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Trade

Nepal: How a 21st century trade policy framework could boost exports, jobs and economic growth

Cecile Fruman's picture
Equipped with unique tourist destinations, a strong national brand, and favorable trade positions with developed countries, Nepal is a country full of untapped potential. But several obstacles are holding it back from being a modern and globally connected economy. Some of these are unavoidable, such as its remote and landlocked location. But others, including outdated and restrictive trade and investment policies, lack of sufficient infrastructure, and a low capacity for adhering to quality standards for exports, could be resolved with a more modern trade framework.

From local to global ambitions: the benefits of standards compliance

Karuna Ramakrishnan's picture
Standards are a critical element of the trade landscape. Standards are regulations set by either public or private bodies (including firms) to ensure that products are fit for consumption, that they meet specific technical standards, or that they can be used as inputs for specific commercial processes such as manufacturing. Developing countries are often hampered by a lack of access to independent and credible inspection, testing, certification and accreditation services – what can be termed the “standards infrastructure." 
 

Three Key Ideas for Creating Effective Investment Policies

Roberto Echandi's picture
Attracting, promoting and retaining foreign investment is a complicated matter – especially for a developing economy. Evidence shows a compelling case for foreign direct investment (FDI): foreign investors can create jobs, bring capital and technologies, create knowledge spillovers, help local companies integrate with global value chains, and drive economic growth in general.

Is the (Developing) World Ready for the New Container Weight Regulations?

Perikilis Saragiotis's picture
A major change in the way containers’ weight is measured and certified, is fast approaching. As of July 1, 2016, all shipping containers will be required to verify their gross mass before they can be loaded onto a vessel. Previously, shippers could accept weight estimates, but now shippers are responsible for weighing cargo, prior to loading.

World Bank Economists reveal silver lining to the recent trade slowdown

Elena Gex's picture

Three World Bank Group Economists published a new blog post, This trade slowdown has a silver lining, that looks at the reasons for the 2015 global trade slowdown – cyclical factors and emerging economies – and what good we can expect to come out of it in 2016 and beyond. Using current World Bank Group data and facts, the piece from experts who work on trade every day offers a fresh perspective in a light-hearted manner on global trade and its future.

Streamlining Lao PDR’s trade regulations to help its poorest citizens

Jose Daniel Reyes's picture
Laos customs office


Economic growth and global economic integration go hand-in-hand for Lao PDR.  As a small, land-locked, and commodity-dependent country in a fast-expanding region, Lao PDR’s growth prospects are directly linked to its ability to integrate with the global economy. This is why the government has been prioritizing economic integration with both the Southeast Asia region and the multilateral rules-based trading system. In 2010, Lao PDR became signatory to the ASEAN Trade in Goods Agreement (ATIGA), acceded to the World Trade Organization (WTO) in 2013, and ratified the Trade Facilitation Agreement in 2015.

However, efforts to modernize Lao PDR’s regulatory framework governing trade and the overall investment climate have not been matched with welfare improvements. In a recent study, we provide a comparative overview of the landscape of Non-Tariff Measures (NTMs) affecting imports in Lao PDR, and identify lingering regulatory hurdles that hamper its ability to reap the gains of deeper integration with the global economy. Our findings reveal that while the existing NTM framework is broadly in line with regional practices (figure 1), the current import licensing scheme in Lao PDR and the associated array of fees linked to it raises the time and cost to bring products to market.Ultimately, the system of quantitative controls applied by Lao PDR is equivalent to an ad-valorem tariff of 5.4%, which is well above regional and world averages.

There are three main problems associated with the procedures for obtaining import licenses in Lao PDR:

Going beyond goods: Measuring services for export competiveness

Claire H. Hollweg's picture

The simplest way to think about international trade is the transfer of goods – cars, clothing, bananas. Countries that export more goods are generally better off, because they’re earning money, which allows them to import and build their economies in the process. But services are also vital to exports. In fact, services play a dual role in building an economy’s export competitiveness.

For one, services matter for manufacturing and agriculture exports. Take tee-shirts for example. Sure, they’re made of cotton, but they’re also the result of many service industries. This can include transporting cloth to the factory, tee-shirt design, testing to ensure quality standards are met, and branding and marketing for sale on international markets. All are part of the tee-shirt exporting process. [1]

The second role services play in export competitiveness involves diversification. With cost reductions and technological progress, services have become more tradeable. Exporting services provides an opportunity for export diversification and growth, which is important for economic stability. If global demand for one sector drops, a country with diversified exports can rely on others such as banking, transport, or business services.

Many governments are interested in how services support their country’s exports and economy at large. For example, how much value added do services exports, such as transport or communications, generate in a country? And how much of that is generated directly versus indirectly as inputs like transportation in our tee-shirt example? What types of services inputs, and is that different from comparator countries?

Answers to such questions are typically left unanswered because systematic data is not readily available on how services contribute to exports across developing countries and sectors.

The Export of Value Added (EVA) Database was developed to fulfill this need. The database was recently launched on the World Bank Group’s World Integrated Trade Solutions (WITS) data website. It includes data for user-specific queries and also has data for bulk download.

The EVA Database measures the domestic value added contained in exports for about 120 economies across 27 sectors, including nine commercial services sectors, three primary sectors, and 14 manufacturing sectors. The data spans intermittent years between 1997 and 2011.

What sets the EVA Database apart is the wide coverage of developing countries: over 70 of the economies included are low- and middle-income.

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