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Trade

Leave Export Promotion to Goldilocks

Ana Fernandes's picture

The successful WTO Ministerial at Bali has placed trade facilitation in the spotlight, but it is export promotion that takes pride of place in most national trade policy agendas. Sometimes export promotion seems a virtuous exercise, targeting small firms most in need of help.  The US Government’s efforts through its Small Business Administration or under the National Export Initiative are an example.  At other times, it seems cold-bloodedly pragmatic, geared towards large firms most able to use assistance.  Examples are government support for national champions from Brazil to South Korea.

An EU-US trade pact: Good or bad for developing countries?

Aaditya Mattoo's picture

For a world weary of waiting for the WTO’s Doha trade round to conclude, even a bilateral trade initiative may seem like a boon, especially when “bilateral” covers half of the world’s economy. But there is a serious downside:  the deal could hurt developing-country exporters unless the EU and US make a special effort to protect their interests. 

The feature of the proposed pact that elicits the most excitement – its focus on regulatory barriers like mandatory product standards – should actually incite the greatest concern. Given low tariffs in the EU and the US – less than 5%, on average – further preferential reductions will not seriously handicap outsiders. But, when it comes to standards – such as those governing safety, health, and the environment – the market-access requirements are brutal and binary: either you meet the established standard or you do not sell.

Bali Holds the Key to Progress on International Trade

John Wilson's picture

Bali, Indonesia has become the epicenter of critical new action on international trade. Between now and the end of 2013, the resort island in the Pacific will host two major international meetings where the focus will be on thinking differently about how the international community approaches trade policy.  The focus, as our World Bank colleagues have urged in the past,  will be on trade along global supply chains.

In December, the 9th WTO Ministerial Conference will convene in Bali.  Expectations run high for a new agreement on trade facilitation.  This agreement would concentrate not on traditional tariff barriers to trade, but rather on issues that have a particularly strong impact on supply chain performance – issues like customs modernization, streamlining import and export procedures, and regulatory transparency.  Addressing these issues can dramatically reduce the costs associated with trade in goods and services and boost international trade.  In fact, our World Bank research  shows tremendous potential returns on aid to trade facilitation – returns of $697 in increased trade for every $1 of aid to trade policy and regulatory reform.

Developing Countries, Trade Openness and Growth

Merrell Tuck-Primdahl's picture

Debates over the relationship between trade openness and growth have been going on for around 160 years. A key aspect of that debate is how important growth is for poor countries as they strive to catch up with the best-of-the best in a competitive world. For openness to succeed, you must first put in place ports, roads and other building blocks for prosperity, and you need well functioning bureaucracy to help build the foundation for a strong trade sector. Passionate free-trader Arvind Panagariya, Columbia University Economics Professor and Jagdish Bhagwati Professor of Indian Political Economy, spoke eloquently about this at his February 16 Development Economics (DEC) Lecture at the World Bank. His research has entailed cross-country case studies of what he terms ‘debacles’ and ‘successes’ in Asia, Africa and beyond. On the one hand, Panagariya admitted that free trade is no panacea to overcome stagnation and he acknowledged that trade liberalization has failed to catalyze and sustain growth in many instances. On the other, he argued that there are many more examples of countries failing to stimulate growth through protectionism.  Panagariya expressed skepticism about industrial policy, but cautioned that its presence cannot prove either the beneficial or harmful impact of openness on growth. You can watch the interview with Professor Panagariya here.

A role for the G20 in aid for trade?

John Wilson's picture
Port of Rades, Tunisia. Photo: © Dana Smillie / World Bank

As the G20 looks to establish itself as a permanent fixture in the multilateral policy dialogue, it should consider the global aid-for-trade agenda a top priority. The Summit in Seoul next month presents a unique opportunity to take concrete action in new directions on aid for trade.

The G20 originated – in part – as a global financial crisis management forum, and expanded out of the G8, in the wake of the 2008 world economic crisis. The Group has gained momentum and is solidifying its unique position as the most influential decision making group on global economic stability and growth. As it looks to solidify its transition as a global “steering committee” to sustain sound global growth what better policy issue to champion than one that is high profile, critical to both developed and developing countries, and in need of more effective global coordination -- than aid for trade?