Brief impressions on the WTO rules and Members’ Policy Space

*Por Renata Amaral

The discussion involving policy space, and its reduction or expansion, after the creation of the World Trade Organization (WTO) is not new. In fact, the debate with regard to the Members’ policy space was first officially introduced in 2006, during the Doha Round negotiations. This short essay intends to briefly shed light on the impact of the rules of the WTO on Members´ policy space.

It is arguable that since 1995, when entered into force, the WTO rules have limited, de jure or de facto, the flexibility of Members in what concern their internal choice of instruments that may be used in the implementation of economic development policy.

Although regulations to discipline the multilateral trade were and are highly desirable, the rules impacted the leeway that WTO Members have available to apply in economic development domestic policies.  Yet, as one can imagine, the restriction on the use of economic means with the advent of the Organization affected significantly developing and the least-developed economies.

According to the United Nations Conference on Trade and Development (UNCTAD) “Trade Development Report 2006”, the WTO rules made it more difficult to governments to combine incentives towards exports with unorthodox economic instruments of which developed and more mature economies largely used in the past.

In this context, to provide an example of Brazil´s inquietude with part of the multilateral trade rules, the country has defended for years the necessity for Members to work on some flexibility with regard to the rules of the Trade-Related Investments Measures (TRIMs), since the Brazilian government has always desired to make use of trade-related investments measures to boost the economic development of the country.  The major argument for that demand – joined by India, Argentina, Colombia, and other developing countries – is that Brazil understands that the problem with TRIMs implementation is the imposition of the Agreement’s rules to all WTO Members in the same manner, regardless of their different stage of development.

Notwithstanding, it is my personal opinion that in spite of governments’ and WTO specialists’ concerns about the restriction on Members’ policy space, the truth is that the adoption of multilateral trade disciplines has represented a huge advance in the global trade system, since it established mutual and reciprocal commitments based on non-discrimination between Members, apart from delivering predictability and legal security to international exchanges of goods. Furthermore, the systemic gains when governments join the WTO still seems to compensate, by large, the policy space restrictions eventually imposed to them.

 


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