WTO Archive

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UNCTAD 14: Policy coherence needed to turn trade into an engine for growth in Africa

Trade and investment can be drivers of inclusive growth for sustainable development in Africa, says the ILO’s Deputy Director-General for Field Operations and Partnerships, Gilbert Houngbo, at UNCTAD 14 in Nairobi but calls for more integrated policies to realize that potential. By Gilbert Houngbo, Deputy Director for Field Operations and Partnerships, the International Labour Organization (ILO). Africa’s rapidly growing workforce needs decent work. Increased trade and investment can help drive inclusive growth for sustainable development but we need more integrated policies to realize that potential. It could prove vital for the creation of decent jobs, especially for millions of young Africans, and this is the message that the ILO is bringing to the 14th United Nations Conference on Trade and Development  (UNCTAD 14) being held from 17 to 22 July in Nairobi, Kenya. How to translate decisions into actions after the adoption of the 2030 Agenda for Sustainable Development ? That’s […]
Trade and investment can be drivers of inclusive growth for sustainable development in Africa, says the ILO’s Deputy Director-General for Field Operations and Partnerships, Gilbert Houngbo, at UNCTAD 14 in Nairobi but calls for more integrated policies to realize that potential.
By Gilbert Houngbo, Deputy Director for Field Operations and Partnerships, the International Labour Organization (ILO).

Africa’s rapidly growing workforce needs decent work. Increased trade and investment can help drive inclusive growth for sustainable development but we need more integrated policies to realize that potential.

It could prove vital for the creation of decent jobs, especially for millions of young Africans, and this is the message that the ILO is bringing to the 14th United Nations Conference on Trade and Development  (UNCTAD 14) being held from 17 to 22 July in Nairobi, Kenya.

How to translate decisions into actions after the adoption of the 2030 Agenda for Sustainable Development ? That’s what will be at the heart of the conversation among Heads of State and Government, ministers of economic affairs and trade, accompanied by leaders from international organizations, business, civil society and media.

After decades of assuming that sound economic, trade and investment policies would automatically deliver growth and thereby employment and decent work, the world has come to know better. That is why all Member States explicitly made inclusive growth and decent work for all one of the 17 global sustainable development goals (SDGs).

The 2030 Agenda is an integrated approach to development where economic growth, environmental protection and social justice shall go hand in hand. Full employment and decent work for all is placed together with inclusive economic growth as SDG number 8 , at the very heart of the 2030 Agenda.

Harnessing the potential of trade and investment as an important stimulus for the generation of decent work opportunities and sustainable development is a crucial component of the global partnership for the implementation of the 2030 Agenda. The ILO and its Decent Work Agenda  brings several interconnected policy tools and supporting evidence-based research to such a new global partnership.

The Decent Work Agenda has four strategic objectives, considered equally important and mutually reinforcing: To set and promote standards and fundamental principles and rights at work; to create increased opportunities for women and men to decent employment and income; to enhance the coverage and effectiveness of social protection for all, and to strengthen tripartism and social dialogue – that is, to strengthen trade unions and employers’ organizations and their capacity for dialogue with each other and with governments.

Working women and men across Africa recognize the need for such policies. The Addis Ababa Declaration at the 13th African Regional Meeting of the ILO  in December last year spells it out: In spite of high and sustained growth over the past decade – in fact six of the top ten fastest growing economies were in Africa – progress has been lacking in diversifying productive capacity, inequality is increasing and poverty remains among the highest in the world.

Lack of employment and decent work for young people is the continent´s most pressing challenge. The ILO´s report on Global Employment Trends for Youth 2015  pinpointed the fact that North Africa has the highest youth unemployment rate in the world, at more than 30 per cent, a majority of them long-term unemployed. While sub-Saharan Africa fares better, at 11.6 per cent youth unemployment – the long-term figure there of 48.1 per cent is also very serious. And this does not count the millions of young people who have given up to look for a job altogether. If they are included, the figures nearly double in low-income countries.

With high unemployment and underemployment depicting a bleak scenario, employers including foreign investors are also concerned that they cannot find the skilled workers they need. This indicates a serious skills gap – which certainly is a barrier for African countries to take successful part in global supply chains, the dominating mode of production, trade and growth in the globalized economy.

