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Learning about the Trade and Economic Growth paradigm
18-20 July 2012, New York, USA—The New York Office, in collaboration with the World Trade Organization (WTO), organized a Seminar on International Trade Law and Policy.
The Seminar, held at the Permanent Mission of Malaysia to the United Nations, gathered participants from the diplomatic community, the United Nations and other Governmental Organizations.
Mr. Maarten Smeets (Chief of Section, Institute for Training and Technical Cooperation, WTO), who provided a comprehensive review of the functioning of the International Trading System, highlighted WTO’s main objective: trade liberalization – one of the strongest components for economic growth.
To this end, Professor Thomas Prusa (Department of Economics, Rutgers University) remarked on the significance of the multilateral trade system, through which the WTO system facilitates negotiations and oversees complex and legally binding rules.
The benchmarks of the WTO system include: the principles of non-discrimination and reciprocity, transparency and predictability/stability. Further, States convene in the WTO negotiating Rounds to discuss how to decrease global protectionism and tariffs. The last Round, known as the Doha Development Agenda –DDA-, however, did not achieve the progress anticipated, as States barely agreed on the critical agenda topics, e.g. agriculture, trade facilitation and dispute settlement issues.
During tough economic times, states sometimes opt for more protectionist measures which paradoxically constrict economic growth. Professor Prusa underscored that in contrast to the Great Depression (1930), States in response to the Great Recession (2008) did not increase protectionist policies, enabling for international trade to spawn growth. Nonetheless, as Mr. Smeets pointed out, 3% of the global trade takes place under protectionist measures (mainly using Non-Tariff Measures -NTMs), and he predicted that an increase in this trend can slow down the international trade flow and affect economic growth. Along with NTMs, other commonly used mechanisms are the Temporary Trade Barriers (gathering mainly anti-dumping measures, together with countervailing duty, global safeguards).
Incomparison to multilateral trade, Professor J.H.H. Weiler (Director, Jean Monnet Center for International and Regional Economic Law and Justice, New York University School of Law) discussed Regional Trade Agreements (RTA) and the implications for WTO’s principle of most-favored nation. He pointed out that RTAs offer benefits in fostering international trade principles, while also positively influencing inter alia regional political stability and social integration. Mr. Smeets further added that, because of a current lack of agreement in the multilateral negotiation Rounds (as the DDA); States are moving into regional/bilateral trade agreements, which promote the ideals of trade liberalization.
Ms. Tacko Ndiaye (Policy Adviser on Economic Empowerment, UN Women) instructed on implications for gender in the international trade policy. Last April 2012, UNCTAD XIII Conference, for the first time, dedicated a panel to trade and gender. Despite this progress, WTO agreements barely use gender impact assessments. Also, Informal Cross Border Trade (ICBT), in which women are often involved, is widely neglected in WTO negotiations. In this sense, aid for trade should target informal trade and positively impact women.
According to Luciana Mermet (Policy Specialist, Trade and Human Development at the Poverty Group, Bureau for Development Policy, UNDP), the current state of the Least Developed Countries (LDCs) within the international trade sphere remains weak. Since 2008, the total share of LDCs in world’s exports represents 1%, affecting their bargaining power in trade negotiations. Unfortunately, the 2011 WTO Ministerial Conference didn’t include an expected LDCs package.
Mr. Kevin Cassidy (Communications and External Relations Officer, ILO New York) discussed the relation of employment and international trade. He emphasized that trade negotiations need to include employment and social policies (including environment); social inequalities are not addressed through only economic growth. Further, trade unions have been losing their bargaining power, because trade liberalization, per se, does not foster greater employment and social justice.
Finally, Dr. Wei Liu (Economic Affairs Officer, Policy Analysis and Network Branch. Division for Sustainable Development, UN-DESA) pointed out how the international community needs more signals and clarity from the WTO regarding trade and sustainable development goals. Further, in terms green economy and trade - “there is a need to rebalance WTO rules to ease the transition for developing countries to obtain a greener economy”.