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Policy space: are WTO rules preventing development? (pdf 326kb)

Some NGOs and international observers worry that developing countries are losing 'policy space' because of new constraints from international rules which will prevent them from following the most effective development policies.

This paper looks at the restrictive effects of trade agreements on developing country policies, focusing on tariffs, TRIPs and investment. Existing and proposed new rules in relation to trade agreements are examined, with reference to policy formation in developing countries.

It makes the following key points:
- developing countries need 'policy space' to use policy to promote development, but international rules limit it.
- the principal areas where trade agreements do or may restrict countries are tariffs, TRIPs, and investment.
- the evidence is that while some 'space' has been closed, much remains, and space can cause problems as well as create opportunities.

 

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