treatment for users. The result is an awkward mix whereby illegality is accompanied by measures to get users to reveal themselves and get help. Who is being incoherent?
3 This analysis is based on the excellent and amusing note prepared by Mike Finger for a WTO Seminar on Implementation (Finger, 2000).
4 World Bank lending for trade projects increased threefold from FY03 (July 2002–June 2003) to FY06, but only up to $1.6 billion in all, of which only one-quarter was in LDCs (Hoekman, 2007).
5 The IF was restricted to LDCs, so non-LDCs sought to locate AfT outside the IF, but even LDC governments argued for an alternative that would be less hide-bound and offer greater ownership.
6 Strictly, the IF Steering Committee had established the IF Task Force a few weeks earlier, but it was the Ministerial Meeting that put it at centre stage.
7 It thus did not link AfT to concessions in the Round.
8 They had made substantial ‘concessions’ in terms of the power of their tariffs ((1 + t), where t is the tariff rate) in the Uruguay Round (Finger and Winters, 1998), and much unilateral progress afterwards. Most of them resented the pressure that the DDA seemed to impose.
9 Given the propensity of developing countries to sign bilateral trade agreements, one might question whether they object to liberalization per se. I suspect they object to non-discriminatory liberalization because it lacks the politically convenient exclusive market access gains that bilaterals appear to offer. Moreover, except for those with the USA, few bilaterals seem to contain far-reaching and irreversible liberalization.
10 I suspect that before the coherence agreements, WTO statements on aid would have attracted withering responses from the BWO about mandates and expertise.
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