When his company received a hefty order from a Swedish importer in August 2000, Prem Raj Tiwari rejoiced with much enthusiasm at a relatively big business deal. The single largest export order the company ever had for ayurvedic products — processed medicinal herbs — had strengthened his aim of reviving the company’s languishing export trade by cashing in on the flourishing world demand for herbal products. But Tiwari’s enthusiasm was soon dashed when he received an e-mail from his Narkayrd-based Swedish counterpart withdrawing the order. The mail stated that the company’s product samples did not pass the ‘satisfactory and sufficient’ sanitary and quality standard tests for access to the Swedish market. Moreover, Tiwari was astonished to learn of the requirement for a certificate of good manufacturing practices (GMP) for each consignment.
Nepal is a small landlocked country situated between China and India. Access to sea is only through India, and India is also Nepal’s major trading partner. Trade with India constitutes 55.9% of total trade, according to 2003 data. A bilateral trade treaty between Nepal and India governs the trade between these two countries, and similarly the transit treaty between two countries provides Nepal with access to the sea.
The treaties could not be renewed in 1989, when they lapsed, due to certain disputes, and the impasse resulted in a serious shortage of goods in Nepal, including critical inputs to the manufacturing sector and goods meeting basic needs. The difficulties that Nepal had to face because of bilateralism compelled it to seek entry into the multilateral trading system. Thus shortly after the trade and transit treaties with India lapsed, Nepal applied for accession to the General Agreement on Tariffs and Trade (GATT — the WTO’s predecessor).
Initiating the accession to the WTO was apparently among the first genuinely independent foreign political moves by Mongolia in the multilateral arena. But, after decades of COMECON (Council for Mutual Economic Assistance) membership, the pragmatic, realistic and money-driven mentality of the GATT was not quite familiar to the Mongolians, including their negotiators, at the launch of Mongolia’s accession process. This lack of knowledge and understanding, coupled with a newly emerged private sector, led to a lack of political will to mobilize resources and stir a broad-based debate at national level so that the country as a whole could understand what the GATT/WTO accession could bring to the nation. As a result there was no serious economic analysis as to the consequences (be they positive or negative) of accession, except for the political objective of joining the club (i) before its two big neighbours (Russia and China); and (ii) with a view to showing the rest of the world that it was serious in its intention of embracing the market economy unreservedly.
In April 2003 the Mexican government reached an agreement with more than twenty-five organizations of small-scale farmers through which a restructuring of agricultural policies was envisioned. The so-called agro-pact came after many months of peasant mobilizations in which market liberalization — scheduled to coincide with the tenth anniversary of the North American Free Trade Agreement (NAFTA) — and electoral campaign became intertwined. The flagship of peasant mobilizations was the renegotiation of NAFTA’s agricultural chapter. The Mexican government did not accept this demand, but agreed to undertake a comprehensive reform of domestic agricultural policies and activated trade remedies as part of an armour plating in defence of agricultural interests. In parallel to this, Mexico joined the G20 group within the WTO and began actively to call for the suppression of export subsidies and the reduction of domestic supports within agricultural markets. This study shows how agricultural trade policies in Mexico have been modified in response to peasant mobilizations and international commitments. It also shows how Mexico’s position within the WTO has maintained an equilibrium between domestic constraints and international imperatives.
Since the conclusion of the Uruguay Round and the establishment of the WTO, the active participation of developing countries in the multilateral trading system has increasingly been recognized as a crucial element for their development as well as an imperative to ensure the legitimacy and sustainability of the world trade regime. Yet many poor countries do not have the capacity to influence significantly the WTO negotiations or to implement the commitments agreed multilaterally. They still face major challenges to determining and defending their positions in technical negotiations, even on issues which are of key strategic interest to them. Indeed, the unprecedented depth and breadth of issues discussed in the current Doha Development Round have put the capacity of the developing countries (DCs), both at home and in their Geneva missions (for those that can afford to have one), under extraordinary pressure in effectively managing the process of their participation in these WTO negotiations.