The WTO Negotiations on Industrial Tariffs: What is at Stake for Developing Countries?

Abstract: This paper focuses on the implications of the negotiations on industrial tariffs for longer term industrialization in developing countries. It begins with a brief overview of the NAMA framework that is followed by a review of the historical experience of today’s advanced countries regarding the use of tariffs in the course of their industrialization, and compares and contrasts it with the actual situation prevailing in developing countries today and the proposals put forward. Then it discusses the sectoral pattern and evolution of tariffs that may be needed in the course of industrial development in comparison with the constraints that would result from the proposals made by developed countries, and advances a simple alternative formula that can help reconcile policy flexibility with multilateral discipline. This is followed by an evaluation of various estimates of benefits of tariff cuts to developing countries. There the paper turns to the question of reciprocity from a broad developmental perspective. It is concluded with a brief summary of the key points on how the negotiations could accommodate both the immediate needs and longer-term interests of developing countries.