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Unit 14: Globalization

time, certain apprehensions have surfaced regarding the WTO’s ruling in favour of reduction in Notes
subsidies for agriculture, phasing out of public distribution system and compulsory market access to
agricultural imports.
Textiles and Apparels

Less developed countries with an edge in the manufacture of textiles and apparels have benefited
from the multi-fibre agreement (MFA) for progress in unraveling the MFA is expected to bring major
benefits to these countries. Yet there is a cause for concern because the phasing of MFA is accompanied
by a system of what is known as “transitional selective safeguards” whose operational details have
not yet been defined. This in turn could restrict the growth in exports of textiles by the less developed
countries. Also, there are already anti-dumping laws in hands of the industrially advanced countries
which they may use to restrict the textile export from less developed countries.
Tariffs on Industrial Goods
The prospects of reduction in industrial tariffs have greatly improved. Yet, the benefits are not likely
to be substantial because already the tariffs on imported industrial goods are low, besides the proposed
tariff cuts are likely to be concentrated in areas of less importance to developing countries.
Services

In the area of services, the less developed countries notwithstanding their demands have still to work
out a viable way out for the export of skilled and unskilled labour, negotiations for which are still in
the very initial stages. The only compensation is that several of the areas for liberalization in the
service sector are yet to be negotiated.
Intellectual Property Rights
Intellectual property is the area where new and tougher rules would put the less developed countries
to greater hardship. Despite the efforts made by several of the developing countries including India,
not much success has yet been achieved. For, after all, in some of the identified sectors like chemical
and pharmaceutical products, biotechnology and propagation of improved varieties of seeds and
microbiological processes for developing new fertilizers and pesticides the developing countries may
have to make royalty payments to the industrially advanced countries. Some of the expressed fears
of the less developed countries such as non-availability of needed technology at affordable costs, the
pre-empting of domestic technological capacities by the more advanced countries and the incidence
of restrictive business practices by the TNCs are admittedly justified. It is in these areas the less
developed countries may have to evolve a concerted policy posturing within the forum of the WTO.
Trade Related Investments
Yet another area in which the less developed countries need to evolve a concerted policy response is
trade related investments. Otherwise, the current regime on trade related investments will severely
jeopardise the ability of the less developed countries to regulate the foreign capital inflows in
accordance with their objectives and priorities. Besides, it will also weaken the domestic capital goods
sector and arrest the growth of indigenous technological capacity.
Needed Policy Framework

The overall response of the less developed countries towards the current phase of globalization is
based on their justified fears and apprehensions. As has been stated earlier, the less developed countries
as a whole have made the right choice not as much to disengage themselves but to engage in an
effective manner in the current globalization process. At the domestic level, the policy responses are
based on the rationale that at all odds they will have to insert themselves into the global economy
with a view to benefit by it and at the same time make an effort to minimize the adverse and deleterious
consequences. Towards this effort, while the less developed countries are, to the extent possible
making efforts to come up with a policy package-be it in terms of structural adjustments or trade

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