Trade Policy Note Final-rev08 - Development

The case and options for widening the policy space
Trade negotiations are aimed at achieving the mutual reduction of tariffs and other
barriers to trade in goods among the participants. However, they also deal with
measures affecting trade in services (e.g. communications, finance, transportation,
energy, immigration, even health and education and sanitation), the flow of
investment and the enforcement of intellectual property rights. The prevailing
underlying view is that this will lead to improved access to markets and a more
efficient allocation of resources, stimulating economic growth and development.
Trade policy should be focused on achieving specific development goals such as the
elimination of poverty and the achievement of the MDGs. It should aim at (a)
enabling poorer people to compete in a globalized world market, by increasing their
productivity. It should also (b) ensure the most equitable sharing of benefits of trade,
so that poor people, women and other disadvantaged groups can draw benefits from
exports and equality within the country and between social groups, regions and
genders can be promoted. Such policies should (c) shield vulnerable groups from the
impact of trade liberalization when this threatens their livelihoods and (d) ensure that
the liberalization of goods and services effectively contributes to these objectives. It
should be noted that some MDGs , such as access to energy, water and health services,
are now the subject of international trade negotiations.
Governments must ensure that the international commitments they enter are
supportive of these goals. International trade negotiations must aim at providing free
access to markets for the goods and services of developing countries, while
committing stronger trading partners to measures supportive of these goals. The
overall outcomes of such initiatives will be central to the achievement of MDG8, the
Global Partnership for Development.
Effective design and implementation
Government’s ability to define such strategies and to defend and pursue them in
international trade negotiations is enhanced by more active participation of civil
society and other stakeholders, who stand to be affected either positively or negatively
by trade agreements. This process should assist in identifying the pro-poor and prodevelopment
elements of trade policy which should be incorporated in legislation and
defended in trade negotiations. At the same time, the actions of other countries that
could frustrate these objectives should also be identified, and pursued in trade
negotiations both by seeking systemic improvements or specific concession by
trading partners. A further essential element is to anticipate the actions of other
countries and seek a national consensus on an appropriate reaction.
Coverage
This Policy Note is intended for policy makers seeking to pursue a development
strategy through the application of trade policy. It addresses many of the questions
which every trade policy “practitioner” will inevitably face over the next few years,
and provides background facts and a set of tools available for the pursuit of the
MDGs and the development objectives mentioned above. It contains the following
Sections, in addition to this one and appropriate sectoral annexes:
Section II - Policy Space for Future National Development Strategies
Section III - Tariffs and Industrial Policy
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