Rich countries and some emerging powers offer poorer developing countries a hodgepodge of preferential market access arrangements intended to create opportunities for exports, jobs, investment and development. But the programs are often flawed and lack coordination. The initiative aims to reform trade preference programs to expand market access for developing countries, especially the poorest.
Persistent delays in concluding multilateral trade negotiations through the World Trade Organization (WTO), combined with the global economic crisis, increase the risk that the poorest developing countries will be further marginalized in the global economy. This is already happening to some degree as a result of the impact of the economic crisis on trade flows, and could be exacerbated if delays in concluding the Doha Round encourage the spread of regional and bilateral trade agreements. Unilateral trade preference programs are an important mechanism for mitigating these effects.
High-income countries have already committed, via the Millennium Development Goals and again at the 2005 WTO ministerial in Hong Kong, to provide duty-free, quota-free market access for the least-developed countries. Those commitments could provide a foundation for effective preference programs. But existing programs are often overly restrictive and complex, and lacking in coordination within and across countries.
To address these problems, the Center for Global Development convened the Global Trade Preference Reform Working Group in April 2009. The group is working to identify practical policy recommendations for preference-giving countries to improve and coordinate their trade preference programs to better serve development objectives. The goal is to encourage preference-giving countries, including emerging powers, to move jointly towards better and more coherent policies.
A working group background paper
by CGD senior fellow and group co-chair Kimberly Elliott points to the following key constraints that prevent trade preferences having a greater contribution to development:
They are complex and difficult to use, especially because of restrictive rules of origin
They expire without periodic renewal, undermining the predictability needed to attract investment
Products that developing countries commonly export are frequently excluded
There is little or no coordination with trade capacity-building efforts, including, for example, aid for infrastructure and better customs procedures
This week, I’m joined on the Global Prosperity Wonkcast by Kimberly Ann Elliott, a senior fellow here at the Center for Global Development. Kim’s research focuses on ways in which rich country trade policy affects the developing world. She currently chairs CGD’s working group on Global Trade Preference Reform.
Trade preferences are a way for countries to offer access to their markets to poor countries, in spite of other import tariffs or quotas that might otherwise apply. Kim tells me that most countries, including a growing number of advanced developing countries, have some form of trade preference program. However, she says, not all of them benefit developing countries very much.
CGD senior fellow Kimberly Ann Elliott submitted a written statement for the congressional record following the House Ways and Means Trade Subcommittee hearing on preference reform. Elliott urges policymakers to consider the special needs of the poorest countries as they debate the future of U.S. trade programs.
Despite six decades of trade liberalization, trade policies in rich countries still discriminate against the exports of the world’s poorest countries. Much remains to be done to achieve the goal of meaningful market access for the poorest countries, including reformed rules of origin that facilitate rather than inhibit trade.
Many Americans see trade openness as a threat. Yet access to rich-country markets is crucial for poor people in developing countries to improve their lives. In a new CGD brief based on her essay in The White House and the World: A Global Development Agenda for the Next U.S. President, senior fellow Kimberly Elliott suggests a trade policy approach that would address Americans’ concerns and still be pro-poor. One ingredient: treat market access for the world’s poorest countries as a development issue, not trade policy.
READ THE BRIEF
By any measure, the United States is one of the most open economies in the world—importing more than $1 trillion worth of goods duty-free in 2006 alone. Yet poor nations still pay much higher U.S. tariffs than rich countries—an average of 15 percent on a quarter of their imports, compared to 2-5 percent for rich countries. Not only is this unfair, it also undermines American interests by hindering growth in the poorest countries, thereby making them more vulnerable to epidemic diseases, terrorists, and transnational criminal organizations. In this new CGD Brief, senior fellow Kimberly Ann Elliott makes the case for the U.S. to fix this problem by permanently granting all least-developed countries 100% duty-free, quota-free market access and simplifying rules of orgin.
Learn More
In this brief we focus on potential disruptions in poor countries and the policy priorities for coping with them. In particular, we recommend that the United States, which is the only rich country that does not grant tariff-free access for imports from all least-developed countries, provide this access as quickly as possible. In addition, to take advantage of any resulting opportunities, beneficiary countries must adopt domestic reforms to encourage greater productivity.
Despite six decades of trade liberalization, trade policies in rich countries still discriminate against the exports of the world’s poorest countries. Much remains to be done to achieve the goal of meaningful market access for the poorest countries, including reformed rules of origin that facilitate rather than inhibit trade.
Many Americans see trade openness as a threat. Yet access to rich-country markets is crucial for poor people in developing countries to improve their lives. In a new CGD brief based on her essay in The White House and the World: A Global Development Agenda for the Next U.S. President, senior fellow Kimberly Elliott suggests a trade policy approach that would address Americans’ concerns and still be pro-poor. One ingredient: treat market access for the world’s poorest countries as a development issue, not trade policy.
