The WTO’s Special Burden On Less Developed Countries

The General Agreement on Tariffs and Trade was a card of profes-sional wrestling, put on for a good cause. The political groans and grimaces that kept the true believers at the edges of their seats, an economist knew, were fake. In the GATT, the pains that participants complained about were mere politics. A government might protest having to cut its own tariffs, but an economist knew that those cuts would make the economy more productive, not less. The political discomforts were growing pains perhaps, surely not warning signs of injury. Although the GATT was a game that an economist could enthusiasti-cally cheer, the World Trade Organization is something else. Some of the concessions the WTO asks for (or assigns) are indeed economic costs, not mere mercantilist misperceptions. Although it did not make sense for an economist to ask about the GATT, ‘‘Is it worth it?’ ’ it does make sense to ask that question about the WTO. The distinction I allude to between the WTO and the GATT is more precisely between liberalization of border measures such as tariffs and quantitative restrictions—the business on which the GATT was built—and the creation of rules on nonborder measures that affect trade. The latter is a considerable part of the WTO. At the Uruguay Round, countries took on major commitments to modernize regulations and institutions of trade administration—for example, cus-toms valuation. Countries also took on obligations in areas usually thought of as domestic regulation—for example, intellectual property rights, industrial standards, and sanitary and phytosanitary (SPS) standards. These matters, I suggest, differ in two ways from reducing trad