The ILO is assisting our member states in addressing this multifaceted challenge by leading the Global Initiative on Decent Jobs for Youth . This is a unique partnership developed by 21 United Nations agencies as a platform to engage all partners investing and supporting youth employment around the world. Better skills development and linkages to global markets and investments are key among the actions to be taken under this initiative.

Meeting the challenge of assuring progress towards decent work throughout global supply chains will require the strengthening of a range of labour market institutions, including the capacity of public authorities and employers’ and workers’ organizations to effectively monitor and enforce compliance with laws and regulations. This was one of the conclusions of the discussions on the ILO´s International Labour Conference , which met in Geneva, Switzerland last month.

These conclusions can instil new life into the trade and investment outlooks of the African continent. They urge governments to adopt a more integrated and coordinated approach to policy-making. It is crucial to ensure that all relevant ministries are involved across their respective portfolios when their policies influence each other – and that is certainly the case for trade, investment and labour policies.

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Evaluation of Finnish Aid for Trade – Free Webinar

Evaluation of Finnish Aid for Trade – Free Webinar Monday, June 13, 2016 1:00 PM – 2:30 PM CEST Register now: https://attendee.gotowebinar.com/register/2812033248815322370 Finland’s Action Plan for Aid for Trade 2012 – 2015 “Creating jobs through private sector and trade development” was evaluated. It was interesting, how the cross cutting objectives and human rights based approach are fulfilled in Aid for Trade projects and analyze the relations between Aid for Trade and other sectors and themes. The evaluation also analyzed different forms of cooperation in Aid for Trade (for example country- and region level, multilateral and EU-cooperation, companies, NGOs etc.) as well as the funding instruments (Finnfund and Finnpartnerhip). This Webinar will serve to present and discuss the conclusions and recommendations.

Evaluation of Finnish Aid for Trade – Free Webinar

Monday, June 13, 2016 1:00 PM – 2:30 PM CEST

Register now: https://attendee.gotowebinar.com/register/2812033248815322370

Finland’s Action Plan for Aid for Trade 2012 – 2015 “Creating jobs through private sector and trade development” was evaluated. It was interesting, how the cross cutting objectives and human rights based approach are fulfilled in Aid for Trade projects and analyze the relations between Aid for Trade and other sectors and themes. The evaluation also analyzed different forms of cooperation in Aid for Trade (for example country- and region level, multilateral and EU-cooperation, companies, NGOs etc.) as well as the funding instruments (Finnfund and Finnpartnerhip). This Webinar will serve to present and discuss the conclusions and recommendations.

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Trade finance and SMEs – Bridging the gaps in provision

The World Trade Organisation (WTO) has released a new study focusing on SMEs’ lack of access to trade finance, providing a list of recommendations to address the gap.

WTO Director-General Roberto Azevêdo has issued a call for action to help close the gaps in the availability of trade finance that affect the trade prospects of small and medium-sized enterprises (SMEs), particularly in Africa and Asia. In a new WTO publication, “Trade Finance and SMEs: bridging the gaps in provision”, which examines the problem and looks into possible solutions, DG Azevêdo says that easing the supply of credit could have a big impact in helping small businesses grow and in supporting the development of the poorest countries.

WOT Report May 2016

The WTO’s strategy focuses on three fronts: firstly, encouraging global financial institutions to stay engaged, ensuring that regulations are not prohibitive; then, enhancing local financial institutions’ capacity to supply trade finance to SMEs; finally, supporting multilateral development banks’ programmes increasing the availability of trade finance.

A six-point recommendation list tackles additional issues, from enhancing existing multilateral banks’ trade finance facilitation programmes, to closing the trade finance knowledge gap, strengthening training programmes, as well as maintaining a closer dialogue with regulators and improving monitoring of trade finance provisions. The report also suggests that setting specific targets could help in mobilising and co-ordinating efforts to improve SMEs’ access to trade finance. Source: smefinanceforum.org

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How to increase the positive impact of trade on rural development

Trade is a means by which poor countries can leverage economic growth, reduce their levels of poverty and even meet the SDGs. For example, SDG 2 on ending hunger and food insecurity points towards correcting and preventing trade restrictions and distortions in world agricultural markets as an indicator towards its achievement. Trade has furthermore emerged as a means to finance development – a position catalyzed by significant reductions in ODA by traditional donors – as it was featured in the FFD3 outcome document.

