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Mankiw Coursebook e Building on Bali Building on Bali The successful conclusion of the Bali Ministerial Conference and its terrific reception in the international press and from government A Work Programme for the WTO leaders means that the WTO now has the opportunity to restore its A Work Programme for the WTO fortunes. The purpose of this VoxEU eBook is to identify a pragmatic, feasible, and comprehensive work programme for the WTO over the next four years. Edited by Simon J. Evenett and Alejandro Jara Twenty-seven contributions were commissioned from leading international trade experts and practitioners. These analyses cover both the strategic considerations that will likely shape near-term deliberations on the WTO’s priorities and the steps that should be taken by the WTO membership in the coming years on a wide range of important topics, ranging from long-standing staples like agriculture to new big-ticket items, such as electronic commerce. This volume provides decision-makers, analysts, and commentators with up-to-date assessments of the options before the membership of this critical international organisation. CEPR 77 Bastwick Street, London EC1V 3PZ Tel: +44 (0)20 7183 8801 A VoxEU.org eBook Email: [email protected] www.cepr.org Building on Bali A Work Programme for the WTO A VoxEU.org eBook Centre for Economic Policy Research (CEPR) Centre for Economic Policy Research 3rd Floor 77 Bastwick Street London, EC1V 3PZ UK Tel: +44 (0)20 7183 8801 Email: [email protected] Web: www.cepr.org © 2013 Centre for Economic Policy Research Building on Bali A Work Programme for the WTO A VoxEU.org eBook Edited by Simon J Evenett and Alejandro Jara a Centre for Economic Policy Research (CEPR) The Centre for Economic Policy Research is a network of over 800 Research Fellows and Affiliates, based primarily in European Universities. The Centre coordinates the re- search activities of its Fellows and Affiliates and communicates the results to the public and private sectors. CEPR is an entrepreneur, developing research initiatives with the producers, consumers and sponsors of research. Established in 1983, CEPR is a Euro- pean economics research organization with uniquely wide-ranging scope and activities. The Centre is pluralist and non-partisan, bringing economic research to bear on the analysis of medium- and long-run policy questions. CEPR research may include views on policy, but the Executive Committee of the Centre does not give prior review to its publications, and the Centre takes no institutional policy positions. The opinions ex- pressed in this report are those of the authors and not those of the Centre for Economic Policy Research. CEPR is a registered charity (No. 287287) and a company limited by guarantee and registered in England (No. 1727026). Chair of the Board Guillermo de la Dehesa President Richard Portes Chief Executive Officer Stephen Yeo Research Director Lucrezia Reichlin Policy Director Richard Baldwin Contents Foreword vii Executive Summary 1 Simon J Evenett and Alejandro Jara Section 1: Strategic priorities for the WTO after Bali How to Reassert the WTO’s Negotiating Authority 19 Stuart Harbinson The Post-Bali Agenda 27 Gary Horlick Multilateral Trade Cooperation post-Bali: Three Suggestions 31 Bernard Hoekman Simplify and Complete the DDA 37 Clemens Boonekamp APEC-like Duties for a post-Bali WTO 43 Richard Baldwin Trade, Global Value Chains and the World Trade Organization 53 Grant Aldonas Speaking Truth about Power: The Real Problem in the Multilateral Trading System 59 Craig VanGrasstek Section 2: Recommendations for Specific Commercial Matters The Rationale for Bringing Investment into the WTO 67 Anabel González Depth and Breadth in the WTO: Can We Square the Circle? 75 Patrick Low Revamping Aid for Trade for the post-Bali WTO Agenda 81 Jean-Jacques Hallaert Moving Towards a Refined Special and Differential Treatment 87 Sébastien Jean How can the Extent and Speed of Compliance of WTO Members with DSU Rulings be Improved? 93 James Flett Developing Countries and DSU Reform 99 Marc L. Busch and Petros C. Mavroidis A Post-Bali Agenda for Agriculture 105 Tim Josling The WTO Negotiations on Agriculture: What Next After Bali? 111 Melaku Geboye Desta The Quest for an Efficient Instrument in Services Negotiations 121 Patrick Messerlin Unleashing Recognition in International Trade 127 Joel P. Trachtman A Plurilateral Agreement on Local Content Requirements 133 Gary Hufbauer, Jeffrey Schott and Cathleen Cimino Exchange Rates: Alien to the WTO? 143 Hector Rogelio Torres Trade and Climate Change – Establishing Coherence 149 Laura Nielsen Can the WTO Adapt to a World Where Everyone Is Empowered to Engage in Global Trade? 