Edmund Burke in his essay ‘On American Taxation' wrote, “great trade will always be attended with considerable abuses.”

Such a statement may have been acceptable in 1775 when it was written, but over two centuries later it has now become a political imperative to construct a system and set of rules for global trade that will not only remove the abuses which continue to exist but also to provide opportunities for all countries to benefit from international trade.

Until recently the debate about what can be done to help developing countries has been dominated by questions about the level of aid and the issue of debt relief.

But there is now a growing recognition that trade has the potential to be far more significant. Take Africa as an example. If it were to increase its share of world exports by just 1 per cent it would generate 70 billion dollars. That's around five times more than the whole of Africa presently receives in international aid. Ironically, such an increase would simply provide Africa with the same share of world exports as it had at the time the colonial powers pulled out in the 1960's.

But the present system is loaded against developing countries worldwide. Import tariffs imposed by the rich developed world in order to protect their own markets cost the developing countries around 100 billion dollars a year.

This is exactly the type of abuse that Ministers meeting in Cancun will need to tackle. But in order to do so successfully they will need to give fresh consideration to the relationship between those international organisations established in the 1940s as a consequence of the Bretton Woods agreement – the I.M.F., the World Bank and the General Agreement on Tariffs and Trade which was to become the W.T.O.

Created in the immediate aftermath of the Second World War and with the Cold War looming we need to give thought to the role we now expect these bodies to perform and how they can act in a globally responsible way by providing support for developing countries in a way which is sustainable whilst at the same time retaining the backing of countries in the developed world.

If the W.T.O. is to play a key role in supporting development and reducing world poverty then the agreements it enters into must allow developing countries to operate in a flexible manner and in a way which allows them to actively support the growth of domestic industry, to provide a breathing space to allow diversification of the economy to take place and to invest in education and training. All steps that are necessary in order to generate sufficient wealth to lift people out of poverty.

It is also a recognition that unfettered global markets and a rapid introduction of full trade liberalisation will often end up benefiting those who are already rich and powerful. They are in a position to exploit the new opportunities provided to the full. For weak and vulnerable countries it can be destabilising, disruptive and damaging – not just to individual sectors but to the economy as a whole.

To take just two examples – in Zambia restrictions on imports and exports were removed between 1992-97 with at the same time the maximum tariff that could be imposed being cut from 100 per cent to 25 per cent. As a consequence manufactured goods flooded into the country from abroad with manufacturing employment falling by 40 per cent.

In Ghana after extensive trade liberalisation in 1987 industry was badly affected by cheap imports and due to lack of investment was unable to compete. Because of the speed at which the changes were introduced, there wasn't the time to diversify into new areas where they would have a comparative advantage.

Developing countries which have successfully expanded their economies and reduced poverty are those that have been prepared to intervene and manage the process of change that flows from the opening up of their markets.

This has not been intervention for the sake of it or to prop up enterprises which are inefficient. Instead it has been the putting in place of transitional measures which are time limited but provide a period during which industries can gain strength from investment or give communities the opportunity to diversify into new areas. The objective being to achieve open markets at a future date when sectors are able to compete on equal terms in the global marketplace without the need for continued protection.

Taiwan and South Korea are often cited as examples of the benefits of trade liberalisation. In fact they developed their international trading strength on the back of government subsidies and strategic investment in both infrastructure and skills whilst at the same time putting in place short term measures to protect vulnerable sectors from competition by overseas firms.

In more recent years countries as diverse as China, India, Mozambique and Vietnam have been able to reduce levels of poverty by increasing economic growth. They have achieved this with high levels of intervention in order to strengthen domestic sectors whilst beginning the process of opening them up to competition from foreign firms.

The experience of countries over recent years poses a dilemma for the Bretton Woods institutions. If the W.T.O. wishes to see a trade round of negotiations aimed at securing real improvements for the poorest nations then it will need to be prepared to support a managed approach to trade liberalisation.

Such an approach would run counter to the prevailing orthodoxy at the World Bank and I.M.F. where full blown trade liberalisation being introduced at the earliest opportunity is seen as the preferred way forward.

It is true to say that the World Bank is aware of the need to consult developing countries and preparing poverty reduction strategy papers may be a useful approach. But this will not be the case if they rely heavily on the perceived benefits that come from the rapid opening up of markets.

Increasingly the I.M.F. would appear to be introducing conditions into its agreements which directly relate to the trade policies being pursued by the country concerned.

These developments raise important questions about the respective roles and responsibilities of the W.T.O., World Bank and I.M.F.

If the W.T.O. is serious about this trade round being one which benefits developing countries then it needs to assert its authority over the I.M.F. and World Bank.

A protocol should be agreed which states that provided a country is operating within the rules laid down by the W.T.O. then any further trade conditions cannot be imposed by the I.M.F. or World Bank.

This would ensure that the structure for global trade is seen to be fair in that such a protocol would stop the development of a two tier approach in which the rich countries simply have to abide by the W.T.O. provisions whilst the poorest countries have the W.T.O. plus any conditions that are laid down by the I.M.F. or World Bank.

If no such protocol can be agreed then the authority of the W.T.O. will be seriously weakened. Under the September sun in Cancun it will be the responsibility of the trade Ministers to take the first steps towards achieving such a protocol and as a consequence assert the W.T.O.'s authority over trade matters.