It is clear that while the World Trade Organization (WTO) rules-based system seeks to establish a level playing field, remaining trade barriers have a negative impact, particularly on developing countries. Whilst trade barriers in the main markets are now generally low for most trade of developed countries, there is a lack of equal opportunities for developing countries' exports in the present system. Thus, a number of export products of particular interest to developing countries such as textiles are often subject to high import barriers, including non-tariff barriers. Further, support for agricultural production, investment and exports in developed countries [may have] [has] negative effects on [many] developing countries' export and production capacity [where it is of a trade-distorting nature.] And high protection for the domestic food industry in some developed countries hampers diversification and value-added production in developing countries. WTO rules are stringent with respect to subsidies primarily used by developing countries. Also, anti-dumping measures and countervailing duties are used by many countries in sectors where exporters from developing countries are competitive. There is an asymmetry between liberalization of trade in goods and services on the one hand and labour-intensive services on the other, which particularly affects developing countries.
The commodity trade problems giving rise to the greatest difficulty, and hence to the greatest need of being placed in international perspective, are those involving commodities which are produced in the industrialized importing countries as well as in the developing exporting countries. Modifications of import policy in respect of commodities which are not domestically produced are likely to be achieved with much less difficulty. Whatever the domestic justification for measures tailored to the importing nation's needs, the restraint they exercise on consumption and imports is much less defensible in the context of the development needs of the exporting countries.
For the industrialized countries a reduction in protection would allow the deployment of resources in more economic activities and, to this extent, would result in a gain in real income. For the developing countries, easier access to the markets of industrialized countries, resulting from a reduction in protection of commodities of particular interest to developing countries, would allow them to expand their export earnings. Moreover, in so far as the reduction in protection led to a reduction in world supply of particular commodities, prices could also tend to rise, thus adding to the expansion in export earnings resulting from the increased volume of exports to the industrialized countries. For certain primary products, the insulation of national markets in the industrialized countries has reduced the size of the residual world market. Since, for these commodities, it is the residual market which bears the burden of adjustment to changes in world supply and demand, the insulation of national markets tends to accentuate fluctuations in the world price, as measured in the residual market. To the extent that the reduction in protection results in a more unified market, operating on a wider base of transactions, fluctuations in world supplies will tend to result in smaller price fluctuations than under the present system and, for many commodities, in greater stability in the export earnings of the developing countries concerned.