Aid for Trade: Cool Aid or Kool-Aid?

Aid for Trade may alleviate some fears by developing countries about the social cost of trade reforms and hence help de-block the WTO negotiations. It may also help address critical supply-side issues and contribute to the achievement of the MDGs. However, there is wide divergence in views what is covered, what should be supported and how. There are concerns among developing countries that, despite promises, aid for trade may simply be a redistribution of existing funds, that it may not address development priorities, and that arduous, new conditions will be attached. For these reasons, developing countries that might be expected to have welcomed the possibility of aid for trade, have looked with some suspicion at the proposals, regarding aid for trade more as Kool-Aid, rather than cool aid!

Whither Hungary and the European communities?

Recent political changes in Eastern Europe will help to cement improving economic relations with the European Communities (EC). Hungary has little alternative but to seek to continue strengthing these ties. It faces important supply constraints and needs injections of fresh capital to help it gear up to seize market opportunities. In the past, Hungary has been somewhere near the bottom of the EC's pyramid of privileges as far as tariff and non-tariff barrier (NTB) treatment are concerned. Hungary has been examining the options of applying for EC membership, European Free Trade Association (EFTA) membership, and examining other forms of association such as those the EC has with a number of Mediterranean countries. From a simulation exercise, the authors conclude that membership of the EC could lead to an expansion of Hungarian exports to the Communities of some 48 percent, with meats, iron and steel, fruit and vegetables, textiles, and clothing being the main sectors to gain. This results from setting tariffs to zero and eliminating non-tariff barriers. If EC or EFTA membership is ruled out, Hungary must seek a closer relationship with the EC, encompassing agriculture as well as manufactures, and covering tariffs and non-tariff barriers.Trade Policy,Environmental Economics&Policies,Economic Theory&Research,Agribusiness&Markets,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT

WTO rules and good practice on export policy

The WTO has increased international disciplines on export policy, but there is still scope for the use of export subsidies and other measures to promote exports. Under macroeconomic and trade reforms of the last decade, many countries have reduced or eliminated import measures which operate as an implicit tax on their own exports. While more needs to be done in this regard, various export promotion measures other than subsidies may be useful as a transitional device for countries which are proceeding in a phased manner towards more outward oriented policies. It is also important to identify and eliminate internal constraints to export, including fiscal burdens and bureaucratic procedures. Such efforts can be complemented by continued efforts to open external markets in trade negotiations. However, trade liberalization and domestic deregulation also contribute to efforts to increase productivity, which together with macroeconomic stabilization programmes, help maintain a realistic, stable real exchange rate that is so crucial to a successful export effort

Trade policies and the debt crisis

In the early 1980's, faced with a mounting debt crisis, most highly indebted developing countries increased trade barriers to generate more foreign exchange; but in the last three to four years, they have reversed course. Almost all highly indebted countries have undergone real devaluations and many have undertaken significant liberalizations. But industrial countries have imposed new non-tariff barriers against imports from highly indebted countries. Industrial countries'export subsidies have contributed to lower prices for beef, sugar and grains, which are important exports for some highly indebted countries. In general, highly indebted countries remain more protectionist than industrial nations. But growing protectionism in the industrial nations makes it more difficult for highly indebted countries to pay off their debts, and ultimately rebounds on creditor governments and banks.TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Economic Theory&Research,Environmental Economics&Policies,Trade Policy,Trade and Regional Integration

Trends in nontariff barriers of developed countries : 1966-1986

While major concerns have been expressed about the spread of non-tariff barriers (NTBs) in developing countries, the lack of empirical information on the dimensions of the increase has affected the related policy debates. Using inventories of NTBs in developed countries compiled for 1966 and 1986, this study develops quantitative information on the major expansions of NTBs that occurred over this 20 year period. The paper finds that in 1966 NTBs affected 25 percent of developed countries imports, while in 1986 this share has increased to 48 percent. A second major point documented in the study is that the spread of NTBs has been uneven across countries and industrial sectors. Third, this study shows that the increased resort to discriminatory NTBs like"voluntary"export restraints (particularly in the U.S.) caused a significantly higher share of trade to be"affected"by NTBs than suggested by commonly used trade coverage ratios. The findings concerning the extent that NTBs have proliferated in some sectors (and countries) also increases the importance of establishing effective procedures for liberalization of these measures in multilateral trade negotiations like the Uruguay Round.Environmental Economics&Policies,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Economic Theory&Research,Trade Policy,Transport and Trade Logistics

Multilateral approaches to market access negotiations

Market access negotiations in merchandise trade at the multilateral level cover tariffs and non-tariff measures (NTMs). While tariffs have been substantially reduced in earlier rounds, they remain high in certain areas and further reductions involve a number of complex technical issues. Some formulae approaches, not used in the Uruguay Round, seem more favourable to developing countries. Elimination or phased reductions of NTMs in agriculture is one of the main areas for further market access negotiations in trade in goods. However, most NTMs are now the subject to negotiations on the rules under which they may be applied, e.g. in the areas of contingency protection and technical barriers to trade

MERCOSUR: Objectives and achievements

MERCOSUR is one of the most important examples of renewed world-wide interest in regional trade agreements. It may be seen as a consolidation of unilateral reforms undertaken in conjunction with major macroeconomic adjustments. The paper reviews the objectives of MERCOSUR and assesses its achievements. It concludes that considerable progress has been made to achieving a customs union and even beyond that towards a common (but not EU-style single) market, but there are a number of areas where progress is still to be made

EU import measures and the developing countries

The EU's import policies towards developing countries are complex, stemming from important sectoral and country variations in policy. Average tariffs are modest, and, while there are tariff peaks and escalation in some areas of interest to developing countries, these are being reduced as a result of the implementation of the results of the Uruguay Round. The use of non-tariff measures has fallen, particularly as a result of agricultural tariffication, and is being further reduced in textiles and clothing. The elimination of VERs has not led to an increase in the use of alternative measures. Contingency protection falls more heavily in chemicals, iron and steel, certain textile items and certain electrical consumer goods and on Asian, Central and Eastern European and former Soviet Union countries. The operation of various factors appears to be working to mitigate the use of trade defence measures in recent years, helping to counter pressures that seem likely to arise as liberalization proceeds

Transition economies, business and the WTO

Transition economies are going through a process of changing the role of the state, allowing a greater role for the private sector. This is consistent with the market-oriented approach of the WTO. Remaining state agencies and enterprises will need to adapt their ways of doing business, including in their approach to procurement of goods and services, for economic and legal reasons. There is some hesitation about privatization, as for foreign direct investment, and, where accepted, about the precise timing. Where privatization of basic service monopolies occurs, the role of the state shifts towards a regulatory function. In some private sector activities, a non-interventionist approach to competition may be justified by market considerations, while in others a pro-active policy may be necessary to ensure the benefits of economic liberalization