CIAO DATE: 06/02

Preferential Treatment in Trade: Is There Any Room Left in the Americas?

Seven years after the conclusion of the Uruguay Round of the General Agreement on Tariffs and Trade, the developing countries find the agreement's results disappointing. Inroads in market access for their products have barely been attained. Since asymmetries in the Uruguay Round were only recognized for the least developed countries, preferential trade treatment has been maintained at a minimum level for the rest of the developing world. Will negotiations within the Free Trade Area of the Americas (FTAA) follow the Uruguay Round's path? Will countries and subregions within the Western Hemisphere be treated as equals in the FTAA — regardless of their sizes, economic capacities, and trade competitiveness? How will costs and benefits be distributed among the developed and the developing countries of the Americas? Leveling the playing field of hemispheric trade through mechanisms of preferential treatment should not obstruct the formation of the FTAA. Instead, agreement on acceptable measures would help developing countries to avoid great losses and to become much more competitive.

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