WTO accessions
Trade Multilateralism in the 21st Century
Trade multilateralism in the twenty-first-century century faces a serious test as weakness in the global economy and fast-paced technological changes create a challenging environment for world trade. This book examines how an updated and robust, rules-based multilateral framework, anchored in the WTO, remains indispensable to maximizing the benefits of global economic integration and to reviving world trade. By examining recent accessions to the WTO, it reveals how the growing membership of the WTO has helped to support domestic reforms and to strengthen the rules-based framework of the WTO. It argues that the new realities of the twenty-first century require an upgrade to the architecture of the multilateral trading system. By erecting its 'upper floors' on the foundation of existing trade rules, the WTO can continue to adapt to a fast-changing environment and to maximize the benefits brought about by its ever-expanding membership.
Preferential Trade Agreements in Africa: Lessons from the Tripartite Free Trade Agreements and an African Continent-Wide FTA
Economic transformation is an important pre-requisite for African countries to maximize the benefits of globalization. The development outcomes of the transformation process are conditioned on the one hand by the level of inclusiveness and on the other by the sustainability of the development pathways, among other factors. Building on experiences since the new millennium, in which Africa has witnessed rapid and sustained high levels of economic growth, and informed by the policy discourse that accompanied the formulation of the Common African Position on Sustainable Development Goals, African countries have charted a transformation path in which they aspire to play to their comparative advantages.
WTO Accession Reforms and Competitiveness – Lessons for Africa
This chapter evaluates the impact on competitiveness of reforms undertaken by recently acceded countries and draws lessons for African countries pursuing the goal of becoming emerging economies. By comparing reform outcomes before and after accessions relative to control groups using the difference-in-difference evaluation method, the chapter concludes that the recently acceded members improved their international competitiveness, although the overall impact was relatively small and differed substantially across economies, economic sectors and time. African economies aspiring to become emerging economies could build on the experience of recently acceded countries by designing long-term reform agendas similar to the accession reform packages, locking them into a credible policy framework through a series of domestic and international agreements, frontloading reforms to gain credibility and persisting in their implementation, balancing short-term costs with long-term benefits and learning from Article XII peers who have gained substantial experience in managing complex reforms.
African Perspectives on Trade and the WTO
Twenty-first century Africa is in a process of economic transformation, but challenges remain in areas such as structural reform, governance, commodity pricing and geopolitics. This book looks into key questions facing the continent, such as how Africa can achieve deeper integration into the rules-based multilateral trading system and the global economy. It provides a range of perspectives on the future of the multilateral trading system and Africa’s participation in global trade. It also underlines the supportive roles that can be played by multilateral and regional institutions during such a rapid and uncertain transition.
Introduction and Overview
This volume, the work of more than twenty authors, grew out of the Fourth China Round Table and the WTO’s Tenth Ministerial Conference, two seminal events held back-to-back in Nairobi, Kenya, in December 2015. The work presented here provides comprehensive, substantive insights of the African trade policy and development context in which these two meetings took place.
Economic Diversification in Africa’s Number One Economy
Nigeria is the largest economy in Africa, with a GDP in excess of US$ 500 billion, dependent on oil and gas exports for the bulk of government revenues as well as foreign exchange. Its growth – which averaged about 7 per cent in the decade between 2005 and 2014 – has in recent years been driven by the non-oil sectors: services, agriculture and manufacturing. The principal challenge for the President Buhari administration, which took office in May 2015, is to build on this trend, by diversifying export income and the sources of government revenues, as well as kickstarting the long-overdue task of industrializing the Nigerian economy. One of the goals of this approach is to achieve robust, stable and predictable growth, free from short-to-medium-term cycles of boom and bust.
Deepening African Integration: Intra-African Trade for Development and Poverty Reduction
The obstacles to deeper African integration are great, but the potential gains for development and poverty reduction warrant a sustained effort to overcome these challenges. High trade barriers between countries have been reflected in trade that is more oriented toward distant markets than neighbouring African countries – it is often easier for Africans to trade with the rest of the world than with each other. The potential exists for greater intra-African trade in ways that would have significant, positive impacts on the lives of millions living in poverty. Barriers to intra-regional trade need to be tackled, along with complementary efforts to ensure that the poorest people can access the opportunities created. The World Bank Group is working in a number of different areas to support this effort and is ready to do more.
