Development and building trade capacity
The Role of Trade in Ending Poverty
The Role of Trade in Ending Poverty looks at the complex relationships between economic growth poverty reduction and trade and examines the challenges that poor people face in benefiting from trade opportunities. Written jointly by the World Bank Group and the WTO the publication examines how trade could make a greater contribution to ending poverty by increasing efforts to lower trade costs improve the enabling environment implement trade policy in conjunction with other areas of policy better manage risks faced by the poor and improve data used for policy-making.
Training and Technical Assistance
Over 14700 participants from developing countries benefited from WTO training courses and distance learning programmes in 2014. This training has been instrumental in helping government officials gain a greater understanding of the multilateral trading system and in helping developing countries tackle the challenges of being a WTO member enforce their rights and meet their obligations.
Infrastructure Provision and Africa’s Trade and Development Prospects
Transitioning from the post-2008 financial meltdown to a sustained period of global growth and prosperity involves a major challenge: how to ensure the effective management of international economic interdependence. Trade growth good governance and sustainable development constitute essential ingredients to any solution as is a fairer distribution of the gains of trade. Two issues stand out in this conversation. The first concerns the unfinished business of the global fight against the scourge of poverty which impacts one region more than most: Africa. At the same time a key pre-requisite for economic performance - affordable and efficient public infrastructure and services – remains lacking in this region – notably in Sub-Saharan Africa. To address this the region itself has initiated a major long-term continent-wide infrastructure development programme which is intended to fix this problem sustainably - namely the Programme for Infrastructure Development in Africa (PIDA). Its success foreshadows an economic transformation that will potentially usher in an emergent Africa in the 21st century. Secondly in one area of economic activity – trade in government procurement markets - the revised WTO Agreement on Government Procurement (GPA) is emerging as a multi-dimensional tool of trade governance and development. The thesis of this paper is that GPA participation by African countries - a prospect which to date they have declined to take up - holds strong potential to reinforce the positive effects of PIDA and to contribute to the region's growth and development more generally. Developing this thesis the paper examines the possible application of the GPA to support Africa's infrastructure programme drawing on its three dimensions of instrument of governance market access instrument and 'policy space' instrument in support of the development financial and trade needs of developing countries. Based on the analysis the paper concludes that the potential benefits outweigh the potential costs of participation in the GPA by African countries and accordingly that the GPA merits consideration by the region in this regard. A successful implementation of the infrastructure programme also portends a significant expansion in the size of the African government procurement market. Were African countries to accede to the Agreement in this context it would constitute not only a big rise in membership numbers but also a significant expansion in the value of market access under the Agreement. The broad outlines of a potential win-win scenario for both African countries and GPA Parties thus begin to emerge. The paper nonetheless acknowledges that delivering these benefits would involve significant practical and political challenges. It concludes that if the challenges can be overcome and the mutual benefits delivered the revised GPA would have been demonstrated as an effective tool for balancing flexibility and reciprocity in the government procurement sector consistent with sustainable development principles with the capability to deliver win-win benefits for a broad range of stakeholders in the post-2015 era.
Achieving Bangladesh’s Tourism Potential
Bangladesh's international image is not as a popular tourism destination and many people might be surprised to learn it has three World Heritage sites including the Sundarbans tiger reserves. Moreover it is part of important travel circuits for cultural and religious tourism and has demonstrated potential for sports tourism. The objective of this working paper is to critically test the assertion that pro-poor "green" tourism is one of the best development options for the majority of least developed countries (LDCs) -- a challenging task in Bangladesh in the face of the country's success as an exporter of readymade garments -- by comparing tourism to the available alternatives with regard to the crucial government priorities of export diversification employment generation and the "green economy". It is well-known that Bangladesh is under strong pressure to diversify its exports to generate new employment (especially in rural areas) and to respond to critical environmental issues. The government has identified over 30 "thrust sectors" (including tourism) to help address these challenges but otherwise tourism is rarely mentioned as a major trade and development option for Bangladesh. Within the limitations of data availability this working paper reaches the conclusion that greater efforts to develop "green" tourism would be highly beneficial for facilitating rural development environmental and cultural protection gender equality and export diversification in services. The most obvious current impediments are inadequate infrastructure lack of investment and (typically election year) political conflict but behind these factors appear to be a serious lack of stakeholder coordination insufficient regulatory and administrative transparency and coherence as well as some government reluctance to relinquish greater commercial autonomy in tourism to the private sector. This paper offers extensive analysis and some suggestions to help address the impediments including the recommendation to create a Bangladesh Tourism Stakeholders Forum.
