Back to the Main ET Page

WTO Negotiations:  Invest in Research

Arvind Panagariya

Located in Geneva, WTO is far and away from most developing-country capitals.  Immediate, day-to-day domestic concerns in these capitals leave little room for long-term thinking on issues that continuously simmer at the WTO.  Even large developing countries such as India seem to lack the capacity for systematic research on how best to promote their interests in trade negotiations.  As a result, while developed countries gear up to launch yet another round of negotiations, our reaction is to oppose it entirely rather than shape its agenda according to our interests.

Given the far-reaching implications of the decisions made under the auspices of the WTO, the need for conducting research on a continuous basis and developing long-term strategies cannot be overemphasized.  Developed country members of WTO such as the United States and the European Union take this research very seriously.  By the time they are ready to place a subject on the WTO agenda, they have conducted numerous studies on it.

But this is not all.  To draw developing countries into the negotiations, developed countries promote research at multilateral institutions on the impact the negotiations would have on developing countries.  Thus, soon after the European Communities put forward the proposals for the Millennium Round, the United Kingdom went on to establish a $5 million trust fund at the World Bank.  The principal objective of the fund was to do research on the implications of the round for developing countries and to help them prepare for the negotiations.

To-date, developing countries have relied heavily on multilateral institutions, principally the World Bank, for research on WTO matters.  This dependence is laden with risks.  Being dominated by developed countries and yet having broad acceptance as developmental institutions, at crucial moments during the negotiations, these institutions successfully promote the ethos that the interests of developed and developing countries are in harmony.  While this may be true to some extent in matters such as trade liberalization, when it comes to issues such as the Agreement on Trade Related Intellectual Property Rights (TRIPs) and the social and environmental clauses in the WTO, the interests of the two sets of countries are in direct conflict.

The danger of reliance on multilateral institutions and developed country think tanks for conducting research is amply illustrated by the experience during the Uruguay Round negotiations.  Researchers at these institutions emphasized to developing countries only the benefits of the UR Agreement, often exaggerating them.  In the quantitative estimates of the round they produced, the costs associated with the Agreement on TRIPs were systematically excluded.  In qualitative discussions, repeated claims got made that the Agreement on TRIPs was in the long-run interest of developing countries.  Public relations officers of the respective institutions further magnified the upward bias. When presented by their researchers with multiple estimates, they frequently chose the largest ones to give to the press.

The ethos created by the studies that systematically overstate the net benefits of an agreement to developing countries is likely to have an adverse effect on their bargaining power.  It is for this reason that developing countries need to build their own research base on the short- and long-term WTO issues, devoting substantial human and financial resources to them.  Developing countries not only need to be able to assess critically the research done by the institutions that may have a vested interest in promoting the interests of developed countries but must also offer and disseminate their own research to influence the international public opinion.

Thus, it is not sufficient, as is the practice currently, for developing country researchers and policy specialists to travel abroad to attend conferences in developed countries to understand the latter’s viewpoint.  It is equally important for developing countries to conduct their own conferences and disseminate their findings to developed country researchers and policy analysts.  This means for developing countries to host seminars and conferences not just in their own countries but also in Geneva and Washington and to invite developed country researchers and policy makers to participate. 

Building research capacity and disseminating findings in international forums are costly activities and raise the obvious issue of resources.  Given the financial constraints developing countries face, it is tempting to fall back on the funds provided by developed countries either directly or through multilateral agencies as a part of their “capacity building” initiatives.

While recognizing that foreign funds do have a positive role to play in many research activities, in matters relating to WTO negotiations, it makes more sense to rely on domestic funds.  Leaving aside some foreign agencies that are genuinely motivated by the desire to promote developing country interests, most agencies are likely to exact a price for the funds they give.  This price will come in the form of the influence they exert on the outcome of research.

One way this influence is exerted is by offering funds to researchers who are favorably disposed to the view espoused by the funding agency in the first place.  Alternatively, given their dependence on the funding agency, the researchers themselves are vulnerable to endorsing the agency’s view.  Yet another instrument the funding agency has at its disposal is the selection of research topics that are funded.  For instance, to my knowledge, no multilateral agency has funded research on the benefits of promoting labor mobility from developing to developed countries even though, prima facie, such mobility is enormously beneficial to them and the world.  Funding on research on capital mobility, on the other hand, has been plentiful.

The bottom line is that, in the long run, large developing countries such as India must make a substantial commitment of human and financial resources to promote research of their own in the area of WTO issues.  With WTO agenda rapidly moving into areas where the interests of developing and developed countries are in conflict with each other, developing countries need to be able to influence the ethos that governs the negotiations.

Economic Times, October 20, 1999