As part of the Platform’s growing work on trade in agriculture and rural development (ARD), the Annual General Assembly, held on 20th January, posed the following question participants: Are agricultural trade and rural development playing a duet or a solo? This is because the governance issues surrounding agricultural trade lead to a number of debates, particularly surrounding how trade can work better for smallholder farmers and even how trade could help deliver food and nutrition security. Overarching such discussions is one on which instruments and support mechanisms exist and offer practical solutions and opportunities?

A panel session during the AGA discussed a number of institutional and legal opportunities to increase the positive impact of trade in ARD. The main messages, according to each panelist, were:

Christophe Bellman (ICTSD) spoke about the critical role trade flows that legally binding trade agreements play in allowing frameworks that make sure trade flows happen easily and remove distortions. We must ask ourselves what trade restrictions are legitimate, as it is not just about liberalization.

Three main priorities for food security are:

  1. Policy instruments to deal with excessive price volatility and make sure your population can access food.
  2. Consciousness about the impact of policies to support national food production. Countries want to ensure productivity, but how does this affect other (poor) countries?
  3. Market access, reducing tariffs and Sanitary and Phyto-Sanitary (SPS) measures. There needs to be a realization of which of these measures are legitimate and which may be disguised protectionism.

The topic of Sanitary and Phyto-Sanitary (SPS) measures and technical standards was discussed in more depth by COMESA representative Martha Byanyima, because in the majority of COMESA countries, agriculture is still a leading economic activity. Protection of plants and animals from pests and invasive species ensures food and nutrition security and prevents diseases.

SPS regulations on countries have to speak to international trade, but also ensure they serve domestic needs as well. Some overarching debates remain on the harmonization of standards, whether they should be harmonized towards international or regional standards. COMESA believes that there should be direct support to regional SPS and Standards programmes under regional integration. For this, it is essential to enhance the institutional capacities of African institutions charged with CAADP implementation (AUC, NEPAD, RECs). Linking these efforts to country level actions will ensure that trade/customs reforms and investments are directly supporting initiatives to enhance food and nutrition security.

The Enhanced Integrated Framework (EIF) for Trade-Related Assistance supports the Least Developed Countries supports (LDCs) to better integrate into the global trading system and to make trade a driver for development. EIF representative Ratnakar Adhikari described its functions which include mainstreaming trade into national development strategies, setting up new structures or strengthen existing institutions needed to coordinate the delivery of trade-related technical assistance and building capacity to trade, similar to some of the discussions covered by COMESA and ICTSD.

The EIF is a mix of traditional and emerging donors. It is managed through a trust fund which builds capacity for developing countries to contribute to the multilateral trade agreements. Third parties, such as GIZ, implement the programs.

Philippe Jacques from the European Commission spoke about the Aid for Trade (A4T) initiative, specifying that we may consider five areas as requiring priority attention under the A4T initiative for the agricultural sector:

  • Technology transfer and utilisation – one reason for the lack of agriculture competitiveness in developing countries is the low productivity land and labour, as well as the low adoption of new technologies by the vast majority of small and medium-scale farmers.
  • Rural infrastructures – the ability of the existing value chains to respond to new trade opportunities, as well as for the emergence of new value chains, is highly conditioned by the availability of adequate rural infrastructures.
  • Investment in water Management – in conjunction with the two factors mentioned before, it can offer pay-offs to public and private sector investment in agriculture
  • Technical standards of products – activities in this field are being completed within the framework of the WTO Agreements on SPS measures and Technical Barriers to Trade
  • Capacity for trade negotiations and trade policy Analysis – in addition to multilateral trade negotiations, most countries have engaged or concluded trade negotiations at regional, bilateral and preferential levels. That places a significant burden on the capacity needs to be built in order to implement these agreements, for responding to trade disputes and for adopting and complying with rules and standards.

Source: https://www.donorplatform.org/about/aga/latest/1523-how-to-increase-the-positive-impact-of-trade-on-rural-development

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WTO and UNCTAD commit to further help poor countries integrate into the global economy

Geneva, 12 October 2015 (UNCTAD) – The World Trade Organization (WTO) and the United Nations Conference on Trade and Development (UNCTAD) have pledged to work together towards the integration of developing countries, especially the least-developed among them, into the world economy and the multilateral trading system. WTO Director-General Roberto Azevêdo, and UNCTAD Secretary-General Mukhisa Kituyi signed a joint declaration, as they marked the twentieth anniversary of the WTO at its headquarters in Geneva on 12 October. The agreement further strengthens the collaboration between the UNCTAD and WTO in key areas of their work, and builds on Memoranda of Understanding signed by the organizations in 2003 and 2013. UNCTAD and the WTO believe that trade should play a key role in supporting the implementation of the outcomes of the Third International Conference of Financing for Development, in the achievement of the global Sustainable Development Goals and, above all, in fostering inclusive […]

Geneva, 12 October 2015 (UNCTAD) – The World Trade Organization (WTO) and the United Nations Conference on Trade and Development (UNCTAD) have pledged to work together towards the integration of developing countries, especially the least-developed among them, into the world economy and the multilateral trading system.

