World Trade Organization - Harvard Model United Nations

World Trade Organization
OVOP has had notable success in Malawi. Agriculture
accounts for 90% of Malawi’s exports but Malawi
farmers lacked expertise in promoting their goods abroad
and in growing and managing their farms and businesses.
The Ministry of Economy, Trade and Industry (METI)
and the Japan External Trade Organization (JETRO)
have heavily promoted Malawi’s products to Japanese
consumers as well as helped it export its goods to
neighboring countries like Mozambique. The OVOP
is just one policy in the greater battle to help countries
build trade capacity through the development of human
capital and institutions. 24
Challenges Ahead
Focusing on Competitiveness
Countries need to go beyond purely funding
for economic growth and focus on how to increase
competitiveness in country growth strategies. Governments
have only recently begun using policies to address supplyside
constraints on trade whereas previously, much more
attention was focused on government subsidies to local
businesses to incentivize more production of goods that
result in a slightly higher GDP growth but does nothing
for the overall, sustainable competitiveness of the country
in the global trading system.
First, more focus must be on dealing with the
incentives to trade. Low-income countries need to
implement more operational strategies that deal not
only with lower border barriers like tariffs but also
the tax system, investment policies, and labor market
regulations. By having these favorable policies in those
areas, production of more goods will lead to more profit
that can be better spent on investments in human and
capital. Furthermore, governments must focus on
how to build the service infrastructure (transportation,
telecommunications, finance) that reduce production
costs for firms and increase their competitiveness. Lastly,
these price incentive policies must be complemented
with proactive policies to promote exports. These policies
include government assistance in obtaining information
about export markets and in ensuring that export goods
are up to the technical and sanitary standards of foreign
countries. 25
World Bank and IMF activities
Lending is a crucial tool of the World Bank and the
IMF in providing Aid for Trade assistance to developing
countries. Concessional and non-concessional lending
that focuses on helping countries bear the cost of making
their economies more export compatible (building
infrastructure etc.) has grown from $400 million in 2000
to more than $1.6 billion 2007. These loans were given to
42 countries located mostly in Europe, Central Asia, and
Africa. Most loans were directed at boosting trade-related
sectors like communications, transportation, regulatory
systems, finance, energy, and rural development. 26
The World Bank has also been working closely with
LDCs to implement programs tailored for each country.
Help comes in the form of policy advice for countries
pursuing trade liberalization reforms (such as Ecuador,
Indian, Iraq, Madagascar) and technical assistance for
countries applying for WTO membership (such as Russia,
Ethiopia, and Vietnam). The Bank also gets involved in
A recent Global Development Debate brought experts together to
explore ways to better manage capital flows to and from emerging
economies.
more local aspects of trade capacity building such as
promoting learning events and courses on trade in goods
and services and poverty reduction through trade.
Aside from lending, the IMF mostly focuses on
surveillance of trade policies to ensure that LDCs are
treated fairly in trade negotiations. Furthermore, the
IMF engages in trade-related research to identify traderelated
macroeconomic vulnerabilities in countries and
advises government authorities on how to best address
them. 27
Relevant Action
In addition to the Integrated Framework and the
JITAP mentioned above there are other recent tradeassistance
programs that have already begun to achieve
notable results.
10
Specialized General Assembly Agencies