Ref. :  000004804
Date :  2002-09-27
Language :  English
Home Page / The whole website
fr / es / de / po / en

Rich Countries Should Show the Way on Trade

World Bank Urges Action to Further Open Markets to Developing Countries

WASHINGTON, Sept. 27, 2002 -- Rich countries should support developing countries' efforts to reduce poverty and build more prosperous and stable societies by removing obstacles that hinder poor countries' participation in world trade, World Bank Chief Economist Nicholas Stern said today during a press briefing ahead of this weekend's World Bank/IMF Annual Meetings.

"Improving market access for developing countries is one of the most important steps that the rich countries could take to help fight global poverty," said Stern, who is also the Bank's senior vice president for development economics. "It is hypocrisy to encourage poor countries to open their markets while imposing protectionist measures that cater to powerful special interests. Rich countries should lead by example."

Barriers to developing countries' exports to high-income countries include tariff peaks and quotas, massive agricultural subsidies, anti-dumping actions, restrictive rules of origin, and product standards that are applied arbitrarily and bureaucratically, sometimes as disguised protectionism. Developing countries also pursue protectionist polices that impede their own growth and poverty reduction, as well as hurting their developing country trading partners.

Stern said that trade reform, like reform more generally, should result in resources moving from lower productivity uses to higher productivity uses. This creates new opportunities but also, inevitably, some dislocation "These transitions take time and need to be managed carefully. People must be supported in finding the new opportunities that the reform creates," he says. This is true in all countries, but rich countries are better able to afford the transition costs, he added.

Many policy makers in high-income countries understand these issues and have proposed measures to further open their markets. But progress has been too slow. "Now is the time for action," Stern said.

Uri Dadush, director of the new World Bank Trade Department, said that the high income countries have taken important steps in opening their markets, especially to the poorest countries. "But there also have been setbacks and some important problems have yet to be addressed," he said. The department was established recently to integrate the Bank's stepped up activities in support of developing countries' efforts to boost trade.

Dadush said that Europe's Everything But Arms initiative, the U.S. Africa and Growth and Opportunity Act, and other initiatives by Japan, Canada, New Zealand and Norway, have significantly improved market access for some of the poorest countries, but important problems remain. The Bank is encouraging rich countries to address these problems now, without waiting for the outcome of protracted negotiations through the World Trade Organization (WTO).

Gobind Nankani, vice president for the Bank's Poverty Reduction and Economic Management Network, said that action now by the high-income countries would encourage trade liberalization in the developing countries. "Developing countries find it difficult to understand why they should further open their markets when high-income countries persist with protectionism," he said.

Some of the problems that developing country exporters face in accessing markets in high-income countries are described in a new joint World Bank-IMF study, Market Access for Developing Country Exports—Selected Issues. The report says that despite recent initiatives in the major industrialized countries to offer preferential market access for the poorest countries "large pockets of protection remain in products of particular interest to developing countries."

Restrictive measures are often aimed at precisely those products that developing countries are best able to produce. For example, in the U.S. and Canada tariff peaks (tariffs much higher than the average) are concentrated in textiles and clothing; Europe and Japan have tariff peaks in agriculture products, food and shoes. "This pattern of protection creates hurdles for countries taking first steps up the technology ladder," the report says.

The report says that tariffs and quotas for textile exports to developed countries cost developing countries an estimated 27 million jobs. Every textile job in an industrialized country saved by these barriers costs about 35 jobs in these industries in low-income countries. Meanwhile, in the high income countries, tariffs on food and clothing raise prices for these goods, straining the household budgets of low-income families.
Escalating tariffs -- duties that are lowest on unprocessed raw materials and rise sharply with each step of processing and value added -- undermine manufacturing and employment in industries where developing countries would otherwise be competitive. These include many tropical crops, such as cocoa, coffee, and cotton.

The report says that agricultural subsidies in rich countries amounted to $311 billion in 2001. These subsidies, which go mainly to large agribusiness corporations, undercut poor farmers in developing countries. "Much of this support increases with the level of output, contributing to excess production that competes with developing country farmers for markets," the report says.

For example, African farmers are the lowest-cost cotton producers in the world but cannot compete with international competitors who receive $4.8 billion annually in subsidies. Sugar prices in the U.S. and Europe are three times higher than in the world market due to protection and subsidies for sugar beet production, to the detriment of Brazil and other tropical producers of cane sugar.