Executive Summary
The World Trade Report 2014 examines four trends that have characterized the last decade: (i) the rise of the developing world (ii) the expansion of global value chains (iii) the increase in prices of commodities and the growing importance of commodity exports and (iv) the increasingly global nature of macroeconomic shocks. In analysing these trends the report explores how they have reshaped the role that trade plays in facilitating development while highlighting remaining impediments for the expansion of global development. Building on this analysis the report illustrates how the WTO system’s features have helped underpin the recent development gains of many developing countries by allowing them to adapt to take advantage of and mitigate risks arising from the four trends.
The WTO and developing countries
This section discusses a number of the WTO’s features which help underpin development and explain their economic rationale. It is divided into four subsections. The first one illustrates how the WTO has been useful in helping developing countries take advantage of and manage the challenges arising from the four trends portrayed in the previous sections. The second subsection discusses from an economic perspective the role that commitments and flexibilities in trade agreements play for development. Economic literature supports the view that WTO rules and disciplines promote growth by providing the predictable environment that businesses require to flourish. At the same time it justifies the existence of WTO flexibilities including through special and differential (S&D) treatment on the basis of market failures and the different ability of WTO members to implement obligations. The third subsection describes the specific rules and disciplines that specifically apply to developing countries. The final subsection illustrates the institutional features particularly relevant for developing country members.
Increased synchronization and globalization of macroeconomic shocks
This section describes the increased synchronization and spread of macroeconomic shocks in the last few years after what appeared to be a general moderation of volatility. It examines the role of global value chains in the transmission of macroeconomic shocks and looks at how export structures influence volatility. It describes how the economic crisis spread from developed to developing countries and how a coordinated response helped to limit the use of protectionist measures in the wake of the crisis. Despite suffering the greatest economic downturn since the 1930s the world did not see a widespread resort to protectionism. Among other explanations for this was the existence of a set of multilateral trade rules.
A new role for commodities in development strategies
This section discusses the challenges and opportunities of commodity-based growth and development strategies in relatively high but volatile pricing environments. It first provides an overview of historical price developments in agriculture and natural resources. It then goes on to analyse how developing countries have been able to leverage agricultural and natural resource export potential in this high-price environment to underpin their development. The section highlights which policies have been useful but also pinpoints remaining challenges in realizing this export potential. Finally it also considers those challenges arising from heightened volatility with a particular focus on food importers and natural resource exporters vulnerable to boom-bust cycles.
Conclusions
The very first World Trade Report published in 2003 focused on trade and development. Exploring the economic link between these two areas it examined how the Doha Round – which had been launched just two years earlier – could foster development.
The world economy and trade in 2013 and early 2014
Growth in world merchandise trade remained subdued in 2013 at 2.2 per cent nearly identical to the previous year’s increase of 2.3 per cent. The increases in both 2012 and 2013 were less than the 20-year average of 5.3 per cent in 1993–2013 and were also well below the 6.0 per cent average for the 20 years preceding the 2008–09 crisis. The volume of world merchandise trade continued to climb slowly in the opening months of 2014 with an increase of 2.1 per cent in the first quarter compared with the same period in 2013. The increase for the year as a whole is expected to be greater than in 2013 as the global economy picks up momentum.
Foreword by the WTO Director-General
Since the start of the millennium we have seen strong evidence of how trade as a critical component of economic growth and development can make a positive difference in people’s lives. Rapid economic growth in many developing economies over this period has been combined with deeper integration into the global trading system. This experience has highlighted the role that trade can play in boosting per capita incomes helping developing countries to achieve wider societal goals and in improving access to advanced technologies and knowledge thereby setting the stage for future growth.
The increasing importance of developing countries in the global economy
One of the most striking features of the global economy in recent years has been the increasingly large role played by developing economies. This section examines how many countries recorded impressive growth in the last decade while making great strides in reducing poverty. Some have become leading producers and exporters of manufactured goods agricultural products and commercial services in some cases eclipsing the industrialized economies. This is especially true of the large developing economies which have taken on more prominent positions in international fora such as the G-20.
