Introduction

International body that promotes and enforces the provisions of trade laws and regulations. The WTO has the authority to administer and police new and existing free trade agreements to oversee world trade practices, and to settle trade disputes among member states.

The WTO was established in 1994 .The WTO began operation on January 1,1995. The WTO is based in Geneva, Switzerland.

Critics charge that WTO trade rules do not sufficiently protect workers' rights, the environment, or the human health.

In the last fifty years, great progress has been made in integrating developing countries into the multilateral trading system and in their participation in the WTO. But the progress has been uneven, with some developing countries still only marginally integrated in the global economy. The pace and scope of liberalization has varied among developing countries, all have participated in the process.

In goods sector all developing countries have conducted programmes of tariff reformed reduction. Many have also reduced export taxation and subsidies. In services, developing countries have made significant steps in autonomous liberalization and bound many sectors, modes of delivery and investment regimes.

These important developments in trade policies have been complemented by liberalization of exchange controls and restrictions on current account.

This paper reviews how the development dimension has been addressed for developing countries in the the WTO and to check if the implementation of free trade is beneficial for developing countries or not.

Statement of the Problem "Developing countries vs WTO WTO members are distinctly divided into two categories: Developing countries Developed countries.

Most of the articles and agreements of WTO are favoring developed countries. The rule and law makers of WTO are developed countries and they arc the significant fund provider to WTO. They use their authority to shape WTO's laws and regulations according to their own needs. But there is no one who listens to the problems of the developing countries; economic interests of developing countries are not secured by WTO.Therefore the gap between the developed and under developed countries is widening . Objectives of the Study To check the benefits of free trade for developing countries. To determine the factors creating hurdles for developing countries under WTO.

 The scale at which developing countries adopt free trade liberalization. These factors would be discussed with the following variables:. GDP External Debt Trade balance Methodology To conduct this study we first gathered data from different sources. Main sources of data are: Economic Survey of Pakistan PDR The Economist International Statistical Review Organization of Data First provided introduction of WTO then statement of the problem is provide then objectives of the study i.e., Developing Countries vs. WTO. Then we reviewed the different research article by different economies of the world and summarized these articles. Then we sorted out different finds from the tables provided in this whole literature. Considering different variables such as GDP, Trade Balance, External Debt etc. In the end different suggestions are recommended for developing countries to achieve economic progress. 1. Review of literature

Greider (December 1999) says that WTO lack authority to control the trading issues of world. The countries which sponsor the WTO to run its issues arc not allowing WTO to take such steps which are against them and are in favor of developing countries. WTO must also use its authority to remove child labor, improvement in working conditions of laborers in member countries. If the governments of countries will check these issues then this thing is against WTO agreement.

Elizabeth Becker (August, 2002) in this article discusses about the harmful effect on the developing countries of the farm subsidies America is providing. The 2/3rd of the population of the developing countries live on farms and America subsidies on farm production in their sector arc becoming very harmful for developing countries.

Tutwiler (June, 2005) explains that trade relates to growth and that economic growth is essential to end poverty in developing countries. He explains that agriculture growth, rural development, and poverty alleviation can be done with free trade within fellow developing countries.

Vogel (2005) says that WTO has the power to check new and existing free trade agreements and it has the authority to settle any trade dispute among the member countries. WTO is formally structuralized and has its own law. Some people criticize WTO because its rule does not provide protection to the rights of workers. WTO is also criticized because; the press is not allowed to know about WTO decisions on the trade disputes.

Vogle says (2006) that the constitution of WTO protects the property rights but does not protect the rights of workers and environmental concerns arc becoming the cause of criticism. If reforms are not made in WTO, then WTO will collapse. Human rights and environmental concerns are not protected by WTO, so there will be many challenges because the companies to get success use child labor, prison labor etc. These issues are the direct challenges for the authority of WTO. Dr. Abdul Sapoor (November 2006) says that countries which want to get the benefit of free trade and want to transfer these benefits to the poor people of that country should take some complementary steps in education, transportation, and health facilities. China and Indonesia have invested in roads and agriculture facilities which have helped them to reduce poverty. Bangladesh has improved the female employment rate by giving them loans and producing their products at home and then exporting their products. Zaidi (2006) says that one of the main objectives of WTO is to safe guard the share of developing countries especially of least developing countries in global trade so that their needs for economic development can be fulfilled. Some of the developing countries like China, India, Malaysia, Brazil, Korea has got benefits from liberalization of trade. Due to factors such as high technology and largo scale economies. Greider, in this article discusses that the developing countries don't fully trade with each other. Exporters of developing countries are still having trade with developed countries. The markets of developed countries provide low profits and there arc many restrictions to enter to these markets. But many developing

