Facultad Latinoamericana De Ciencias Sociales (FLACSO) Argentina
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THE LATIN AMERICAN TRADE AGENDA: STAKES AND PRIORITIES IDRC Grant 101088-001 Facultad Latinoamericana de Ciencias Sociales (FLACSO) Argentina Project Staff Director: Diana Tussie Deputy Director: Miguel F. Lengyel Communication Director: Tracy Tuplin Assistant Researcher: Cintia Quiliconi/Valentina Delich Administrative Assistant: Celsa Dominguez Final Technical Report August 2004 Table of contents SYNTHESIS .........................................................................................................2 RESEARCH PROBLEM .....................................................................................……3 RESEARCH FINDINGS .....................................................................................…..4 FULFILLMENT OF OBJECTIVES......................................................................……. 5 PROJECT DESIGN AND IMPLEMENTATION .................................................………..7 - Organization and Management of the Research Network .………………….……… 7 - Preparation of Research Studies................................................................ 11 PROJECT OUTPUTS AND DISSEMINATION………………………………………………………. 14 - Dissemination........................………………………………………………………………. 14 - Outputs................................................................................................... 17 CAPACITY BUILDING.........................................................…………………………….. 21 PROJECT MANAGEMENT………………………………………………………………………………… 22 IMPACT……………………………………………………………………………………………………….. 23 TRANSITION PERIOD……………………………………………………………………………………. 25 OVERALL ASSESSMENT……………………………………………………………………………..…. 27 ANNEX……………………….................................................................................... 28 1 SYNTHESIS Building on the lessons of the IDRC-supported project Leading Issues in International Trade Relations (otherwise the “Leading Issues...” project), this project was designed with two principal goals in mind: • To conduct in depth policy-oriented research on key issues of the Latin American trade agenda post- Uruguay Round (UR); and • To consolidate the profile and standing of the Latin American Trade Network (LATN) –created during the “Leading Issues...” project- as a region-wide, specialized cadre of trade analysts and enhance its capacity to support the process of trade policy making throughout the region. The project’s rationale was to further the process of capacity building on trade matters in the region. It proposed to do so by addressing through research the need of negotiators and policy makers for strategic inputs on priority issues resulting from Latin America’s full integration in the world trading system. In particular, those issues were related to the implementation of the UR commitments, the resumption of negotiations on the built-in-agenda, the increasing salience of the “social dimension” of trade, the sudden appearance of governance challenges after Seattle and the momentum gained by the initiative to constitute a free trade area in the hemisphere. The project’s methodological approach was essentially problem-driven and comprised two main threads. On one hand, research sought a balance between holistic analysis and detailed inquiry by paying attention to both overarching variables and the multiple procedural, technical and policy particulars that shape outcomes. In this last sense, the project sought to deepen LATN´s research focus by analyzing critical issues of the trade agenda (trade relief, agriculture and trade in services) with a particular concern for their technical aspects. On the other hand, research combined both backward- and forward-looking perspectives by paying attention to the policy and institutional consequences of past commitments as well as to the future negotiating options and their implications for the region. Research along these lines brought about several findings concerning the integration of Latin American countries in the world trading system. The most important of them were: • Latin American countries’ underestimation of the complexities and potential high costs involved in the full implementation of URAs in many regulatory policy areas; • The limited capabilities of most countries to develop proactive negotiating positions vis-a- vis the expanded trade agenda; • The difficulties to meet the WTO development mandate established at Doha; and • The unexpectedly large differences among negotiating proposals at the multilateral and hemispheric levels, once their technical dimensions were duly considered. Through the production of timely and systematic analyses on still unattended key issues of the Latin American trade agenda and the consolidation of a sustained flow of research inputs to decision makers, the project expected to reduce the region’s knowledge constraints to maximize the benefits of integration into an increasingly complex trading system. Through the strengthening of LATN, the project sought in turn to continue developing indigenous mechanisms for knowledge generation, embedded into local contexts. As shown both by the increasing use of LATN’s products for decision-making on trade policy and the success of the network in carving a niche for itself as a regional mechanism for policy-relevant knowledge production, the expected impact of the project was largely met. The project was also quite successful in finding additional sources of support for the network’s research work. While most of this additional funding was geared to cover indirect costs 2 (research consultant, meeting expenses), it amounted to about 50% of the total funds IDRC’s disbursed for the entire life of the project. RESEARCH PROBLEM The passage from GATT to WTO as a result of the Uruguay Round (UR) was a turning point in the international trade scenario for Latin American countries. For the first time they became fully and formally integrated into the world trading system, clearly showing their willingness to play by the new rules. Their engagement was not free from costs, as they had to accept a new conceptualization of special and differential treatment (S&D) which undermined their former rights and status. In addition, they had to make commitments in areas of particular interest for developed countries in order to get their own stakes included into the negotiation agenda. In this context, the “Leading Issues...” project aimed at producing a broad base analysis of Latin America’s dilemmas after the UR, by mapping out the results of the round and its major policy implications, particularly in terms of the policy space left. In keeping with this research focus, the “Leading Issues...” project was able to show that Latin American countries got into negotiations without a careful assessment of the implications of commitments, of the trade-offs of making commitments at different levels and of the intricacies of implementing the new disciplines. It also highlighted the limited technical capacity of those countries to craft proposals that further their interests, particularly in several “trade-related” policy areas dealing with non- border issues. Finally, the project results convincingly supported the claim that net gains from the UR were extremely meager for the region, whether the yardstick for assessment was market access payoffs or the suitability of the regulatory/institutional reforms unleashed by the URAs. In sum, by producing research outputs disentangling the general policy implications of the UR agreements, the “Leading Issues... “ project filled up a research need in the region. Those outputs constituted an encompassing picture from which to further analyze multilateral trade commitments. Building upon those insights, but also paying due attention to a trade environment that was posing new areas of concern and, therefore, turning the region’s trade agenda more complex and demanding, the main research problem this project addressed was the so-called “new challenges of inclusion”. This meant that main lines of research were oriented to deal with the technicalities of key issues on which negotiations kept moving at the multilateral level (such as those comprising the built-in agenda) and were being set in motion at the hemispheric level (market access, agriculture and services); to assess the consequences of implementing and administering past commitments (particularly in institution-intensive regulatory areas such as TRIPs, custom valuation, SPS and telecommunications); to explore how to gain greater control and be more proactive over the expansion of the agenda (tackling issues such as labor standards); and to explore the scope and implications of governance problems critical for developing countries, in particular S&D and rule enforcement. The project thus kept the problem-driven approach of its predecessor, while fine-tuning its research focus to address more effectively the implications of the technical intricacies of ongoing negotiations. Through this move it sought to substantially contribute to underscore and assess the costs and benefits of existing or eventual international trade commitments Latin American countries would have to deal with. It is important to note, however, that towards the end of the project, a greater concern with the implications of international trade commitments for the development needs and prospects of Latin American countries gradually emerged both within the project’s Direction and among some of the researchers involved. This increasing salience of the trade-development link was related to various reasons, the most important being the increasing