Mega-Regionals and Developing Countries
It turns out that when you have trade negotiations with only a select group of countries, other countries are left out. Often, those who are left out are developing countries. What's the impact of having "mega-regional" trade talks that exclude most developing countries? Some people are raising concerns. This is from Barrie McKenna of the Globe and Mail:
Forgotten in all the excitement is the awkward truth that 111 of the World Trade Organization’s 160 member countries are not part of these megaregionals. Most of the developing world will be entirely shut out. India, Brazil and all of Africa aren’t even at the table.
The architecture for a new world order in trade is being crafted and rolled out, and these countries will be denied a voice and a foot in the door. And that’s a shame, says Harsha Singh, a long-time senior WTO official, who was deputy director-general from 2005 to 2013.
“The world is getting more interdependent, with trade and investment becoming two sides of the same coin,” Mr. Singh said in an interview. “If we don’t have an inclusive system, whatever system we put in place is going to create tensions and potential conflicts.”
The developing world was the destination for 56 per cent of all foreign direct investment last year, pointed out Mr. Singh, now a fellow at both the Geneva-based International Centre for Trade and Sustainable Development and the Winnipeg-based International Institute for Sustainable Development. It’s also home to a burgeoning middle class, which will grow by a billion people this decade.
“A young generation will grow up with the knowledge that they are not part of the system,” Mr. Singh lamented. “There will be very strong resentment.”
And this is from Axel Berger and Clara Brandi of the German Development Institute:
... the economic and geopolitical significance of TTIP means that it will influence the geometry of the world trade system. TTIP and other ongoing negotiations on mega-regionals are undermining the multilateral trade system on an unprecedented level. Precisely at the time when the Bali trade deal has provided a glimmer of hope for the Doha Development Agenda, the United States and the EU are devoting significant political capital and administrative capacity to negotiating mega-regionals. Such a trend should be viewed critically from a development policy perspective. Despite the criticism levelled at it by many non-governmental organisations and developing countries over the last two decades, the WTO is and remains the institutional framework best placed to take account of the trade interests of poor and small countries. The multilateral system should remain the chief cornerstone of the global trade order, not least because multilateral trade agreements deliver economic benefits for all countries.