What role for multilateralism in trade and development? Pablo Heidrich, Senior Researcher 2011 NSI Ottawa Forum

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1 What role for multilateralism in trade and development? Pablo Heidrich, Senior Researcher 2011 NSI Ottawa Forum

2 State of global trade today Huge: $14 trillion (31% of global GDP 2010) By components and inputs, over 80% AVERAGE of all goods produced... Growing twice faster than global GDP Volatile: -12% 2009, +14% 2010, 7% 2011* HOW WILL TRADE LOOK LIKE IN 2020? IN 2030?

3 Global trade by type of flow (OECD Stats 2010) intra-firm trade: 30% intra-industry trade (BEYOND intra-firm): 40% oil, minerals + other free trading commodities: 15% the Ricardian rest: 15%

4 WTO contribution to global trade Rounds: negotiations where all country members participate and bargain a single undertaking (package) Tribunal: arbitration in international trade disputes Monitoring: scheduled and peer-reviewed assessment of the trade policies of each member Technical assistance: teach DC government officials how to implement WTO rules

5 Contemplating Doha Remember that Ricardian rest? 15% of global trade... agriculture is most of that... plus the NAMA issues to be resolved Most optimistic calculations are $600bn in gains from closing Doha (4% of global trade) No wonder is such a difficult deal to make...

6 Tribunal (Dispute Settlement) 424 cases in 17 years average cost of litigation: $12million average size of industrial sector involved: $1,2bn average time for resolution: 9 months average GDP size of country involved: $350bn effective, compensations limited, size determines real outcome

7 Monitoring (Trade Policy Review Mechanisms) years according to % of global trade Mechanism is clear but defense depends on country's capacity. Trade partners can question directly, depending on their monitoring capacity. Capacity is the biggest asymmetry at play here.

8 Technical assistance (TRTA) up to 20% of total budget of the WTO 30,000 government officials trained per year 500 types of workshops, seminars, activities, simulations geared towards how to comply, implement and internally argue WTO rules NOT geared to teach developing countries how to use the rules. TRTA makes the WTO a de-facto interpretative organ of such rules.

9 Crisis and protectionism ( ) Traditional protectionism has been very mild. 800 measures affecting 1-2% of global trade (WTO June report) 1600 measures affecting 3-4% (Global Trade Alert Network) Non-traditional protectionism has been increasing: Targeted financing Local provision measures Competition policies Migration policies Main trends point to policy capacity as the main enabling component for setting up barriers. Increasing # of measures directed among DCs.

10 Lessons from the WTO A product of the 1990s: Washington Consensus, end of Cold War, US-Euro-global optimism 2011: what product? US-EU-JP crisis, climate change, BRICS, high commodity prices, G20, bailouts galore. 2030:??? Basics All (multilateral) organizations have a heyday, and also many other days. Past glories never return, but relevant contributions can be made.

11 What future for the WTO? New debates will come to international trade governance: climate change decent work industrial policy space Migration R&D and services Will the WTO be ready or be gone by then? gone as into viable irrelevance

12 What relevant contributions? Reform mechanisms for negotiation, disputes, monitoring and technical assistance. Recognize changed face of the global economy. Update view on free trade: a goal, not a mean by itself. Strengthen participation of smaller developing countries. Work with RTAs / FTAs rather than spite them. Relocate and become globally representative (HR).

13 Thank You The North-South Institute 55 Murray Street, Suite 500 Ottawa, Ontario Canada K1N 5M3 Tel.: (613) Fax: (613) /Courriel: Website: The North-South Institute thanks the Canadian International Development Agency for its core grant and the International Development Research Centre for its program and institutional support grant to NSI.