JURISDICTION AND RESOURCES OF A LEAD MINISTRY How should a trade ministry be organized? That question can be broken down into several small...
JURISDICTION AND RESOURCES OF A LEAD MINISTRY How should a trade ministry be organized? That question can be broken down into several smaller ones, starting with which government agency should take the lead in this field. These are issues for which it is difficult to offer a definitive list of universally best practices, as the differing arrangements that countries make will vary greatly according to their constitutional requirements, political traditions and economic resources. In this section we venture only to identify the range of distinct experiences, commenting on the advantages and disadvantages of different approaches.
1. Which ministry should lead on trade? Trade policy is conducted at the busy intersection of development policy, foreign policy, and fiscal policy, and it occasionally reaches junctures with other areas such as social and environmental policy. There are many different ways that a country might choose to reconcile the often-competing demands of the ministries that are tasked with making and executing policy in these distinct areas.
The most traditional division of labour assigns the negotiation of trade agreements to the ministry of foreign affairs, on the rationale that trade policy is one dimension of foreign policy and the negotiation of treaties is best left to diplomats. The advantages of housing this responsibility in the ministry of foreign affairs include greater coherence between foreign and economic policy, a lower probability of capture by domestic interests, and a greater likelihood that the country will efficiently use its worldwide network of embassies, missions, and consulates. These outposts can provide invaluable economic information, political intelligence, and logistical support for trade negotiators. This organizational model may also be attractive to countries that aspire to treat trade as an instrument of foreign policy,
whether that means negotiating trade agreements with friendly countries or directing sanctions at others. There are also disadvantages to this approach. A ministry of foreign affairs may place other diplomatic or security objectives ahead of trade goals in the hierarchy of objectives. This is precisely why the United 52 TRADE POLICY FRAMEWORKS FOR DEVELOPING COUNTRIES: A MANUAL OF BEST PRACTICES States Congress removed authority over trade policy from the State Department in 1962, for example, and transferred the portfolio to the predecessor agency to the Office of United States Trade Representative (USTR). Colombia and Costa Rica are among the other countries that have adopted similar decisions. Another problem with housing trade policy in the foreign ministry is that career diplomats who are trained to be generalists do not necessarily have the specialized, technical knowledge required in modern trade policymaking. When trade negotiations were mainly about reducing or eliminating tariffs a diplomat could, with the appropriate instruction, learn the essentials in fairly short order. The same cannot be said for today’s more complex issues such as financial and telecommunications services, investment, intellectual property rights, and sanitary and phytosanitary measures, each of which require that policymakers develop deeper and wider expertise. This problem has been solved in some countries by integrating foreign and trade ministries into a single ministry. That approach is common to certain developed countries (e.g. in Australia, Canada, and New Zealand) as well as developing countries (e.g. Brunei, Jamaica, and Kenya). In recognition of the potential shortcomings of this most traditional model, three other variants have been tried: • A ministry of trade and industry may take the lead. This model has the advantage of integrating both industrial and trade policies into a single framework. • Trade policy may be the responsibility of the ministry of economy (sometimes called the ministry of development), thus acknowledging the link between modern trade policy and a wider range of objectives such as the promotion of employment, diversification, and inclusive growth. • A third model is cantered on a dedicated trade institution. Two versions of this approach include the special case of the United States, where negotiating is almost all that the USTR does, and the more typical arrangement in which trade ministries have a broader set of trade-related responsibilities such as trade and investment promotion. Not all trade ministries will fit neatly into one of these categories.
Some of them bear titles that suggest a diverse range of responsibilities, such as the Ministry of Industry, Trade and Labour (Israel) or the Ministry of Commerce and Supplies (Nepal). The long list of responsibilities that may be assigned to the trade ministry can lead to equally lengthy titles, as in the case of the Ministry of Trade, Investment Promotion, Private Sector Development and Consumer Protection (Belize), and the Ministry of Trade, Industry, Private Sector Development and Presidential Special Initiatives (Ghana). Whichever ministry is given the lead, three cardinal rules should be followed. First, all other ministries and agencies dealing with the large and expanding subject matter of trade policy need to be consulted regularly in any initiative affecting the topics within their jurisdiction. Second, governments should resist the temptation to reassign this topic from one agency to another whenever there is a shift in national policy. Those changes, even when well intentioned, can disrupt the work of the officials assigned to deal with trade. Third, any officials with responsibilities for this area of public policy — whether they are part of the lead ministry or in other government agencies — should be given the tools and training they need to carry out their assigned tasks correctly and efficiently. That is the topic to which we now turn
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