African Trade Integration and International Production Networks
African trade is heavily concentrated in agricultural and natural resourcebased commodities, sectors that are highly embedded in international value chains. There has been significant trade dynamism in recent years, driven by greater participation by African firms and communities in value chains, especially in products like fresh produce and flowers. Much of this trade and production is for end markets in Europe, but there is also increasing trade of this type within Africa in some manufacturing sectors as well as within services such as tourism. Intra-regional trade remains well below potential, however, and the challenge to diversify trade and increase the value-added share of African trade continues to confront most African economies. There are improving prospects for this as a result of intra-African policy changes, ranging from a greater focus on trade facilitation to the ambition of creating a continental free trade area. A steep increase in supply chain trade in Africa is possible in coming decades if efforts continue to put in place a supporting policy environment. This must centre on substantially lowering trade costs for African firms by implementing trade facilitation measures, especially for intra-regional trade flows, and improving the productivity of transport, logistics and related services that determine the feasibility of efficiently operating regional value chains.
Rising Africa in World Trade? A Story of Traditional Commodities and New Products
International trade provides ample opportunities for the economic development of countries and regions. The fall in trade costs – communication and transportation costs, greater access to international capital markets, regional cooperation and, last but not least, the decrease in trade barriers – has supported global trade and output expansion over the last decades. Emerging opportunities and challenges resulting from technological, economic and political developments differ, however, from region to region. Historical experience shows that much of the progress in economic growth and development also depends on the readiness of local business and governments to rapidly adapt and seize opportunities.
Implementing Trade Facilitation Reform in Africa
Trade facilitation is central to Africa’s competitiveness in the global economy. Costs related to trade facilitation make up a significant proportion of overall trade-related costs, which in Africa are higher than in any other developing region. This acts as a barrier for the integration of African countries into global markets, as well as greater intra-African integration. Improving trade facilitation is essential for lowering costs for African agricultural producers as well as supporting the development of higher value-added activities in agribusiness, manufacturing, and services, including participation in regional and global value chains. Diagnostic tools used by the World Bank Group, such as the Logistics Performance Index, as well as country-specific diagnostics, highlight the key challenges faced. The evidence also shows that performance varies, with some countries making significant progress on reform programs to improve trade facilitation. With other developing regions having generally more advanced trade facilitation regimes, the lessons from these regions can be instructive in designing and implementing reforms in Africa, which the World Bank Group is actively supporting at the national and regional levels. A priority for the Bank Group is implementing trade facilitation programs that do more to reduce trade-related costs facing the extreme poor, given the concentration of extreme poverty in Africa.
Trade, Investment and Development
Structural transformation is imperative for Africa’s economies. An unprecedented policy unanimity has emerged amongst African government and business leaders that to achieve sustained growth and development, Africa must industrialize and secure a greater share of the benefits of its participation in global value chains. This requires further advances in a programme for ‘development integration’ that simultaneously combines market integration with purposeful industrial development intervention and cooperation to strengthen regional value chains, underpinned by efforts to develop and rehabilitate cross-border infrastructure for greater connectivity across Africa.
Driving Economic Growth through Trade Policy Reforms and Investment Attraction in the Open World Economy: The Experience of China
China achieved a great leap forward in its economic development in the last thirty years, supported by profound trade policy reforms, significant infrastructure investment and utilization of foreign capital, under the overarching state policy of reform and opening-up. Shares of manufactures and services in production have kept increasing, and remarkable export performance has been scored during this period. Additions of labour and capital, as well as competitive costs have largely shaped the economy’s comparative advantages up to now, and they are likely to be replaced by increasing domestic consumption, productivity growth and a greater reliance on services as the main factors sustaining future economic growth, albeit at a slower pace. Nonetheless, opening-up and domestic policy reforms, going hand-in-hand, will continue to play a critical role. The question that this paper addresses from China’s perspective may serve as a reference for the African economies seeking to establish a strong manufacturing base, and to realise economic take-off with the help of a clear opening-up strategy and a proper trade policy toolkit.