WTO Director-General Roberto Azevêdo, and UNCTAD Secretary-General Mukhisa Kituyi signed a joint declaration, as they marked the twentieth anniversary of the WTO at its headquarters in Geneva on 12 October. The agreement further strengthens the collaboration between the UNCTAD and WTO in key areas of their work, and builds on Memoranda of Understanding signed by the organizations in 2003 and 2013.

UNCTAD and the WTO believe that trade should play a key role in supporting the implementation of the outcomes of the Third International Conference of Financing for Development, in the achievement of the global Sustainable Development Goals and, above all, in fostering inclusive economic growth for poverty alleviation.

The organizations plan to reinforce their cooperation on issues such as trade related-technical assistance, trade facilitation, trade and investment, debt and finance, global value chains, commodities, standards, non-tariff measures, and e-commerce, as well as the establishment of a Geneva Trade Statistics Hub.

Dr. Kituyi said: “The signing of this declaration will deepen our collaboration in helping the least developed countries. As we celebrate twenty years of achievement, we recognize that many least developed countries are still commodity dependent, which therefore exposes them to the vulnerabilities of the boom and bust cycle.”

Mr. Azevêdo said: “Our organizations share a common goal of helping developing countries, and especially the least-developed countries, integrate into the global economy. This declaration reaffirms and strengthens the collaboration of our two organisations to keep on promoting trade as a tool for development.”

After the signing ceremony, Dr. Kituyi and Mr. Azevêdo jointly opened the event Twenty years of supporting the integration of least developed countries into the multilateral trading system (https://www.wto.org/english/tratop_e/devel_e/ldcwtoat20-121015_e.htm) which looked at the key developments and decisions taken in favour of the 48 least developed countries (LDCs), the institutional support provided and the trade capacity-building initiatives put in place. Participants also discussed how the international community could help the LDCs better integrate into the multilateral trading system.

Background

UNCTAD was formed in 1964 to help poor countries adopt policies that would integrate them into the world economy and boost prosperity. UNCTAD is based at the United Nations Office at Geneva, Switzerland, and has representative offices at the United Nations in New York and in Addis Ababa, Ethiopia. It works at the behest of 194 member States and employs 500 people.
The WTO deals with the global rules of trade between nations. Among its main functions, it ensures that trade flows as smoothly, predictably and freely as possible.

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Asia is more integrated, but future cooperation will be a complex task

Asia Integration MonitorMANILA, PHILIPPINES – Asia has become increasingly integrated over the past decade, led by growing trade and tourism and, most recently, as the region faced down the global financial crisis and subsequent eurozone crisis, according to a new integration index published in the Asian Development Bank’s (ADB) latest Asian Economic Integration Monitor (http://www.adb.org/publications/asian-economic-integration-monitor-march-2013).

“Going forward, greater integration will be harder won as the remaining areas of cooperation are more complex,” said Lei Lei Song, Principal Economist in ADB’s Office of Regional Economic Integration. “Asia needs to avoid complacency and continue to work together in this post-crisis period.”

The report warns that the struggles of the eurozone and the fear of the contagion that accompanies greater integration could give Asia’s policymakers pause as they assess the way forward for their region.

The index, which monitors foreign direct investment, capital markets, output correlations, trade, and tourism across Asia, shows the level of integration rising from a base level of 100.00 in 2001 to a peak of 233.27 in 2010, when the region was collectively bracing itself against the eurozone crises. Preliminary data for 2011 shows the level of integration tapering off slightly to 192.22, still much higher than in 2007 when the global financial crisis was just beginning.

The biannual Asian Economic Integration Monitor notes that in addition to growing intraregional trade and tourism, capital markets have also become tighter knit. During the crises, cooperation stepped up a notch: ASEAN+3 countries acted in concert to expand the Chiang Mai Initiative Multilateralization, their regional financial safety net; India offered to finance a South Asian equivalent; and several countries expanded bilateral currency swap arrangements.

