VALUE OF TRADE POLICY FRAMEWORKS A TPF can help countries meet these needs by providing a sense of the big picture in which trade policy f...
VALUE OF TRADE POLICY FRAMEWORKS A TPF can help countries meet these needs by providing a sense of the big picture in which trade policy forms a part, while also filling in many of the details of that landscape. The document is intended to examine the specific circumstances of a country’s trade and development problems, focusing on both its challenges and opportunities, and to prioritize the steps to be taken internationally and domestically in order to remove the impediments to its full participation in the trading system. Those domestic steps will typically be just as important, and often more so, as any deals reached with the country’s trading partners. While exporters may still face tariff and non-tariff barriers for some of its exports to important foreign markets, they will often find that local constraints — whether infrastructural, institutional, or societal —
can be the most significant obstacles to their competitiveness. A TPF can identify the most important barriers and inefficiencies at home and abroad, and put forward plans to address them. The primary beneficiary of a TPF is the country under examination, but these reports may also be seen as detailed case studies in the relationship between trade and development. Taken as a whole, the body of TPFs also provide a useful resource for those developing countries that are not themselves subject to this exercise. These analyses present information on how countries in similar circumstances have dealt with their challenges. By examining both what has worked and what has not, TPFs can collectively help to identify best practices for trade and development. This does mean devising some universally valid trade strategy. Each country will have its own special mix of history, factor endowments, geographic position, political culture and so forth, and it would misguided to attempt to devise a catch-all set of policy prescriptions that gloss over those differences. But while all countries may be said to be special, none of them are entirely unique. There are important respects in which any one country will be similar to many others, and the experiences of their peers — both positive and negative — can offer useful guidance.
TPFs often point to success stories in other developing countries, offering models that a country may seek to emulate. The TPF for Jamaica was informed by the lessons learned from the tourism strategy of the Dominican Republic, for example, and the TPF for Rwanda pointed to the success of Kenya in flower exports. Similarly, the TPF for Tunisia drew upon the experience of other countries in advising on the consequences of signing the Information Technology Agreement (ITA); this included some countries that had joined the Agreement (i.e. Costa Rica, India and Thailand), and others that did not (i.e. Bangladesh and Kenya). Beyond those tactical lessons, TPFs can also address the perennial, strategic issues of trade and development. For over two centuries, the key question in this debate has concerned the proper sequence for countries to follow in the opening of domestic and foreign markets. At what stage in its development should a country move to lower or eliminate its barriers to imports and begin the transition from a State-led to a market-led economy? To simplify, should a country (1) seek to retain a large role for the State for as long as possible, promoting domestic industry while restraining imports through, inter alia, high tariff barriers,
or (2) should it open its market and reduce intervention at an early stage of its economic development, or (3) should it calibrate its market-opening steps with the pace of its development, such that it becomes progressively less interventionist as its economy gains in sophistication, prosperity, and diversity? There have been proponents and practitioners of all three positions since the late eighteenth century, and there is no consensus position as to which approach has historically best served the interests of developing countries. The TPFs cannot resolve that debate once and for all, but they can make a valuable contribution to it by providing examples of what has and has not worked in the experiences of specific developing countries.
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