Trade Rules, Industrial Policy and Competitiveness: Implications for Africa’s Development
Industrialization is one of the cardinal priorities for economies in dynamic transformation from a commodity base to a diversified value-added development stage. In major African economies, as in other economies worldwide, industrial policy is resurgent and back at the centre of economic policy. The sectors in focus revolve around manufacturing, textiles and clothing, footwear, automobiles, infrastructure, information technology products, petrochemicals, aluminium smelting, agro- and cut flower industries. African economies actively applying industrial policy include Algeria, Egypt, Ethiopia, Kenya, Madagascar, Mozambique, Nigeria, Rwanda and South Africa.
From Marrakesh to Nairobi: Africa – A Force for the World Trading System: From the Past Twenty Years to the Next Twenty Years
Morocco’s membership of the GATT and WTO has been part of an overall strategy of the Government of the Kingdom of Morocco, at the instigation of the late King Hassan II, to introduce a package of institutional and socio-economic reforms, which sought mainly to modify and diversify the structure of the national economy, optimize the allocation of its resources and ensure its integration into the world economy. Being a Member of the Multilateral Trading System is also an expression of the government’s wish to integrate more fully into the world economy by anchoring its reforms in the legal primacy of an international agreement, rather than just in domestic legislation, as reaffirmed by the Constitution adopted in 2011. In doing so, Morocco made opening up its economy a firm and irreversible commitment.
Trade Policy Trends in Africa: Empirical Evidence from Twenty Years of WTO Trade Policy Reviews
Trade liberalization has been a key component of economic development and transformation in the global economy since the middle of the last century and is a leading force in fostering globalization and connectivity in the twenty-first century. Trade reform has been on the agenda of African economies, first under the IMF-supported structural adjustment programmes of the 1980s and the early 1990s, and subsequently pursued within the multilateral legal and policy framework of the WTO. Following two decades of rapid trade growth in Africa, the evidence suggests that significant barriers to trade remain within Africa, impeding its integration to regional and global value chains. Considerable scope exists for the use of trade policy to accelerate and deepen sustained economic development and transformation. African economies should embark on the next generation of trade and associated structural reforms more aggressively and ambitiously.
Integration into Global and Regional Value Chains – How Is It Done? The Experience of Lesotho in the Textiles and Apparel Sector
Lesotho is a landlocked, least-developed economy and a member of the Southern African Customs Union (SACU), the oldest customs union (CU) in the global economy. Forty per cent of the population lives under the poverty line. The economic base is narrow, reliant on the textiles and apparel industry (for 59 per cent of total exports), subsistence agriculture, remittances, regional customs revenue and a degree of manufacturing. The apparel industry and agriculture constitute the backbone of the economy and the main employer. Faced with Lesotho’s geo-economic circumstances and development challenges, the trade and economic response of government has been strategic. Domestic economic policy and structural reforms, accompanied by a policy of economic diversification, trade openness and integration, have been pursued. A trade development plan was carefully designed for active integration into regional and global value chains. These measures have yielded significant welfare gains and economic livelihood dividends. Trade and economic policies are reviewing the next generation of reforms, inter alia in the sectors of mining, electricity and tourism, which face challenges, but have potential for growth. This chapter identifies and discusses the specific steps in the trade policy plan for Lesotho’s successful integration into the textile and apparel value chain, specifically, and more broadly, into a global value chain.
Building Capacity in Africa to Facilitate Integration into Global Value Chains: Contributions from the ITC
While Africa’s share of global value-added trade has increased significantly during the past 20 years, connecting African small and medium-sized enterprises (SMEs) to value chains and turning the support for greater intra-African trade into a reality remains challenging. Ensuring that the trade discourse is fully integrated into this development story is critical and countries, especially those that have recently acceded, have to be supported to recognise and take advantage of the global trading system and their WTO membership. To place a spotlight on trade-led growth for SMEs, the International Trade Centre (ITC) launched its SME Competitiveness Outlook in 2015. This flagship publication identified three key determinants of SMEs’ ability to integrate into value chains: their ability to compete, connect and change. The ITC’s capacity-building interventions, which have a strong focus on African countries, are centred on helping SMEs become more competitive and connect to value chains to drive the continent’s sustainable economic development.