However, financial integration and labor mobility have lagged. There is a huge need for more national and cross-border infrastructure. And even on trade, there is much work to be done to deepen integration.

Tariffs have come down but other barriers to trade, such as border administration, are significantly constraining greater integration. Intraregional trade in services also faces many impediments. The impact of regional trade blocs such as the upcoming Trans Pacific Partnership and the Regional Comprehensive Economic Partnership is still unclear. They could compete or they may provide the building blocks for a global trade agreement.

The report’s theme chapter points to the need to unravel the profusion of overlapping free trade agreements. As of January 2013, Asia had 109 free trade agreements, up from only 36 in 2002, with another 148 in various stages of development. This plethora of agreements is both complex and costly for exporters to navigate and Asia should work to multilateralize the agreements to make the best bilateral agreements applicable to other trade partners.

More multilateralized agreements like the ASEAN Free Trade Area, which involves a growing number of countries in and outside of Asia, would increase global trade, and thus income gains, in the absence of a global trade deal, the report says.

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Small & Medium African Companies Engaged in International Markets Prosper in ‘Global Village’ | DHL Study

Study shows that internationally-focused SMEs are twice as likely to be successful as those only operating domestically CAPE-TOWN, South-Africa, February 4, 2013/ — International trade and cooperation has become a key driver of small business success according to an in-depth and wide-ranging DHL Express study by IHS, the leading global source of information and analytics. The macro-economic analysis and survey of 410 SME directors in G7 and BRICM¹ economies reveals that SMEs engaged in international markets are twice as likely to be successful as those that only operate domestically². Of the SMEs surveyed, 26% of the companies that were trading internationally significantly outperformed their market, in contrast to only 13% of those with operations only in their home country. SMEs cited the key benefits of this international approach as the access to new markets that it provides them with, as well as access to know-how and technology, and diversification of […]

Study shows that internationally-focused SMEs are twice as likely to be successful as those only operating domestically

CAPE-TOWN, South-Africa, February 4, 2013/ — International trade and cooperation has become a key driver of small business success according to an in-depth and wide-ranging DHL Express study by IHS, the leading global source of information and analytics.

The macro-economic analysis and survey of 410 SME directors in G7 and BRICM¹ economies reveals that SMEs engaged in international markets are twice as likely to be successful as those that only operate domestically². Of the SMEs surveyed, 26% of the companies that were trading internationally significantly outperformed their market, in contrast to only 13% of those with operations only in their home country. SMEs cited the key benefits of this international approach as the access to new markets that it provides them with, as well as access to know-how and technology, and diversification of their products or services.

Growing focus on promoting Africa’s international trade

The results ring true for SMEs within Africa, which are increasingly being recognized as drivers of economic growth in these countries. While no data is available around the number of SMEs operating on the continent, they make up over 90% of formalized business within countries like Ghana and South Africa, and are an important area of development within the continent.

“The results of this study are reflected in the outlook for SME’s in Africa,” comments Charles Brewer, Managing Director for DHL Express Sub-Saharan Africa. “The possibilities opened up by new technologies, the Internet, and modern transportation means that there are many foreign trade opportunities out there for African businesses. With thorough research and a well-defined strategy, local SMEs can successfully expand into new markets, compete with larger companies, and use their size and nimbleness to their own advantage,” concludes Brewer.

The research also reveals an increasing pace of globalization and a sharper international focus among smaller businesses, with SMEs that were founded in the last five years more likely to have international business operations than older SMEs, despite having had less time to grow their businesses. Significantly, the majority of SMEs who had out-performed their markets over the last three years indicated that they also planned to increase the percentage of exports in their turnover over the next three years, despite the uncertain economic environment.

20th century infrastructure, high customs duties and an information gap on international trade’ present SME stumbling blocks

The report does however highlight that inadequate business infrastructure is constraining competitiveness by reducing business efficiency, and that SMEs are having to work harder to overcome infrastructure inefficiencies, particularly compared to larger companies with greater resource. SMEs biggest concerns relating to international trade are a lack of available information on foreign markets, high customs duties and the difficulty of establishing contacts with foreign partners and an overseas customer base. Most of the better-performing SMEs identified in the study employ over 50 people, underscoring the importance of resource in overcoming barriers to international growth.

