For many developing countries trading in intellectual property has been a spectator sport. Active play in the high stakes game of ‘trading in knowledge’ has been for a few wealthy countries whose institutions and citizens own intellectual property (IP). These IP-owner countries have the equipment needed to play – the funding systems, patent lawyers, marketing support services, and thriving government subsidized research labs and universities – enabling them to turn their research and development into IP, intangible but highly valuable financial assets. In the game of ‘trading in knowledge’, capturing strategic IP portfolios is the goal, and lucrative licensing contracts are the touchdown.

Developing countries are becoming more active participants in trade negotiations as manifested by the role played by recent coalitions comprising primarily developing countries (G20, G90; WTO Africa Group). Four small African countries (Benin, Burkina Faso, Chad, and Mali), previously unfamiliar to most trade diplomats, assumed centre stage at the Cancun WTO Ministerial. Burkina Faso and Mali do not even have an embassy in Geneva.

Some cases attain ‘landmark’ status because they constitute a jurisprudential paradigm shift. Others attain such status because in them a decisor, usually a supreme jurisdiction, renders a definitive, ‘canonical’, ruling. Sometimes it is both reasons. Sometimes, rarely, it is neither. EC–Asbestos is such a rare case. It may well qualify as a landmark. It has, justifiably, attracted huge attention and, understandably, considerable controversy. Its reasoning, however, is so decidedly non-definitive that it is not, consequently, possible to say whether it represents a veritable paradigm shift or is just a badly reasoned case by the Appellate Body (AB), albeit with a non-controversial result.

The two papers address questions related to the role and place of small, developing countries in the global trading system and in multilateral trade negotiations, reflecting the resurgence of interest in recent years in size-related constraints to development and to participation of small economies in international trade.

The number of sovereign states has steadily increased over the past few decades and is rapidly approaching two hundred. Many of these countries are small. The median country size in terms of population is around five million people. Tuvalu, the smallest state with a seat at the United Nations, has 11,000 people. The smallest country in the sample studied by Winters and Martins (W&M) is Niue, a self-governing country in free association with New Zealand, with only 2,000 inhabitants.

The two papers in this special issue both look at the problems that small economies face in participating in the world trading system. For Winters and Martins (W&M) small means small in population; they motivate their analysis with reference to the 82 countries with the smallest population, accounting collectively for less than 0.5% of world population. Many of these countries are also remote, making trade costly. For Mattoo and Subramanian (M&S) the focus is on countries that are small and poor; their list covers the 73 countries which each account for less than 0.05% of world imports and which also have low income. They investigate the engagement of these countries in the WTO. My comments will address both papers, although focus on W&M.

We are grateful to our commentators for their insightful contributions on our paper. We shall not respond to them one-by-one but rather very briefly address the main themes of the commentaries taken as a group.

We are grateful to the commentators for their valuable observations. We cannot do justice to the full range of comments we have received. Below we respond briefly to some of the issues raised.

The gas dual-pricing system in Russia has been a highly contentious issue in the context of the ongoing negotiations on the accession of Russia to the WTO. At present the domestic price for gas in Russia is set by the Government at a level several times lower than the freely negotiated export price. In the view of the European Union and other WTO Members such a policy is not permitted under WTO disciplines, while Russia persists in viewing the existing dual-pricing system as WTO consistent. The article pursues a legal assessment of the issue, demonstrating that although the Russian gas pricing system can be considered a subsidy, this subsidy is non-actionable under the WTO rules. This means that Russia has merit in its attempt to keep the gas pricing system in place after it accedes to the WTO.

Good evening. I am delighted to be back here this evening among so many oldfriends.

In the traditional theory of international trade, multilateral trade agreements should be easy because self-interested governments unilaterally commit to reduce their own protection and, as a bonus, they reap positive externalities from liberalization by other nations. In practice national governments do not behave as though they are maximizing the welfare of a representative citizen, but instead they respond to pressure from a diverse mix of constituencies and competing special interests. Governments attempt to manage domestic trade-offs within international negotiations, so progress is slow and protection persists. The practical operation of trade negotiations, emblemized by the infamous ‘green rooms’, is characterized by factionalism, horse-trading, and brinkmanship.

This paper addresses the dispute brought to the World Trade Organization (WTO) by Argentina concerning certain Chilean measures affecting the importation of wheat, wheat flour, oil seeds, edible vegetable oils and sugar. The complaint by Argentina challenged two types of policies – a ‘price band system’ that was applicable to four of those product categories, and safeguard measures that were applicable to three of them. The WTO panel ruled in favor of Argentina on both sets of measures. It found that the price band system violated Article IV of the Agriculture Agreement and Article II of GATT 1994. The safeguard measures, according to the panel, violated various provisions of the Safeguards Agreement, as well as Article XIX of GATT 1994. Chile elected not to appeal the panel ruling regarding the safeguard measures, but did appeal the adverse finding as to the price band system. The Appellate Body subsequently affirmed in substantial part the finding that the price band system violated Article 4 of the Agriculture Agreement, but reversed the finding of a violation under Article II of GATT 1994. Chile has since indicated an intention to comply with the ruling, and an arbitration pursuant to Article 21.3 of the DSU determined that the reasonable period of time for compliance would expire on December 23, 2003.