Trade Policy Note Final-rev08 - Development
Trade Policy Note Final-rev08 - Development
Trade Policy Note Final-rev08 - Development
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
Box 14: Export Policies and WTO and other Tra de Agreements<br />
The Agreement on Subsidies and Countervailing Measures (Article 27.2(a)) exempts LDCs<br />
from the prohibition on export subsidies. The same exemption is also provided to a list of<br />
countries (in Annex VII) as long as their per capita GDP remains below $1000. <strong>Note</strong> that<br />
some acceding countries have forsaken this right in their terms of accession to the WTO. The<br />
Agreement on Agriculture permits countries to subsidize exports up to the level of their<br />
negotiated commitments. Very few developing countries have negotiated such commitments,<br />
and thus cannot subsidize.<br />
The TRIMs Agreement prohibits trade balancing requirements, i.e. that investing firms must<br />
export to the extent they import. However, it does permit export performance and transfer of<br />
technology requirements. The GATS Agreement permits performance requirements for<br />
developing countries in order to help strengthen services in developing countries and it has no<br />
effective disciplines on export subsidies.<br />
However, many countries have given up the right to these and other performance<br />
requirements in their terms of accession or in bilateral agreements (BITs and FTAs).<br />
Access to Export Markets<br />
Export-led development strategies obviously require the most free and secure access<br />
to world markets possible. For several decades developing countries have enjoyed<br />
preferential access to developed countries’ markets under the Generalized System of<br />
Preferences negotiated in UNCTAD. These had the advantage of being nonreciprocal,<br />
but the serious disadvantages of not being bound and thus insecure, and of<br />
containing many exceptions, precisely in sectors, (e.g. textiles and clothing and<br />
agriculture) where developing countries possess a comparative advantage. Some<br />
poorer developing countries, notably those in the ACP group, benefited from<br />
contractual preferences in the EU. Most developed countries (excluding the USA)<br />
have complied with their commitment to extend duty free treatment to LDCs. Other<br />
developing countries are granted autonomous preferences to assist them in dealing<br />
with specific problems, such as dependence on exports of illicit drugs.<br />
Many developing countries are seeking to negotiate FTAs with major developed<br />
countries as a means of ensuring conditions of access equal to those of their<br />
competitors. Negotiations have already begun to convert ACP preferences into<br />
reciprocal FTAs (“Economic Partnership Agreements”).<br />
However, barriers and distortions to world trade, particularly subsidized agricultural<br />
production and exports in the industrialized countries, ha ve heavily penalized many<br />
developing countries. Contingent measures such as anti-dumping duties have served<br />
to “nip in the bud” export expansion in developing countries, while stricter sanitary<br />
and technical regulations have also had a disproportionate impact on poor people,<br />
excluding them from export income. Stringent rules of origin have resulted in many<br />
exports not benefiting from available tariff preferences. Poorer people are much more<br />
adversely affected by insecure access to markets, as sudden disruptions to their<br />
exports can provoke immediate unemployment in export industries and bankrupt<br />
small independent producers.<br />
31