Let's Talk Development
Syndicate content

Trade

Does the WTO have any effect over trade policy, especially for emerging economies?

Chad P Bown's picture

The Great Recession has brought renewed interest to the question of how trade policy responds to economic shocks, especially in the face of trade agreements like the WTO. New research that examines new import restrictions through the lens of a particularly important class of trade policies – the temporary trade barriers (TTBs) of antidumping, safeguards, and countervailing duties - finds that emerging-economy trade policy has become more responsive to economic shocks under the WTO. The integration of emerging economies into the multilateral trading system since the 1980s – resulting in lower applied border tariffs and some binding WTO tariff commitments – has resulted in a heightened responsiveness of these other trade policies to economic shocks. In a number of ways, business cycles and real exchange rate movements, for example, affect application of new import restrictions by emerging economies much like they do for high-income economies.

Service with a smile: A new growth engine for poor countries

Ejaz Ghani's picture

This post was originally published in Voxeu.org.

Services have long been the main source of growth in rich countries. We argue that services are now the main source of growth in poor countries as well. We present evidence that services may provide the easiest and fastest route out of poverty for many poor countries.

For more than 200 years, it was argued that economic development and growth was associated with growth of the labour-intensive manufacturing sector (Baumol 1967, Kaldor 1966, UNIDO 2009). Services were considered as menial, low-skilled, and low-innovation (McCredie and Bubner 2010). But today, services can be among the most dynamic sectors in an economy. The policy question is whether this is true even in poor countries.

New Database Reveals Global Pattern of Services Trade Restrictions

Aaditya Mattoo's picture

Some of the fastest-growing countries in Asia and the oil-rich Gulf states have the most restrictive policies in the services trade, while some of the poorest countries in the world, such as Rwanda and Senegal, are remarkably open in the area.  These patterns emerge from a new Services Trade Restrictions Database created by staff in the Trade and International Integration Team of the Development Economics Research Group.

Across sectors, transportation and professional services, such as accounting and law, are among the most protected in developed and developing countries alike. Meanwhile, retail, telecommunications and finance, such as banking and insurance, tend to be more open.

Cutting Trade Costs to Kick-Start Growth

John Wilson's picture

The ongoing turmoil in Europe with the euro and sluggish global economic recovery has important implications for growth and trade in developing countries. A World Bank report released recently suggests that as a result of instability in advanced economies, developing country growth will slow to a relatively weak 5.3 percent in 2012. In a speech recently, WTO Secretary General Pascal Lamy described the rise in trade protection as alarming. Restrictive measures put in place since the global economic crisis in 2008 amounts to 3% of world merchandise trade, and almost 4% of G-20 trade. They have remained unabated over the past seven months.

Given economic slowdown in developing countries and an increase in restrictions on trade, what policy steps can the global community take to ensure trade remains a source of jobs and growth? 

How did US and EU trade policy withstand the Great Recession?

Chad P Bown's picture

Many feared a return of 1930s-style protectionism when recession hit the global economy. But many countries avoided this. In a blog post, co-authored with Meredith Crowley, I focus on US and EU trade policy and discuss how this policy withstood the ‘Great Recession.’ The following is an excerpt from the post which appeared on Vox.

“During the Great Recession, import protection increased around the world (Evenett, 2011). Popular policies included antidumping tariffs, safeguards, and other temporary trade barriers (Bown 2011a,b). Despite this, for high-income economies such as the US and EU, such trade barriers increased much less than initially feared. In this column, we ask how and why.

Are the Knowledge Bank’s staff under-specialized?

Adam Wagstaff's picture

Ideas often come from unexpected quarters. Last week, Ricardo Hausmann came to the World Bank to talk about his work on economic complexity. I missed the seminar, but afterwards read his Atlas of Economic Complexity: Mapping Paths to Prosperity. (I had actually already looked at the stunning – but rather confusing charts – of his coauthor Cesar Hidalgo after reading Tim Harford’s great new book Adapt: Why Success Always Starts with Failure.)

On the face of it, the Atlas of Economic Complexity doesn’t have a lot to do with the topic of this blog post – whether World Bank staff are under-specialized.  But bear with me, and I hope I’ll convince you otherwise.

Is 2012 Africa’s Year of the Dragon?

John Wilson's picture

At the 2012 World Economic Forum’s Annual Meeting in Davos last week, a record 2,600 global leaders discussed a frenetic mix of economic and social issues facing the global community. A number of panels (some of which were overlooked with all the talk of the unfolding Eurocrisis) focused on the important transition Africa is making from an underdeveloped continent to one characterized by sustained growth -- backed by strong trade and investment flows. 

Leaders discussed the need for greater market integration to increase intra-African trade and better cooperation on infrastructure to facilitate investment and trade. Alpha Condé, President of Guinea, called for the establishment of Pan-African ministries to drive greater integration and coordination on the continent. “At the next African union meeting, we must consider establishing three of four ministers for all of Africa,” he said. “These new posts should at least cover energy, infrastructure, and trade in Africa.”

The Nuts and Bolts of Trade: Stepping up to Manufacturing in the Development Ladder

John Wilson's picture

With the global recovery slow to pick up speed, the latest World Economic Outlook (WEO) isn’t exactly an uplifting read. However, for those of us with an eye on the developing world there are some bright spots: the low-income-countries (LICs) in Africa, for example, have returned to their pre-crisis growth rates and their economies are expected to expand by a respectable 6.5 percent in 2012. 

Despite this seemingly good news, there are some dark clouds on the horizon. The WEO attributes the quick rebound to the fact that the African LICs were, “largely shielded from the global financial crisis owing to their limited integration into global manufacturing and financial networks.”  Although limited international exposure is a boon in the short-term, it also signals trouble down the road.

On Aid and Growth – reflections ahead of Busan

Finn Tarp's picture

Not a month goes by without some sort of bad news about foreign aid. Examples of incompetence , abuse of funds by corrupt leaders, and distorted incentives abound. These stories fuel a deep skepticism of foreign aid. In this view, perverse effects dominate – and end up weakening, rather than encouraging, growth and development. If one accepts this view, then it is logical to turn off the poisoned tap of foreign aid. But are such views well founded?

The answer is no.

Aid for Trade in a World of Shifting Tectonic Plates

John Wilson's picture

Last week, President Zoellick gave a speech at George Washington University in which he outlined his vision of how the aid agenda should adapt to what he described as “shifting tectonic plates,” which has seen the world change dramatically since 1944 when the Bretton Woods system was established. This shift has created a world in which developing countries are now the drivers of the world economy while the developed world is facing severe economic headwinds.

In Zoellick’s vision of a “world beyond aid,” international assistance would be “integrated with—and connected to—global growth strategies, fundamentally driven by investment and entrepreneurship. The goal would not be charity, but mutual interest in building more poles of growth.”

Pages