Meanwhile, regulations governing product standards and production processes "are becoming increasingly complex and burdensome" according to the report. For example, to meet EU standards, mango pulp processors in India not only must prove that their product meets quality standards, they must also keep detailed records of each delivery from the small farmers who grow the fruit.

Anti-dumping actions hit especially hard at small countries and small firms, who lack the means to prove in court that they are not selling at less than the cost of production. Worries about when these actions might be initiated, the high legal fees, and the uncertainty of the outcome discourage investment in otherwise promising industries in developing countries.

Trade barriers in developing themselves countries also pose a significant problem. Tariffs erected by developing countries cost developing country exporters about $57 billion per year, three times the duties paid to rich countries. And tariff peaks and anti-dumping actions are even more common in developing countries than in rich countries.

"Developing countries have done much to open their markets. Further liberalization will bring them additional benefits, regardless of whether the rich countries act. But the benefits will be much larger if rich countries lead by example, and the larger benefits would help poor countries to cope with the significant transition costs," Stern says.

The World Bank and other organizations are supporting developing countries in their efforts to liberalize their trade regimes and to remove infrastructure bottlenecks, for example, by improving internal transport, ports, and customs administration.

As part of this effort, the Bank has created a new Trade Department to integrate research and analysis, training programs and capacity building, and direct support to developing countries in reforming their trade regimes, meeting product standards, and addressing so-called behind-the-border issues, such as transport and telecommunications.