countries provide different attracting investment opportunities for other developing countries. These developing countries can get benefit by trading with each other. Paul says that the main responsibility of WTO is to promote free trade. Agriculture is the main source of economic growth in developing countries. Developed countries insists developing countries to open up their agriculture markets and stop providing subsidies on agriculture products. In textile sector the same attitude is adopted by the developed countries towards developing countries. Agriculture and textile are the main sources of foreign trade for developing countries. Although the developing countries says that they have opened their markets for free trade but the true picture is that the developed countries resists to import products from developing countries. Blusteim explains that the developing countries arc not happy with the proindustrialized countries policies of free trade. Developing countries are asked by developed countries to cut down bigger percentage of tariffs on agriculture products, so that the developed countries can sell more of their products to the developing countries. Steven says that WTO has two main purposes to make rules for world trade and to settle trade disputes between the nations. The members of WTO consist of industrialized nations as well as developing countries. The economist who supports WTO says that the WTO is beneficial for the expansion of trade in the world and it will help to turn low inflation and it will increase product quality. WTO is an organization which drafts trade rules for global trade and tries to end the disputes among the member countries. Industrialized/developed countries are not letting the WTO "PRO POOR". Some of the WTO policies are against worker rights and environmental concerns. Some of the developed countries have

received some benefits due to liberalization of trade but most of the developing countries are not reaping the benefits of economic progress. 2. Findings and Analysis of data Although some policies of WTO (Liberalization of Markets- Free Trade ) has helpedsome of the developing countries like China, India, Korea, Taiwan, Malaysia to boost-upthere economies but the most developed countries like African countries, Pakistan etc.have not reaped the benefits by the adoption of WTO policies. It is because when we compare the scale of economy of Pakistan with China we come to know that the marketsize, land and the population strength of China is far greater than of Pakistan. But whenwe compare Pakistan with Korea we come to know that the Koreans have much less landand population than Pakistan but they have developed themselves in high tech industry. In 1990, the share of 10 leading developing countries China, Hong Kong, South Korea, Taiwan, Singapore, Mexico, Malaysia, India, Thailand, and Brazil - in global exports and imports was 13.44 and 13.06 % respectively. In 2004, the share of the same 10 countries in global exports and imports had reached 23% and 20% each. Minus these 10 economies, the percentage share of developing countries in global exports and imports in 1990 was 10.77% and 9.49% respectively. In 2004,that share was 10.75% for exports and 10.43% for imports. The share of the 10leading economies in total exports and imports of developing countries in 1990 was55% and 58% respectively. The share has increased to 68% for exports and 69% for imports in 2004.

On the other hand, LDC (Least Developed Countries) - the countries most in need of benefitsaccounted for less than 1% of global exports and imports in 1990 and continued to have that low share in 2004. In terms of their in developing countries' trade, the situation is disappointing as well. In 1990, LDCs accounted for 2.32% of exports and 3.14% of total imports. In 2004, their share in exports and imports had fallen to 1.92% and 2.29% respectively. The top ten exporters in south- south trade in 2003 were: China (19.7%), Hong Kong(14.2%), South Korea (11.1%), Singapore (9.4%), Taiwan (9.3%), Malaysia (6%), Thailand(4.1%), India (3.4%), Brazil (3.3%) and Indonesia (3.1%). These countries together accountfor 83.5% of exports in south-south trade. This makes it clear that the capacity to drive benefit from opportunity thrown up by trade liberalization is dependent on the supply side and strength of developing countries. Two types of countries arc beneficiaries of trade liberalization.

On the one hand, there are bigger countries like China and India where firms can realize the economies of scale and thus price-out their competitors in foreign countries by offering cheaper products.

On the other hand, there arc smaller but relatively advanced developing countries like South Korea and Singapore whose exports depends on high tech value added products. These countries compete not only on the basis of price but on the basis of product differentiation. It is also marked that while the developed countries insist on continuation of their past practices, developing countries are being forced to open up there markets and also withdraw the subsidies provided to agriculture. Developed countries provide subsidies to many sectors, agriculture in particular, which comprises of a small percentage of population. These groups may be small but enjoy enormous political clout and are capable of pressuring there governments to continue subsidy on farm products. As against this a country like Pakistan has to protect the interest of millions of people, more than 50% of total population, dependent on agriculture. Therefore if we apply the policies of WTO at the right moment it will cost very heavily to the agriculture sector of Pakistan. The general consensus is that WTO members are distinctly divided into two categories, developed and developing countries. Most of the articles and agreements are tilted towards developed countries. To bring a change or amendment in these articles developing countries will have to join their hands to reap the real benefits of globalization.

