Trade Policy Note Final-rev08 - Development
Trade Policy Note Final-rev08 - Development
Trade Policy Note Final-rev08 - Development
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I. AIMS AND OBJECTIVES<br />
This <strong>Policy</strong> <strong>Note</strong> addresses (a) how governments can provide a specific pro-poor and<br />
pro-development focus to their trade policies in a manner that is supportive of MDG<br />
achievement, and suggests (b) how they can pursue these goals in international trade<br />
negotiations.<br />
Background concepts, past and current debates<br />
<strong>Trade</strong> policy can constitute a key tool for the achievement of the MDGs. Using trade<br />
policy as an instrument of industrial diversification and the creation of value added<br />
remains key. Moreover, exports of goods and services can provide increased incomes<br />
for poor people, government revenue, opportunities for employment, including high<br />
paid jobs abroad, particularly for women and young job-seekers. Exports can thus<br />
contribute to the achievement of MDGs, by lifting people out of poverty (MDG1) and<br />
empowering women (MDG3), while supporting MDG8, whose target 12 aims at a<br />
trading system in which developing countries can extract greater benefit from the<br />
international trading system.<br />
However, the gains from exports ma y accrue to the richer segments of the population,<br />
and export industries can damage the environment and otherwise undermine the<br />
livelihoods of poor people. Imports of goods and services can crowd out domestic<br />
producers, undermine livelihoods, exacerbate inequalities and push people into<br />
poverty. At the same time, trade liberalization can bring vital capital and technology,<br />
as well as essential inputs for improving infrastructures and increasing productivity,<br />
including that of poor people.<br />
All WTO members are taking part in the Doha Round of multilateral trade<br />
negotiations, and most are actively engaged in the negotiation of Free <strong>Trade</strong><br />
Agreements (FTAs). In designing and pursuing a trade policy to achieve the MDGs,<br />
developing countries face the constraints posed by the trade agreements that they have<br />
accepted. The WTO Multilateral <strong>Trade</strong> Agreements (MTAs) are both extensive, i.e.<br />
they discipline a wide range of policy areas central to development strategies, and<br />
intrusive, i.e. they impose a detailed legal framework on national economic and social<br />
policies. In addition, many developing countries have entered into regional and<br />
bilateral, often extra-regional, FTAs which go beyond the WTO (“WTO plus”) in<br />
terms of their scope and intrusiveness.<br />
This new international trading system thus has the disadvantage of constricting the<br />
policy space available for countries to pursue a development oriented national trade<br />
policy. Nevertheless, this presents the opportunity for developing countries to press<br />
for international trade rules and seek commitments on the part of their trading<br />
partners that are supportive of their development goals - which is precisely what<br />
MDG8 is intended to achieve. However, this requires that developing countries are<br />
able (a) to define such goals in their national policies, and (b) effectively pursue these<br />
goals in international trade negotiations.<br />
* This <strong>Policy</strong> <strong>Note</strong> has been prepared by Murray Gibbs. All comments and queries can be sent to<br />
esa@un.org<br />
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