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How can G20 trade policies benefit developing countries?

Michele Ruta's picture
Cambodia garment factory (Chhor Sokunthea / World Bank)


A key topic for the G20 this year is what can be done to boost inclusiveness in the global economy. Ministers and officials, with advice from the World Bank Group and others, have been looking into what policies they can adopt to maximize the development prospects of lower income countries outside the G20 (what the Turkish Presidency has termed “low-income developing countries” -LIDCs). A critical area of action is in trade – an area where G20 countries have asked the Bank Group to survey the current situation and provide recommendations.

In our work, we found that the value of LIDC imports and exports has increased substantially over the last decade, but it still represents only between 3 and 4% of world trade (Figure 1). The share of LIDC exports in the global services market is similarly low and has remained stagnant during the last 3 decades. Although there are some exceptions – Vietnam and the Philippines – LIDCs are poorly integrated into global value chains (GVCs) – they constitute only 3% of world imports in parts and components.

G20 countries are the main trading partners of LIDCs. Around 70% of imports of LIDCs come from the G20 and around 80% of LIDC exports are directed to the G20. Trade costs between LIDCs and any G20 country, however, are systematically higher than the trade costs between G20 countries or other non-LIDCs and any G20 country (Figure 2).


Naturally, many domestic factors that inhibit the productive capacity of LIDCs contribute to the low connectivity of LIDCs to GVCs and world trade more generally. However, trade policies of G20 members can help low-income developing countries integrate in the world economy. In our analysis for the G20 we reviewed key G20 trade policies and how they could be improved to benefit LIDCs.

Trade Regionalism in the Asia-Pacific: New Game, Old Rules?

Swarnim Wagle's picture

What's the next move in the major economies' Great Game? Source - wonderkris.Editor's Note: This blog draws on the forthcoming article “New Trade Regionalism in Asia: Looking Past the Sino-American Great Game," written by Swarnim Wagle, to be published in the Global Emerging Voices 2013 Working Papers. 
 
Negotiations over one of history’s most ambitious trade deals have taken another step towards defining the future of Trans-Pacific trade.
 
The latest round of discussions on the Trans-Pacific Partnership (TPP) wrapped up this past weekend in Salt Lake City, Utah. Negotiators are believed to have made headway on a number of thorny issues, clearing the way for ministerial talks to be held in Singapore, Dec. 7-10.   
 
The TPP will draw together 12 countries dotting the perimeter of the Pacific—Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. But it’s the United States’ efforts to spearhead the talks that have attracted the most attention. Concerns over a lack of transparency and the intrusive scope of the agreements’ provisions into national policymaking have led many to question its objective.