Let’s start with the basics. What is a trade tariff? It’s a customs duty, or tax, on imported merchandise. For example, if a store owner is importing shoes, a tariff collected by her government might add to the price she has to pay for them. There has been a global effort to reduce tariffs around the world because they make goods more expensive for firms and consumers alike. Lowering tariffs was a major objective of the Uruguay round of negotiations at the World Trade Organization. But in certain circumstances, some governments consider tariffs helpful as a policy tool – they raise revenues and protect local industry from foreign competition (in the shoe example, a locally produced shoe might be cheaper than the imported one with a tariff).
While we’ve used a simple example, tariffs can be quite complex. There are three main types of tariff and they can be queried in UNCTAD TRAINS available through World Integrated Trade Solution (WITS). The three types of tariff are Most Favored Nation (MFN), Preferential and Bound Tariff.
Editor's Note: "Notes From the Field" is an occasional feature where we let World Bank Group professionals conducting interesting trade-related projects around the globe explain some of the challenges and triumphs of their day-to-day work. The views expressed here are personal and should not be attributed to the World Bank Group. All interviews have been edited for clarity.
The interview below was conducted with Mariam Diop, a Senior Economist with the World Bank Group. Mariam is based in the country office in Ouagadougou, the capital of Burkina Faso, where she carries out work in the WBG’s new Macro and Fiscal Management Global Practice. Mariam has been deeply involved with the country’s Diagnostic Trade Integration Studies (DTIS), which has helped to identify a number of key restraints on economic growth and shared prosperity in Burkina Faso. The Trade Post spoke with Mariam about what brought her to the country, where she sees opportunities, and how the DTIS has helped on the ground.
It’s 38°C (99°F) in Ouagadougou, the capitol city of Burkina Faso, today—and it’s been this hot all week. The end of the warm season is near, but in places like Ouaga (pronounced WAH-ga, as its better known), temperatures stay high year-round. These are the African drylands: hot, arid, and vulnerable.
Over 40 percent of the African continent is classified as drylands, and it is home to over 325 million people. For millennia, the people of these regions have adapted to conditions of permanent water scarcity, erratic precipitation patterns, and the constant threat of drought. But while urban centers like Cairo and Johannesburg have managed to thrive under these harsh conditions, others have remained mired in low productivity and widespread poverty.
The World Bank has been partnering with a team of regional and international agencies to prepare a major study on policies, programs, and projects to reduce the vulnerability and enhance the resilience of populations living in drylands regions of Sub-Saharan Africa.
You can find it here.