Introduction
Globalization is transforming development. This section examines how in its scope and speed the recent rise of the developing world is unprecedented – eclipsing the rise of the newly industrializing countries after the Second World War and dwarfing the earlier rise of Europe and North America in the late 19th century. There are many reasons why the developing world has achieved economic lift-off. One of the most important is its integration into the world economy – and the new access to markets technology and investment that has resulted. This rise of the developing world is one of four recent trends that holds new development opportunities while also bringing new challenges. The same is true for three other trends identified here: the spread of production chains high commodity prices and growing economic interdependence.
World Trade Report 2014
The World Trade Report 2014 looks at how four recent major economic trends have changed how developing countries can use trade to facilitate development: the economic rise of developing economies the growing integration of global production through supply chains the higher prices for agricultural goods and natural resources and the increasing interdependence of the world economy. It also looks into what role the WTO can play.
The rise of global value chains
Fragmentation of global production is not a new phenomenon but its importance has been growing over time. This trend has resulted from technological innovations in communication and transportation which have lowered coordination costs allowing countries to specialize in production of specific tasks or components rather than entire final products. This section looks at how the nature scale and scope of global value chains (GVCs) have changed dramatically during the last two decades. It examines how GVCs can offer developing countries opportunities to integrate into the world economy at lower costs but highlights that gains from GVC integration are not automatic. It considers the risks posed by GVC participation and how various policies are correlated with countries’ participation in GVCs.
The Role of Trade-Led Economic Growth in Fostering Development
The United Nations' post--2015- development agenda is taking shape. Like its predecessor the Millennium Development Goals the post--2015- agenda will reshape development policy priorities for governments and non-governmental actors alike in many cases galvanising new attention thinking and financing to tackle the priorities it identifies. This essay reviews the historical and ongoing role played by trade in sustained high growth and human development progress and makes the case that the post--2015- development agenda should include considerations related to trade rules and supply-side capacity. Given the strong links between trade-led growth economic upgrading and poverty reduction the paper argues that trade led economic growth must be prioritised in the post--2015- development agenda.
Thoughts on How Trade, and WTO Rules, Can Contribute to the Post-2015 Development Agenda
In September 2015 Heads of State and Government will gather in New York to agree the post-2015 development agenda. The role that trade will play in this agenda is neither clear nor agreed. Yet an open non-discriminatory rules-based multilateral trading system underpins sustainable development - a concept that lies at the core of much of the post-2015 debate to date. Indeed sustainable development is recognized as an objective in the Marrakesh Agreement Establishing the World Trade Organization (WTO). With the aim of stimulating discussion this paper asks the question of how trade and WTO rules can contribute to the post-2015 development agenda? In reply the author offers some thoughts on 10 contributions that trade and WTO rules can make to the post 2015 development agenda. The list is indicative not exhaustive. The 10 contributions highlight the complex way in which trade and trade policy interact with the evolving debate on the post-2015 development agenda - a debate which encompasses issues ranging from poverty eradication inclusive growth climate change mitigation decent work food security access to health services and sustainable development financing to name but a few of the topics under consideration. The paper organizes the 10 indicative contributions around three headings: trade rules as part of the enabling environment for the achievement of the post-2015 development agenda; the role that trade and trade policy can play in meeting specific goals (including possible Sustainable Development Goals); and the contribution that Aid for Trade can make.
Aid for Trade and building trade capacity: The case of Morocco
The aim of this chapter is to examine the broad framework which has been evolved for the reception of Aid for Trade (AFT) in Namibia. The economic situation before this period included the prevalence of poverty the HIV/AIDS pandemic low educational opportunities and a very highly skewed or unequal distribution of the wealth of the country which has increased income inequalities and unsustainable economic growth as outlined in Namibia Vision 2030 (Namibia Office of the President 2004). In this regard Namibia shares this economic dependency at the regional level and most trade and economic relationships are mainly with Botswana Lesotho Swaziland and South Africa all of which are members of the Southern African Customs Union (SACU) and Southern African Development Community (SADC). The objective is to create a free trade area in the Southern Africa region.