CGD Launches New Report “Open Markets for the Poorest Countries: Trade Preferences That Work”

The CGD Global Trade Preference Reform Working Group launched its new report, Open Markets for the Poorest Countries: Trade Preferences That Work, yesterday before a packed room during an event at the Center. The report recommends several steps to make trade preference programs work for development: extend trade preferences to all exports from all least developed countries; relax or remove overly restrictive program rules, especially rules of origin; and make programs permanent or long-lasting.Watch highlights from the event here:CGD president Nancy Birdsall opened the event, emphasizing the importance of trade for development and of preference programs for the world’s poorest countries. She flagged that better trade policies are part of the eighth Millennium Development Goal (MDG).

We are putting trade on the agenda as a development issue, not as a trade issue per se. Trade preferences are part of the MDG universe.

With this in mind, Kimberly Elliott, CGD senior fellow and working group chair, called on developed countries to improve their trade preference programs by the UN Millennium Development Goals review summit this September and urged the G-20 leaders to put trade preferences on their agenda. Elliott said comprehensive, practical and predictable market access could provide a critical boost to the world’s poorest people with only minimal effects on preference-giving countries, including the United States. Ultimately, she said, successful trade preference programs will help lift a beneficiary nation’s socioeconomic standing so that it graduates from the least-developed-country classification.Working group members William Lane and Gawain Kripke joined the event as panel discussants. Lane, director of government affairs at Caterpillar, described trade preferences as an opportunity for American manufacturers, noting: “If people living in developing countries truly start benefitting from the global economy, demand for American products will grow dramatically.” He lauded the session as “the biggest positive trade event in Washington for some time,” and repeatedly expressed his concern over “outrageous [U.S.] tariff schemes” that “tax the poorest the most.”Kripke, director of policy and research at Oxfam America, acknowledged that trade preference reform, particularly expanding full market access to least developed countries, faces political inertia and “unchallenged received wisdom.” He said:

I do think it takes a push. The push is required from advocacy groups to build a counterweight that is based on development and poverty concerns, and also from the private sector showing that there is a very broad interest in our economy for the growth and development of other economies, especially the poorest.

The audience aptly included the mix of interests Kripke said is needed to move forward on trade preference reform: advocacy groups including ONE, Global Health Council, and Bread for the World; private sector individuals; congressional staff members; and representatives from multiple embassies. The launch follows a discussion CGD hosted with trade representatives from over half of the G-20 nations and multiple U.S. government agencies about whether and how trade preferences might be included in a future G-20 meeting. And overseas, the Trade Out of Poverty Campaign, a group of British Members of Parliament, is working to change UK and EU trade policies towards developing countries.It’s great to see a growing global constituency focused on improving trade policies for development, and I’m hopeful that through these efforts we’ll see trade preference reform on an upcoming G-20 agenda, as well as at the UN Millennium Development Goals review summit.Are you working on improving trade preferences for development? Do you have reactions or feedback about yesterday’s event? Please share your thoughts and experiences by commenting below or by emailing me at kfarrell@cgdev.org.