“There are clearly still some hurdles that remain for small businesses with global aspirations, but we are delighted to see that more and more SMEs are looking at the fantastic opportunity that international trade represents,” said Ken Allen, CEO, DHL Express. “Our mission as a global logistics company is to make this process more efficient, and we will continue to tailor our services and solutions to help SMEs grow and compete in the global village.”

The IHS and DHL Express report, Internationalisation – a driver for business performance, can be accessed at http://www.dp-dhl.com/content/dam/presse/pdf/2013/sme-competitiveness-study.pdf.

Notes

All figures, unless otherwise stated, are from a study by IHS conducted between September and November 2012. The research was commissioned by DHL Express and incorporated analysis of IHS proprietary data, recent studies of SMEs and an online survey of 410 employees, director-level and above, at small and medium sized enterprises in G7 countries and in Brazil, Russia, India, China and Mexico. The study focuses entirely on businesses with between 10 and 249 employees and an annual turnover of less than €50 million. As such, it excludes ‘micro enterprises’ with fewer than 10 employees.

¹ BRICM means Brazil, Russia, India, China and Mexico
² Based on three-year average annual growth rates, IHS and DHL Express research, September – November 2012.

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“Made in the world”| Measuring Trade in Value Added: An OECD-WTO joint initiative

Global value chains (GVCs) have become a dominant feature of today’s global economy. The proliferation of internationally fragmented production, driven by technological progress, cost, access to resources and markets, and trade policy reforms, challenges our conventional wisdom on how we look at and interpret trade statistics and, in particular, the policies that we develop around them. Traditional measures of trade, that record gross flows of goods and services each and every time they cross borders, may not accurately reflect modern trade patterns and could, if taken alone, lead to ill-informed policy decisions. To help address this issue, the OECD and WTO announced a joint initiative agreed to develop a database of Trade in Value Added indicators and to mainstream their production within the international statistics system. Better understanding global trade flows Database content The first release of OECD-WTO TiVA database presents indicators for 40 countries (all OECD countries, Brazil, China, […]

Global value chains (GVCs) have become a dominant feature of today’s global economy. The proliferation of internationally fragmented production, driven by technological progress, cost, access to resources and markets, and trade policy reforms, challenges our conventional wisdom on how we look at and interpret trade statistics and, in particular, the policies that we develop around them. Traditional measures of trade, that record gross flows of goods and services each and every time they cross borders, may not accurately reflect modern trade patterns and could, if taken alone, lead to ill-informed policy decisions.

To help address this issue, the OECD and WTO announced a joint initiative agreed to develop a database of Trade in Value Added indicators and to mainstream their production within the international statistics system.

Better understanding global trade flows

Database content

The first release of OECD-WTO TiVA database presents indicators for 40 countries (all OECD countries, Brazil, China, India, Indonesia, Russian Federation and South Africa) covering the years 2005, 2008 and 2009 and broken down by 18 industries. Indicators in the database include:

– Decomposition of gross exports by industry into their domestic and foreign content.
– The services content of gross exports by exporting industry (broken down by foreign/domestic origin)
– Bilateral trade balances based on flows of value added embodied in domestic final demand
– Intermediate imports embodied in exports

Accessing the database

The OECD-WTO TiVA indicators are available from OECD’s online statistics service OECD.STAT and through WTO’s portal at www.wto.org.

Weitzenegger’s Statistics Spider at http://statistics.weitzenegger.de also covers the TiVA indicators.

Global value chains and going beyond trade in value added

Taking into account the origin of value added is only the beginning of the OECD’s work in this area. A comprehensive report on the policy implications of GVCs will be released for the OECD Ministerial meeting in May 2013, covering trade policy, investment policies and other domestic policies aimed at drawing the benefits from engagement in global value chains. Much of the evidence that will feed into this work will draw on the underlying Statistical Information System (global input-output database) developed to produce the TIVA database, and so, further indicators can be expected in a number of areas in the coming years. Two important areas in this respect concern ‘trade in jobs and skills’, where indicators will begin to be rolled out for some countries later this year and over the longer term; and how income (profits) generated from trade flows, in particular how income generated via knowledge based assets, is further distributed between affiliate companies will also be explored. The Statistical Information System also lends itself to the calculation of indicators in a number of other areas such as carbon footprints, where the OECD will look to update its earlier results, notably as part of the OECD Green Growth Indicators.

