The Emerging Global Trading Environment and Developing Asia

Abstract

The decade of the 1980s saw a dramatic change in attitudes toward trade policies in developing and developed countries. Developing countries came to appreciate the benefits of a liberal trade regime and went on to unilaterally dismantle their trade barriers. At the same time, battered by either a high rate of unemployment or declining wages of unskilled workers or both, developed countries found themselves yielding to protectionist pressures. Voluntary export restraints proliferated and antidumping actions became the order of the day. To top that, abandoning many decades of opposition to regionalism, the United States went on to conclude preferential trading agreements with Canada and Mexico. Against this background, the successful completion of the Uruguay Round (UR) agreement has a special significance for Asian developing countries (ADCs). Trade is the lifeblood of these economies, and a reaffirmation of the commitment to continued trade liberalization by the membership of the World Trade Organization (WTO), the successor institution to the General Agreement on Tariffs and Trade (GAIT), is of utmost importance to them. The agreement will not only help contain protectionist pressures in developed countries through more stringent antidumping and safeguard requirements and an effective dispute settlement undertaking, it will also expand market access for ADCs, particularly in the critical sector of textiles and clothing. Of course, the agreement will also bring new obligations for ADCs. Thus, like other signatories to the UR, they must institute tighter intellectual property rights regimes and phase out trade-distorting subsidies and investment measures. As negotiations for the liberalization of trade in services proceed, they may also have to open their markets in services to foreign suppliers.