NEW YORK — If the World Trade Organization is going to work, then developing nations need to believe that they will benefit from opening their markets to imported goods, as well as gaining from better market access for their exports to wealthy nations.
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That was the message of U.S. Trade Representative Robert Zoellick and European Union Commissioner for Trade Pascal Lamy at a Wednesday discussion at the Council on Foreign Relations, called “Globalization, Trade and Development: The U.S. and the EU, in for the Long Run?”
“The major challenge I see here…is to increase the confidence of developing countries that a multilateral, open, rules-based system can work for them,” said Lamy. However, he said, it is a current “political reality” that many developing nations believe that trade liberalization offers greater benefits to wealthy countries.
Lamy said one of the key goals of the WTO is to encourage developing nations to trade among themselves, as well as export their goods to wealthier neighbors.
Zoellick said the benefit of developing countries opening their markets is clear: “It’s cheaper goods, it’s cheaper clothes, it’s cheaper components. It adds competition.”
Unless the leaders of developing countries believe this, however, it will be difficult for the U.S. and EU alone to drive trade liberalization, Zoellick said: “This is no longer a world where we can get it done.”
Lamy acknowledged that developing nations have not always been able to take advantage of trade liberalization. “Once they have market access, do they export?” he asked rhetorically. “Unfortunately, the answer is often ‘No.’”
Encouraging exports was one goal of the EU’s recent proposal for the 144 WTO members — soon to be 145 now that Macedonia has been given the nod to join — to drop tariffs on apparel, textiles and footwear to levels close to zero.
“Seventy percent of developing countries’ exports are of manufactured goods and we better start addressing these,” he said.