STRUCTURE OF THIS MANUAL This manual takes a five-step approach to defining the subject matter of a TPF and specifying the process by whic...
STRUCTURE OF THIS MANUAL This manual takes a five-step approach to defining the subject matter of a TPF and specifying the process by which it should be prepared. Part II places the larger issues in context by exploring the evolution of the debate over trade and development, presenting data on the rising level of trade in national economies and the association between exports 6 TRADE POLICY FRAMEWORKS FOR DEVELOPING COUNTRIES: A MANUAL OF BEST PRACTICES and success. It reviews the major strategic options of developing countries, including the all-important question of when countries ought to begin opening their markets. The analysis contrasts the experiences of successful economies that committed themselves to liberalization at an early stage of development with those of other economies that instead pursued a two-stage trade strategy. Comparative data generally confirm a close association between income and the extent to which countries leave major decisions to the market rather than the state. Part III takes up tactical issues, focusing on the instruments of trade policy. A TPF needs to identify not only the tools that are available to the country’s policymakers but also those that are employed by its trading partners. The framework should consider the types and levels of tariffs that are imposed by the country and its partners, and how they might be adjusted — whether autonomously or through negotiations — to serve the country’s interests in production and exports. The data show that there is generally an inverse relationship between tariffs and income, such that barriers tend to be lower where incomes are higher, but this is not an absolute rule. Beyond tariffs, countries also need to address a wide range of issues that determine the costs of doing business. These include the many procedures and rules that affect the movement of goods, antidumping and other trade-remedy laws, and the whole range of laws and policies governing services, investment and the protection of intellectual property rights. Part IV takes on trade negotiations and trade promotion.
One of the most important decisions that a country faces in its trade strategy is whether it aims to establish trade relations that are preferential or reciprocal. For decades, developing countries typically sought open access to the markets of their developed trading partners while seeking to maintain relatively high tariff and non-tariff barriers to their own markets. Many countries still take this approach, but others — where incomes are typically higher —
have been willing to engage in reciprocal negotiations through which they would achieve greater openness in both directions. They often do so by simultaneously engaging in multilateral initiatives and in RTAs. This part reviews the costs and benefits of these different negotiating forums, and also examines the challenges that come in the implementation and enforcement of trade agreements. This includes both the soft forms of enforcement (e.g. transparency, notifications and the like) and the hard option of the WTO’s Dispute Settlement Body. The value of trade agreements can also be multiplied through well-designed programmes of trade and investment promotion. Part V addresses the institutions of trade policymaking. The first decision that any country must face in this field is which ministry or other agency will be given principal responsibility for this subject, a task that might reasonably be assigned to the foreign ministry, the finance ministry, or some other body. The analysis reviews the arguments for each of these divisions of labour. It concludes that there are trade-offs with each of these options and that close coordination is needed between different agencies of Government and between the public and private sectors no matter what institution takes the lead. It is also an area in which officials often need assistance to build their capacity and expertise. Part VI identifies best practices in the preparation of a TPF. In addition to laying out the principal steps in the process, from the request for assistance through the execution of a plan, this part argues that a TPF should present an overall vision of where trade policy fits in the country’s development strategy. A framework needs to be owned by the country itself, and promoted by a champion in the Government. It should clearly identify the main objectives of trade policy, whether they are conceived as inward-oriented, outwardoriented, or market-oriented. Other issues addressed in this concluding part concern the timing of a TPF, the attention devoted to internal and external constraints, and the collection and analysis of data. Appendices elaborate on these points by providing checklists of issues to be addressed with respect to the country’s characteristics and its strategy, the capacity of the principal trade agencies, and the institutions in Government and civil society that ought to be consulted when devising, revising, and validating a TPF. Part VII concludes with some final observations and presents checklists that researchers may employ when conducting a TPF.
No comments