READ THE BRIEF
By any measure, the United States is one of the most open economies in the world—importing more than $1 trillion worth of goods duty-free in 2006 alone. Yet poor nations still pay much higher U.S. tariffs than rich countries—an average of 15 percent on a quarter of their imports, compared to 2-5 percent for rich countries. Not only is this unfair, it also undermines American interests by hindering growth in the poorest countries, thereby making them more vulnerable to epidemic diseases, terrorists, and transnational criminal organizations. In this new CGD Brief, senior fellow Kimberly Ann Elliott makes the case for the U.S. to fix this problem by permanently granting all least-developed countries 100% duty-free, quota-free market access and simplifying rules of orgin.
Learn More
CGD senior fellow Kimberly Ann Elliott submitted a written statement for the congressional record following the House Ways and Means Trade Subcommittee hearing on preference reform. Elliott urges policymakers to consider the special needs of the poorest countries as they debate the future of U.S. trade programs.
In this brief we focus on potential disruptions in poor countries and the policy priorities for coping with them. In particular, we recommend that the United States, which is the only rich country that does not grant tariff-free access for imports from all least-developed countries, provide this access as quickly as possible. In addition, to take advantage of any resulting opportunities, beneficiary countries must adopt domestic reforms to encourage greater productivity.
This week, I’m joined on the Global Prosperity Wonkcast by Kimberly Ann Elliott, a senior fellow here at the Center for Global Development. Kim’s research focuses on ways in which rich country trade policy affects the developing world. She currently chairs CGD’s working group on Global Trade Preference Reform.
Trade preferences are a way for countries to offer access to their markets to poor countries, in spite of other import tariffs or quotas that might otherwise apply. Kim tells me that most countries, including a growing number of advanced developing countries, have some form of trade preference program. However, she says, not all of them benefit developing countries very much.
Kimberly Ann Elliott is the author or co-author of numerous books and articles on a variety of trade policy and globalization issues, including uses of economic leverage in international negotiations (both economic sanctions for foreign policy goals and trade threats and sanctions in commercial disputes). Her most recent book is Delivering on Doha: Farm Trade and the Poor, which was co-published by CGD and the Peterson Institute (PIIE) in July 2006.
CGD senior fellow Kimberly Ann Elliott submitted a written statement for the congressional record following the House Ways and Means Trade Subcommittee hearing on preference reform. Elliott urges policymakers to consider the special needs of the poorest countries as they debate the future of U.S. trade programs.
Despite six decades of trade liberalization, trade policies in rich countries still discriminate against the exports of the world’s poorest countries. Much remains to be done to achieve the goal of meaningful market access for the poorest countries, including reformed rules of origin that facilitate rather than inhibit trade.
Many Americans see trade openness as a threat. Yet access to rich-country markets is crucial for poor people in developing countries to improve their lives. In a new CGD brief based on her essay in The White House and the World: A Global Development Agenda for the Next U.S. President, senior fellow Kimberly Elliott suggests a trade policy approach that would address Americans’ concerns and still be pro-poor. One ingredient: treat market access for the world’s poorest countries as a development issue, not trade policy.
READ THE BRIEF
By any measure, the United States is one of the most open economies in the world—importing more than $1 trillion worth of goods duty-free in 2006 alone. Yet poor nations still pay much higher U.S. tariffs than rich countries—an average of 15 percent on a quarter of their imports, compared to 2-5 percent for rich countries. Not only is this unfair, it also undermines American interests by hindering growth in the poorest countries, thereby making them more vulnerable to epidemic diseases, terrorists, and transnational criminal organizations. In this new CGD Brief, senior fellow Kimberly Ann Elliott makes the case for the U.S. to fix this problem by permanently granting all least-developed countries 100% duty-free, quota-free market access and simplifying rules of orgin.
Learn More
In this brief we focus on potential disruptions in poor countries and the policy priorities for coping with them. In particular, we recommend that the United States, which is the only rich country that does not grant tariff-free access for imports from all least-developed countries, provide this access as quickly as possible. In addition, to take advantage of any resulting opportunities, beneficiary countries must adopt domestic reforms to encourage greater productivity.
This week, I’m joined on the Global Prosperity Wonkcast by Kimberly Ann Elliott, a senior fellow here at the Center for Global Development. Kim’s research focuses on ways in which rich country trade policy affects the developing world. She currently chairs CGD’s working group on Global Trade Preference Reform.
Trade preferences are a way for countries to offer access to their markets to poor countries, in spite of other import tariffs or quotas that might otherwise apply. Kim tells me that most countries, including a growing number of advanced developing countries, have some form of trade preference program. However, she says, not all of them benefit developing countries very much.
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Rich countries and some emerging powers offer poorer developing countries a hodgepodge of preferential market access arrangements intended to create opportunities for exports, jobs, investment and development. But the programs are often flawed and lack coordination. The initiative aims to reform trade preference programs to expand market access for developing countries, especially the poorest.