155 Usman Ahmed, Andreas Lendle, Hanne Melin and Simon Schropp Cross-border Data Flows in the Post-Bali Agenda 163 Hosuk Lee-Makiyama Strengthening The Rules On State Enterprises 169 Przemyslaw Kowalski The Return of Industrial Policy: A Constructive Role for the WTO 177 Vinod K. Aggarwal and Simon J. Evenett Export Restrictions 183 Marcelo Olarreaga Technology Transfer for Sustainable Development 189 Keith E. Maskus Mode 4: The Temporary Movement of Workers to Provide Services 197 L Alan Winters Foreword With the avoidance of abject failure earlier this month of the WTO Ministerial Conference in Bali, the WTO has lived to fight another day but we can hardly count the outcome as a clear ‘win’. There is still much to be done to rehabilitate the WTO’s importance as international economic institution and restore ‘WTO centrality’ in global trade governance. The megaregional trading agreements under negotiation – especially the Trans-Pacific Partnership (TPP) and Trans-Atlantic Trade and Investment Partnership (TTIP) – would shift governance of global trade massively away from the WTO. Never before has the WTO faced such intense institutional competition. Competition, however, can bring out the best in those involved. This VoxEU.org eBook has been put together to collect ideas on how to give the WTO a fighting chance in this pending institutional competition. The contributions show how this organisation's work programme in the next two to four years can be structured so as to build on Bali's success. It is hard to disagree with the editors when they conclude: “… a liberalisation-heavy, negotiation-dominated WTO work programme is a non-starter in the near term. For too long this approach has generated more heat than light. The polar opposite – drift – risks the WTO being left out in the cold as companies and governments move on. The recommendations contained in this volume persuade us that a work programme can be cooked up that satisfies enough palates, bearing in mind that some tastes are changing as the 21st century progresses and others have more settled preferences ... the resulting fare won’t be the promised banquets of yesteryear – but it will provide a nutritious, more balanced diet from which the WTO can gain in strength over time.” vii Building on Bali: A Work Programme for the WTO The editors compare the recipes contained in this eBook to the porridge favoured by Goldilocks – neither too hot nor too cold. Whether they represent porridge or something grander, the recipes deserve the close scrutiny of the trade policy community. Simon Evenett, the co-director of the CEPR's International Trade and Regional Economics programme, teamed up with Alejandro Jara, a distinguished trade diplomat and former Deputy Director-General of the WTO, to lead this effort. Twenty-seven contributions were commissioned for this VoxEU eBook, titled Building on Bali. They cover not only the key strategic considerations that should inform the WTO membership's deliberations over its near-term work programme but also specific recommendations as what the WTO can do in seventeen policy areas. Simon, Alejandro, and I are very grateful to the contributors – all leading trade experts – for their succinct and incisive analyses. We are also grateful for the dedication and commitment of Anil Shamdasani, who helped produce this ebook in record time. Many thanks also to Antoine Cerisier, who proof-read sections of this volume. Team Vox also edited the column that was published along with this eBook. Stephen Yeo Chief Executive Officer, CEPR 16 December 2013 viii Executive Summary Simon J Evenett and Alejandro Jara The successful conclusion of the Bali Ministerial Conference and its terrific reception in the international press and from government leaders means that the WTO now has the opportunity to restore its fortunes. Talk of the WTO’s demise as a negotiating forum has been set aside, at least for now. If, in the coming months, the WTO membership takes the right decisions concerning its near-term work programme and assiduously follows up, then such talk might be banished for good. For sure, the Bali deal addressed only part of the Doha Development Agenda and was sealed after its fair share of drama. Still, the run-up to Bali and the Ministerial Conference itself showed that creative solutions could be found, that the membership is prepared to rally around them, and ultimately, that the prospect of another damaging deadlock was unacceptable. How can the WTO build on Bali? The purpose of this VoxEU eBook is to identify a number of pragmatic, near-term options for the WTO’s post-Bali work programme. Twenty-seven contributions were commissioned covering both the strategic considerations that will likely shape near- term deliberations on the WTO’s priorities and the steps that should be taken by the WTO membership in the coming years on a wide range of important topics, ranging from long-standing staples like agriculture to new big-ticket items, such as electronic commerce. What follows here are some reflections of our own, based on these contributions and recent developments. 1 Building on Bali: A Work Programme for the WTO The fate of the WTO should not hinge on the success of its negotiating function The ultimate purpose of the WTO is not confined to the progressive reduction of state favouritism towards domestic commercial interests – it is to discourage the resort to favouritism in the first place.
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