Nobel prize-winning economist Professor Joseph Stiglitz called for a ‘Right to Trade’ to be enshrined in the rules of the World Trade Organization (WTO) and enforced through its dispute settlement system in a new report for The Commonwealth on 26 June.
In the The Right to Trade: Rethinking the Aid for Trade Agenda authors Professor Stiglitz and Andrew Charlton propose a ‘Right to Trade’ mechanism that would enable countries to bring legal action to the WTO against states whose policies restrict their ability to trade.
Professor Stiglitz said at the launch: “Despite some successful projects Aid for Trade has been a disappointment. The aid goes through bilateral channels according to the priorities of the donors, not recipients.
“The WTO is a legal framework that attempts to enshrine some rights. We’re saying the ‘Right to Development’ and the ‘Right to Trade’ should be part of the legal framework of the WTO.”
The authors added that any group of individuals harmed by the actions of another country would also have the right to bring their case to the WTO. They also propose a Global Trade Facility – a dedicated fund to which all aid donors would contribute resources based on their needs, which would go towards Aid for Trade.
The report was launched at the WTO at a Commonwealth Secretariat workshop on improving the integration of least developed and small and vulnerable economies in the multilateral trading system. Participants at the workshop and launch included policymakers and trade negotiators and experts from across the globe, senior officials of the WTO, UNCTAD and other international organisations.
Professor Stiglitz said: “I believe that there is scope for an effective Aid for Trade agenda that would lessen supply side constraints and offset some of the increases in inequality and poverty that result from trade liberalization.
“A recognition of a right to development and trade as an enforcement mechanism in the WTO framework would ensure Aid for Trade works for poorer countries.”
Director of Economic Affairs at the Commonwealth Secretariat, Cyrus Rustomjee, said: “Over many years The Commonwealth has focused on systemic issues in the functioning of the WTO to advance the Doha Round, which aims to reform the international trading system to improve the trade prospects of developing countries. We’re very strongly committed to the successful conclusion to the round and a strong multilateral trading system.”
The discussions at the workshop - organised by The Commonwealth’s London and Geneva based offices - will benefit countries preparing for the forthcoming Global Review of Aid for Trade in Geneva in July and the 9th WTO Ministerial Conference in Bali, Indonesia, in December.
On 25 June The Commonwealth also launched a practical guide on getting the most out of trade negotiations for small states: Negotiating Against the Odds: A Guide for Trade Negotiators from Developing Countries.