As regards textile quota phase out and its integration in free trade regime, the experience of developing countries may be expressed as 'completely disappointing'. Some of the textile products have been termed 'sensitive' by the developed countries and their integration is being done at a very slow pace. These products are the main foreign exchange earners for the developing countries. Despite the claim by the developed countries that their markets are open, they resist import of various commodities from the developing countries by imposing non-tariff barrier Considering the imports and exports of developing countries, after attempting some polices, 2000 we came to know that the balance of import and export is mostly negative. So if these countries implements WTO right now, they will be at a great loss.

2.1 GDP Growth Rate After 2000, the GDP growth rate of developing countries is showing the positive results, the reason for this is completely not due to WTO implication/liberalization but there are some other factors also such as external aid etc.

2.2 Current Overview of LDC Economies

According to UN data profile, the current economic condition of least developed countries is given below:

The share of developing countries in global exports has gone up from 24.21% in 1990to 33.46% in 2004 and their share in imports increased from 22.52% to 30.43% during this period thus the developing countries taken as a group have done well in terms of their share in global trade. But this performance can easily be attributed to relatively advanced developing countries (Korea, China, Hong Kong, Singapore, etc). The evolution of developing countries* share of world trade in total merchandise and in manufactures and gives a snapshot of their current position in services trade. The increase in the share of developing country merchandise exports accounted for by manufactures, from 7 per cent in 1963 to 65 per cent in 1995 and 1997, reflects a shift in the export structure of developing countries away from primary products and raw materials. Again, regional differences arc very marked: the share of merchandise exports from China accounted for by manufactures rose from 25 per cent to 88 per centbetween1963 and 1995, while the share of manufactures in African merchandise exports rose from2 per cent to 28 per cent over the same period.

During the period 1970-1997, the openness of all regions to trade (as measured by the share or merchandise trade in GDP at constant prices) has increased considerably. For the world as a whole, the trade-to-GDP ratio has risen from 13.8 to 26.5 per cent in this period, with the most rapid increase between

1984-87 (when the ratio stood at approximately 18per cent) and 1997. In the same period, the trade-to-GDP ratio for developing countries rose from 23 to 35 per cent; most of this increase again took place since the mid-1980s. Some of developing countries like Brazil, China, India etc. the percentage growth rate of their capital is very high but for the most of developing countries it is low. Cumulative Percentage Annual Growth Rate (1995-2005). Based on balance-of-payments data, the total value of world exports of commercial services was estimated at USD 1,310 billion in 1997. The United States and Canada were estimated to account for approximately one-fifth of this total; Western Europe for 45 per cent; Latin America for some 4 per cent; Africa for 2.1 per cent and Asia, other than Japan and Australia, for some 16 per cent. Roughly, therefore, developing countries accounted for about 21 per cent of world exports of commercial services.

3. Developments since the Establishment of The WTO The trend towards fuller participation of the developing countries in the multilateral trading system has continued since the establishment of the WTO. Negotiations under the GATS which were carried forward from the Uruguay Round have resulted in substantial commitments from these countries. Another noteworthy area of their participation has-been the Information Technology Agreement. The WTO Members have also taken further initiatives for the benefit of the least- developing countries in the following fields: 1. Telecommunications 2. Unications

3. Financial services 4. Movement of natural persons 3.5 The Implementation of the WTO Agreements: Developing Countries' Concern:

In reviewing the implementation of the WTO Agreements, developing country Members have identified a variety of issues reflecting their diverse interests and priorities. These relate mainly to the following areas: (i) trade opportunities for products of interest to developing countries; (ii) provisions that require WTO Members to safeguard the interests of developing countries; (iii) transitional periods; and (iv) techn ical assistance to developing countries.

The persistence of impediments to market access in areas of export interest to developing countries has been identified as a major policy concern. Developing country Members have cited the adverse effects of tariff escalation and tariff peaks both in relation to agricultural products and industrial goods.

There are also concerns that burdensome administrative and customs procedures, changes to rules of origin and frequent use of safeguard measures are adversely affecting exports of textiles and clothing products from developing countries. Recognition and safeguard of interests

As noted, most of the WTO Agreements contain provisions for the recognition and safeguard of developing countries' interests. Developing countries have claimed that these provisions have been largely ineffectual. Concerns have been also raised that initiatives are lacking to facilitate the active participation of developing countries in therelevant standard setting organizations.

