A Work in progress: Trade for development

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After its launch last month, work is starting on realising the ambitions and commitments of the government’s White Paper on Trade and Investment for Growth.

One of its three overarching objectives is to help developing countries benefit from increased trade and investment and to make the global economy work for the world’s poorest people. And there is certainly an impressive line-up of nearly two-thirds of the sixty-two listed commitments relating to “working with the developing world”. Many of them are also things that CAFOD has supported in the past, for example:

  • Ensuring that Europe’s Free Trade Agreements take into account the differential stages of development of partner countries
  • Making better use of impact assessments and improving transparency in EU decision-making around trade
  • Supporting the interests of least developed countries in World Trade Organisation’s Doha Round
  • Providing duty free, quota free entry to goods for least developed countries into G20 markets, as well as maintaining aid for trade spending levels.

Behind the headlines, however, there is much to be done to deliver these commitments and a more detailed programme of action to design. There is also a cause for concern that during this implementation, best intentions might not translate into best results for the poorest farmers and small business owners.

This concern derives from the over-emphasis on the role of boosting exports and growth as the route to and barometer of development. Wrong objectives matter because they can lead to wrong choices. Take the increasingly well-documented example of expanding Peru’s agricultural exports. If growth, exports, even diversification are your main objectives, the production of asparagus in the Ica Valley is a success. However, as reported by Progressio, if you are in one of the communities or estimated 18,500 small-scale farmers already affected by the consequent drying up of well-water, the development impact is less impressive.

Quality of growth matters. Most poor countries need growth and more exports, but in a way that benefits the poorest and does not damage communities or the environment.

Returning to the government’s trade agenda, this means that – to wheel out a well-worn policy cliché – the devil is in the detail. How commitments are implemented really matters.

It is not enough to conclude the Doha round in its current form to forestall protectionism. Correcting real problems in the current talks as well as in the EU’s regional trade agreements, for example by ensuring agricultural safeguards that work for small farmers, is essential.

Impact assessments need to disaggregate impacts to reflect the broader and more complex impacts of trade on development. What are distributional impacts on the small-scale, poor parts of the economy? What are the social impacts, impacts on women and on the environment?

Providing better access to G20 markets and using aid for trade commitments only to facilitate trade across borders, will not necessarily help the poorest businesses who are not in a position to export. Removing the export bias, to specifically target their needs and to help to develop local markets must also be part of the picture if they are not to be disadvantaged or sidelined.

The White Paper can be a good, if flawed, start to putting the poor at the heart of the trade agenda. CAFOD welcomes the government’s commitment to making trade work better for the poorest, and to seeing this realised in fora such as the EU, WTO and G20. We also welcome the opportunity it raises to contribute to this important policy debate.

By Tina Weller

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