Trade creates wealth. World exports have increased from $60 billion in 1950 to $5,300 billion in 1998--nearly one-fifth of the world output. No doubt, the multilateral trading arrangement under the auspices of GATT/WTO has been a necessary precondition to enable this growth.

Yet, on the eve of the Third WTO Ministerial Meeting in Seattle, scheduled for the end of November, there is lingering doubt, especially among the developing countries, as to the fairness and equity of the multilateral trading system as it exists today. Persistent biases in the system have prevented the developing countries from securing stability and rapid growth. UNCTAD estimates that while annual growth in developing countries in the 1990s has accelerated above the rate of the 1980s, it remains 2 percentage points lower than that of the 1970s, while their average deficit has been almost 3 percent higher. Thus, they come out worse off on both counts. Even worse, there is an unprecedented level of skepticism about the twin phenomena of globalization and liberalization that WTO promotes. This message came through in the regional meetings and consultations that the Regional Commissions organized in their respective regions preparatory to the Seattle meeting.

Developing countries and many countries with economies in transition are suffering from the twin effects of a decline in the terms of trade and an import surge resulting from greater liberalization of trade pressed on by the OECD countries and WTO. Yet, the products and services of interest to them do not find the same access in the developed country markets, nor from their perspective do they seem to get the corresponding fairness of treatment that they deserve. World Bank research indicates that a 40 percent reduction in global agricultural export subsidies would be as effective as an equal percentage reduction in manufacturing tariffs. UNCTAD’s Trade and Development Report, 1999 estimates that in low-technology industries alone, developing countries are missing out an additional $700 billion in annual export earnings as a result of trade barriers. This represents at least four times the average annual private foreign capital influx in the 1990s.

WTO’s membership has grown to 135 countries, with some thirty more in the process of negotiating their accession. The organization is now more encompassing, but still less than universal. Among the 50-odd countries which are not currently members of WTO, with the exception of China, most are small countries with fragile economies. Moreover, many WTO members have discovered that the implementation of the Uruguay Round agreements (especially the complex provisions regarding investment and intellectual property rights--the so-called TRIMs and TRIPs) is financially very costly and demands greater technical resources than they have at their disposal. A World Bank study recently argued that implementing WTO agreements could cost a year’s development budget for the very poorest countries, often for little practical benefit.

It is therefore both a moral and a political imperative to ensure that the interests of the developing and the transition countries must form the centrepiece of the trade agenda in the Seattle meeting. The decision of the ministers must provide for market access in the developed countries for the products of interest to the developing countries, including textiles and agricultural products. Likewise, the developed countries should liberalize the movement of natural persons. Enhancing the participation of the economically disadvantaged countries in the world trading system should be a high priority. At the same time, their participation must be seen to generate real benefits.

It is no longer a question of charity, but that of mutual self-interest. The Asian financial crisis has shown that disruption in one part of the global economy can have vastly disproportionate adverse impacts even on distant continents, including the developed economies. Massive import cuts in East Asia have been a major factor in the recent slowdown of world trade. The success of the Seattle conference will depend on how effectively it is able to address these issues, integrating the developing economies in the world trading system.