At the Uruguay Round, developing countries took on unprecedented obligations not only to reduce trade barriers, but to implement significant reforms both on trade procedures (e.g., import licensing procedures, customs valuation) and on many areas of regulation that establish the basic business environment in the domestic economy (e.g., technical, sanitary and phytosanitary standards, intellectual property law). This paper is about the latter commitments. They are more than policy commitments, they are investment decisions. Implementation will require purchasing of equipment, training of people, establishment of systems of checks and balances, etc. This will cost money and the amounts of money involved are substantial. Based on Bank project experience in the areas covered by the agreements, an entire year's development budget is at stake in many of the least developed countries. Would such money be well spent? Least developed country institutions in these areas are weak, and might benefit from strengthening and reform. However, our analysis indicates that WTO regulations reflect little awareness of development problems and little appreciation of the capacities of the least developed countries to carry out the functions that SPS, customs valuation, intellectual property, etc. regulations address. For most of the developing and transition economies - some 100 countries - money spent to implement the WTO rules in these areas would be money unproductively invested. We touch also on another point. Because of their limited capacity to participate in the Uruguay Round negotiations, the WTO process has generated no sense of 'ownership' of the reforms to which WTO membership obligates them. From their perspective, the implementation exercise has been imposed in an imperial way, with little concern for what it will cost, how it will be done, or if it will support their development efforts. Thus the developing countries have neither economic incentive nor political will to implement these obligations. Our analysis is based on World Bank project experience in customs reform, SPS, and intellectual property regulation. In each of these areas we reviewed Bank experience with four questions in mind: 1. How much will implementation cost? 2. What are the development problems in this area? 3. Does the WTO agreement correctly diagnose the development problems? 4. Does the WTO agreement prescribe an appropriate remedy?.