Transitional periods

Transitional periods are intended to facilitate the implementation of WTO Agreements by developing countries. It has been claimed, however, that the transitional periods do not always give sufficient time to deal with specific shortfalls in capacity that are faced by individual Members, or with their precise development needs. Specific areas in which need for extension has been referred to by some include those related to export subsidies for industrial products, TRIMS and TRIPS.

Technical assistance

Many Members have stressed the critical and continuing need for assistance to strengthen the technical capacity of developing countries in order to permit them to meet their WTO obligations. In addition, Members have emphasized the importance of matching assistance more closely to the specific technical or legal needs of individual developing countries. For this purpose, while recognizing the

efforts made by the international community, especially in the context of the LDCs, there have been calls not only for an increase in technical assistance, but also for more effectively co-ordinate technical assistance from all sources.

Now considering PAKISTAN

Pakistan today meets most of the essential requirements that the foreign businesses and investors are looking for. Macroeconomic stability, deep-rooted structural reforms, high standards of economic governance, outward looking orientation, liberalized trade and investment regime, easy access to policy makers, low production costs, sophisticated financial sector and its location as a regional hub make it a highly attractive country for business and investment.

At the time of army coup, October 1999 in Pakistan the economic condition was not very good. Soon after the military takeover Pakistan was forced to become the part of alliance against the terrorism in the world. Pakistan had a dramatic economic changes after military takeover. It is not because of good economic policies but it is because of external aid which Pakistan received after becoming the part of global alliance against terrorisms.

At the time of army coup the GDP growth rate of P a k i s t a n w a s 4 . 2 % w h i c h exceeded to 6.4% in 2004. Similarly, the exports has risen from US $ 7.8 billion to US $13 billion. But the

unemployment level has risen from 6% to 8%. So if Pakistan adopts more policies for trade liberalization there is a risk of more unemployment.

Considering the case of Pakistan especially, we come to know that the imports of Pakistan were always greater than its imports, but the ratio of trade balance shows that it is going towards negative side, just before the liberalization of trade Pakistan had very high trade balance.

If there is liberalization of trade, there will more deficit in foreign trade becausebefore liberalization Pakistan local industry was unable to cover the import/export deficitand if there is free trade there will be more losses.

3.6 New trade liberalization polices adopted by Pakistan (Current Issues):

Now considering Pakistan's current agreements on free trade we come to know that the Pakistan has just signed (November 2006) free trade agreement with China. China being a friendly neighbor is always very supportive to Pakistan especially in economic field. China is also going to open its first ever economic zone (Outside China) in Pakistan which is an example of corporation in trade between developing countries.

On the other hand India is asking Pakistani government to award it as a most favored nation status for trade. Pakistani government has liberalized trade to some extent and has removed duties and lifted ban on some of daily household (almost 150 products) use products (2005 -06). So Pakistani

government is not allowing complete free trade with India because if Pakistani government does so then their will be bombardment of Indian made products which are low in price as compared to products which are manufactured in Pakistan. This will cause the local producers to suffer a lot. Pakistani government has to decide at what level, when and how much liberalized trade with India.

4. Conclusion and Recommendations:

Free trade no doubt, increases the size of the pie but the distribution of enlarged pie is uneven with bigger and relatively more advanced countries getting the lion's share. Hence no surprisingly in the wake of liberalization bigger or relatively more advanced developing countries have performed far better than smaller or less advanced developing countries.

Developed countries have moved towards service based economy and their growth have showed, the demand for primary commodities has fallen.

So developing countries have moved towards the production of value-added exports and these exports have increased.

Even in case of South-South trade beneficiary are again bigger and relatively advanced economies. Two types of developing countries arc beneficiaries of trade liberalization:

 China and India competitiveness is based on price. Enjoying economies of large-scale. Korea and Singapore are beneficiaries because their exports are high tech value-added products.

Complementary measures must be taken, such as Improvement in the quality of education.Investment in rural roads and other infrastructure. Support for agricultural research and extension. Creation of effective social safety nets for poor.

Developing country like Pakistan must liberalize to make WTO regime for PROPOOR, Press must be allowed to overview the hearing of different disputes among the member countries. Make WTO more democratic. More authority must be given to developing countries to participate in different functioning of WTO.

It needs the policy space of Pakistan (developing countries) to decide What, When and How much to liberalize.

In order to make WTO regime more PRO POOR Pakistan need to explore non-traditional market like that of Latin America and South Africa.