Source: http://www.oecd.org/trade/valueadded

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Intra-African trade restrictions impact regional trade cooperation, Report says

KIGALI, Rwanda, 1 November 2012 (ECA) – Countries should correct systemic restrictions on the length of intra-African export relationships in order to deepen regional trade cooperation among African countries, says a paper presented today at the African Economic Conference which opened in Kigali on Tuesday.

During a discussion led by Dr. Adam Elhiraika, Chief of the Macroeconomic Section at the UN Economic Commission for Africa (ECA), the author of the paper, Dr. Dick Nuwamanya Kamuganga of the Graduate Institute of International and Development Studies (Geneva) outlined some of the restrictions, according to ECA’s Information and Communication Service. These include trade costs, negative policy shocks, informational and bureaucratic frictions as well as institutional weakness, he said. “I also find evidence that financial depth, poor institutions and conflicts do increase hazard rates for African exports”, he added.

Dr. Kamuganga suggests that African export trade relationships have a very short life, with the median duration of exporting a product just 1 year and average length of 2.08 years. The paper argues that, because” sustainable export expansion is a key priority for all African countries to achieve sustainable economic growth”, regional trade cooperation initiatives in Africa have non–negligible effects on enhancing Africa’s export survival. It also states that the depth of regional integration matters on lowering Africa’s export hazard rates relative to countries that are not in any regional cooperation. The paper explains how interaction effects between regional integration and a variety of trade costs such as the time to export and customs procedures tend to diminish with the depth of regional integration, over time. It explains that factors such as costs to export, transit delays, procedures to export, financial depth and institutional and policy biases against exports increase the probability of export failure in all African regional groups.
The author proposes that an intra-African trade strategy that seeks to increase and sustain export growth rates should comprise elements that can enhance regional trade cooperation efforts “since the results show that regional trade cooperation depth is a non–negligible driver of Africa’s export survival”. To buttress his proposition he says ”monetary unions have a relatively higher survival rates and bigger effects on hazard rates than that of the Common Market, which in turn have bigger effects than those of the Customs Union, and which in turn have bigger effects than those of a Free Trade Area”.

In answer to a question on whether regional trade cooperation enhances Africa’s export relationship survival, Kamuganga says that intra–regional trade cooperation in Africa reduces significantly the effects of a number of these trade friction. This implies that deeper and increased trade cooperation would sustain Africa’s export expansion, he argues.

“This evidence suggests that export costs, cost of doing business, border and transit delays have non–negligible effects on the hazard rates of African exports. However, their effects are reversed when I interact these variables with the regional integration variables”, Kamuganga adds. He also suggests that “policy focusing only on entry into exporting will miss a fundamental aspect of the dynamics of exporting”. “A strategy that seeks to increase and sustain export growth rates should address constraints to export survival both at the extensive and intensive margin of African trade”, the paper concludes.

Intra-African trade has long been an important area for fostering the integration and development of Africa. This is why the UN Economic Commission for Africa (ECA) established the African Trade Policy Centre (ACPC), which is a lead think-tank on trade policy on the continent. It recently organized the 2012 edition of the now yearly African Trade Forum under the theme: “Accelerating intra-African trade and enhancing Africa’s participation in global trade”.
The African Economic Conference is convened annually by the Economic Commission for Africa (ECA), in collaboration with the African Development Bank, (AFDB) and the United Nations Development Programme (UNDP). The theme for the 7th session which ends in Kigali on Friday 2 November 2012 is Inclusive and Sustainable Development in an Age of Economic Uncertainty.

Source: ECA Information and Communication Service, Addis Ababa Ethiopia, ECA Press Release 185/2012

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OECD countries reaffirmed commitments to open trade and aid

OECD countries have pledged to abstain from trade protectionism as part of a concerted drive to shore up the world economy and combat recession. They also have reaffirmed their commitments on aid to developing countries. Already in November 2008, at a meeting of the OECD’s Executive Committee in Special Session, OECD countries agreed to sustain recent commitments regarding open trade in support of developing nations, promising, ”Within the next twelve months… [to] refrain from raising new barriers to investment or to trade in goods and services, imposing new export restrictions, or implementing World Trade Organization (WTO) inconsistent measures to stimulate exports.” They also committed to making efforts to close the Doha trade negotiations, reaching agreements that would lead to ”an ambitious and balanced outcome.”
http://www.oecd.org/dataoecd/32/41/41836868.htm#H51