Integrating into the global economy requires both trade policy reform and trade facilitation improvement. Trade policy can include accession to the WTO and often also to regional or bilateral agreements, and then compliance, in order to create trade opportunities. Trade facilitation is needed in order to implement these agreements – making customs and other bureaucracies on the ground at and behind borders work more effectively so traders can more freely import and export. And then, to take advantage of these opportunities, a country’s firms need to step to the plate. Firms need to find new customers in new markets, improve their production processes, and often meet new standards dictated by new markets. IDG can help with all three stages of these processes. As more and more countries have put into place various trade agreements, the second and third stages of trade facilitation and firm-level activity become increasingly important. These will be key areas in the next several years despite recent bumps in the road for the WTO Trade Facilitation Agreement.
Inclusive growth strategies in the context of regional and global integration depend on the opening of markets to trade and investment and the adaptation of economies to these circumstances. Frameworks for legal and institutional reform enable investment, tech transfer, SME growth and exports. Within these there are specific constraints to trade and investment which must be addressed. These include the institutional capacity for transition to a market economy - including fiscal and monetary policy reforms, participation in international trade agreements, financial and investment support institutions, economic and financial information gathering, market analysis and reporting systems, product harmonization with international standards and management systems, entrepreneur capacity, marketing experience, and market preparedness including tech transfer, education, and training. Many developing countries remain on the margins of global economic integration, institutionally and legally incapacitated from attracting trade and investment because of the constraints mentioned above. Foreign assistance aimed at facilitating trade will seek to make improvements in these areas.
Illustrative activities adopted by IDG to promote trade include supporting government ministries and non-governmental think-tanks for trade-related research (revealed comparative advantage and Balassa indexes, DRC, CBA, trade flow modeling, anti-dumping analysis, revenue impact assessment); analysis of institutional and regulatory issues affecting trade and investment; collaborative approaches to trade expansion including public-private partnerships; trade corridors and transit cost analysis and policy assistance with investment promotion and design and pro-investment legislation.
Trade Facilitation
The WTO has defined trade facilitation as simply the simplification and harmonisation of international trade procedures--activities, practices and formalities involved in collecting, presenting, communicating and processing data required for the movement of goods in international trade. This often includes customs administration, general issues of corruption and transparency, removal of other non-tariff trade barriers, and the related issue of standards. Trade facilitation also can include issues of transportation, infrastructure, and trade finance. IDG has worked in many of these areas in recent years, including in Azerbaijan, Lesotho, Somaliland and Tunisia.
Bilateral and Regional Trade Agreements and WTO Accession
A top priority will continue to be assistance with WTO accession issues including adoption of laws and compliance with standards, as well as assistance with conclusion and implementation of bilateral and regional trade agreements.
IDG can provide advisory services to promote policies for improved trade environment, including regional trade agreements and WTO accession. IDG can assist governments with key legislation and implementing rules and regulations necessary to comply with WTO systemic requirements (SPS, TBT, TRIPS, Customs, GATT, Import licensing, and trade remedies) to achieve successful WTO accession.
Sanitary and Phyto-Sanitary (SPS) Standards: Technical Barriers to Trade (TBT)
Trade agreements require knowledge beyond economics, including knowledge of biology and environmental science, in order to institute appropriate sanitary and phyto-sanitary standards to protect fragile and isolated ecosystems. These policy and administrative issues surrounding trade require capacity at the government level that is absent in many countries; more troubling, many countries enter into trade agreements with little knowledge of their actual obligations, and need to be educated on what is necessary to remain in compliance with major trade bodies such as the WTO. Addressing these capacity constraints will continue to be a key priority to activities promoting WTO compliance and other trade integration objectives. IDG can provide advisory services in technical issues related to trade, including intellectual property rights, technical barriers to trade, sanitary & phyto-sanitary measures, and standards and metrology.
Intellectual Property Rights
Protection of intellectual property rights is critical in developing countries to ensure access to new technologies and to promote private-sector growth. Such protection not only is often an obligation for countries as signatories to multilateral trade agreements but also is important for domestic producers of intellectual property. IDG can assist in drafting law and regulation consistent with international standards and obligations; advocacy to build local support for such protections; public education on such law and regulation once adopted; and training to commercial courts in enforcement.
Projects
Ukraine Trade Policy Project (TPP): To expand export opportunities for Ukraine’s private sector and promote the diversification of the country’s export markets, IDG increased Ukraine’s ability to prevent and address foreign trade pressures by increasing the country’s capacity to utilize tools available through the World Trade Organization (WTO) system, improving communication and coordination on WTO issues within both the Government of Ukraine (GOU) and with external stakeholders, and assessing and improving Ukraine’s WTO compliance.
Azerbaijan Competitiveness and Trade Project: In Azerbaijan, IDG worked with the Government of Azerbaijan in meeting international trade and investment standards and implementing relevant legislative changes; assisting the process for acceding to the World Trade Organization; and supporting government and civil society in quantifying the impact of international trade reforms. Project activities included harmonizing food safety standards in Azerbaijan with Codex Alimentarius and IPPC (International Plant Protection Convention) standards to improve compliance with international safety requirements and quality standards and developing a harmonization and conversion plan for conversion mandatory requirements to technical regulations and voluntary standards. The project supported the establishment of a food safety system beyond just food security, which includes, for example, building capacity of food agencies. IDG also worked to draft regulations needed for the implementation of a Customs code, which establishes a model framework for customs activities in the country and is in line with World Customs Organization and WTO provisions.
Lebanon Tripoli Special Economic Zone Project: IDG completed the Tripoli Special Economic Zone (TSEZ) Project entailed drafting a feasibility study and master plan for a Special Economic Zone in Lebanon’s northern city of Tripoli, with the intent of facilitating job creation in an important part of the country outside the capital city. The TSEZ seeks to reduce barriers to doing business and to enhance collaborative opportunities for investment and export-led growth. The multi-faceted project undertaken by IDG provided assistance in four crucial technical areas of trade and investment: 1.Creating a legal and regulatory environment within the TSEZ jurisdiction conducive to doing business, including measures to facilitate trade and investment; 2.Analyzing the market and demand for investment, including investment and trade flows, and conducting a financial and economic feasibility analysis of the Zone; 3.Assessing the infrastructure, environmental, and engineering aspects of the zone and designing appropriate infrastructure and facilities necessary for its success, including costs and detailed planning; and; 4. Increasing business facilitation services to the business community to drive collaborative approaches to investment in the port city of Tripoli.