CDP Background Paper No. 19

by Ana Luiza Cortez and Mehmet Arda

Multilateral trade rules have maintained stable and predictable trade flows. Developing countries increased their participation in world markets but marked asymmetries persist; not all countries are benefitting from trade. Successive trade rounds and numerous regional trade and bilateral investment agreements led to significant loss of policy space and fragmentation. Special and differential treatment has not provided necessary flexibility for implementation of development policies while the principle of less than full reciprocity is eroded. Stronger multilateralism, effective overseeing and enforcing role by WTO and greater focus by developing countries in negotiating flexible rules (instead of exceptions to the rules) are suggested.