Rate this content
Average of 20 ratings 
Rating 1.50 / 4 MoyenMoyenMoyenMoyen
Same author:
 flecheThe 2017 Atlas of Sustainable Development Goals: a new visual guide to data and development
 flecheImproved water source (% of population with access)
 flecheDigital Dividends
 flecheIndigenous Latin America in the twenty-first century : the first decade
 flecheClimate-Driven Water Scarcity Could Hit Economic Growth by Up to 6 Percent in Some Regions, Says World Bank
 flechePrimary completion rate, both sexes (%)
 flecheWhere Are Forests Being Lost and Gained?
 flecheWaste Not, Want Not – Solid Waste at the Heart of Sustainable Development
 flecheImproving Food Security and Agricultural Productivity: A Priority for Burkina Faso
 flecheBreaking the Gender Earnings Gap
 flecheIndigenous Latin America in the twenty-first century
 flecheWhat challenges will Latin America face in 2016?
 flecheYear in Review: 2015 in 12 charts
 flecheNew $500 million initiative to boost large scale climate action in developing countries
 flecheHeads of State and CEOs Declare Support for Carbon Pricing to Transform Global Economy
 flecheImmediate Push on Climate-Smart Development Can Keep More than 100 Million People Out of Poverty
 flecheA New Approach to Cities: Everyone Counts
 flecheLeaders Unite in Calling for a Price on Carbon Ahead of Paris Climate Talks
 flecheWorld Bank Forecasts Global Poverty to Fall Below 10% for First Time; Major Hurdles Remain in Goal to End Poverty by 2030
 flecheSouth Asia Not Taking Full Economic Advantage of Urbanization
 flecheJobs Without Borders
 flecheAide à l’éducation : le Groupe de la Banque mondiale va doubler les financements axés sur des résultats pour les porter à 5 milliards de dollars au cours des cinq prochaines années
 flecheRemittances growth to slow sharply in 2015, as Europe and Russia stay weak; pick up expected next year
 flecheWorld Bank President Outlines Strategy to End Poverty, Welcomes New Development Partners
 flecheBrazil, Colombia and Peru are among the countries of the world with the most water
 flecheBreaking the Cycle of Chronic Poverty in Latin America and the Caribbean
 flecheClean Air and Healthy Lungs: How to Better Tackle Air Pollution
 flecheWho Gains and Who Loses from Plunging Oil Prices in the Middle East and North Africa Region?
 flecheGlobal Economic Prospects to Improve in 2015, But Divergent Trends Pose Downside Risks
 flecheFighting Climate Change & Poverty at the Same Time
 flecheWorld Is Locked into ~1.5°C Warming & Risks Are Rising, New Climate Report Finds
 flecheNew Evidence Highlights What Works to Empower Girls and Young Women
 flecheWomen Empowered by Solar Energy in Bangladesh
 flecheHappy Cows Help Save the Planet: Climate Smart Agriculture in Costa Rica
 flecheFood Price Watch, May 2014: First Quarterly Increase Since August 2012; The Role of Food Prices in Food Riots
 flechePoor Quality Education Holding Back South Asia, World Bank says
 flecheNew Study Adds Up the Benefits of Climate-Smart Development in Lives, Jobs, and GDP
 flecheHillary Clinton and Jim Yong Kim: Empowering Women & Girls Improves the World
 flecheWarmer World Will Keep Millions of People Trapped in Poverty, Says New Report
 flecheWhat Will It Take to Achieve Learning For All?
 flecheWorld Bank Urges Governments to Think Green for Inclusive Growth
 flecheDeveloping World Lags on Global Targets Related to Food and Nutrition, Says IMF-World Bank Report
 flecheWorld Development Report: Gender Equality and Development
 flecheDisclosure of Assets and Income by Public Officials Is Crucial to Curbing Corruption, Finds New StAR Study
 flecheGender Equality: the Right and Smart Thing to Do – World Bank Report
 flecheCitizen security, justice and jobs key to breaking cycles of political and criminal violence: World Bank report
 flechee-Atlas of global development launched by World Bank easy mapping with new data visualization tool
 flecheAdvancing food security in a changing climate
 flecheWorld Bank’s fund for the poorest receives qlmost $50 billion in record funding
 flecheNew report sees cities as central to climate action
 flecheWorld Bank-UN report charts path to prevent death and destruction from natural hazards
 flecheWorld Bank launches new tools to empower innovative solutions to development challenges
 flecheDeveloping countries come to the global economy’s rescue
 flecheProtecting land rights is key to successful large-scale land acquisitions
 flecheIntegrate water management, help countries on hydropower, says review of World Bank Group water strategy
 flecheCountries have opportunities to boost global investment competitiveness, finds World Bank Group
 flecheExperts: opening data will drive global knowledge
 flecheWorld Bank frees up development data
 flecheWorld Bank reforms voting power, gets $86 billion boost
 flecheGlobal trade logistics improving, but more needed to boost recovery
 flecheWorld Bank data now in Google search results
 flecheAdapting to climate change to cost US$75-100 Billion a year
 flecheDoing Business 2010: Governments set new record in business regulation reform
 flecheBangladesh: Who migrates overseas and is it worth their while?
 flecheHigh speed internet is key to economic growth and job creation in developing countries, says new World Bank Group report
 flecheCrisis reveals growing finance gaps for developing countries
 flecheRecovery rides on the 'G-2'
 flecheWorld Bank maps local and global economic geography, calls for greater integration
 flecheNew data show 1.4 billion live on less than us$1.25 a day, but progress against poverty remains strong
 flecheWater and Climate Change
 flecheBusiness Push Benefits Poor
 flecheDeveloping countries growth resilient in the face of financial turmoil and soaring food and energy prices
 flecheNew report sheds light on success strategies of fast-growing countries
 flecheGlobal monitoring report warns on MDG goals
 flecheDeveloping World greenhouse gas projects face carbon market bottlenecks
 flecheState and Trends of the Carbon Market 2008
 flecheIndia top receiver of migrant remittances in 2007, followed by China and Mexico
 flecheGlobalization requires education reforms in Middle East and North Africa, report says
 flecheReport "The road not traveled: Education reform in the Middle East and North Africa"
 flecheDeveloping countries to cushion rich-country slowdown in 2008
 flecheAfrica high on Japan’s agenda in 2008
 flecheIn search of clean energy to meet China’s needs
 flecheAfrica Development Indicators (ADI) 2007
 flecheSpreading and sustaining growth in Africa
 flecheThe human factor in re-engineering government
 fleche“Catalyzing the future: an inclusive & sustainable globalization” - Remarks of Robert B. Zoellick
 flecheWorld Bank Group Pledges $3.5 Billion for Poorest Countries
 flecheWorld Bank and UNODC to Pursue Stolen Asset Recovery
 flecheGlobal Monitoring Report 2007: Confronting the Challenges of Gender Equality and Fragile States
 flecheGreater Attention Needed to Gender Equality and Fragile States to Reach Global Targets by 2015, Says World Bank-IMF Report
 flecheGlobal Economic Prospects 2007: Managing the Next Wave of Globalization
 flecheGlobal Economic Prospects 2007: Managing the Next Wave of Globalization
 flecheWorld Bank Allocates Record Amount of Income For Poorest Countries

 flecheA Funding Call for Nutrition
 flecheSending The Money Home
 flecheInformation and Communications for Development 2006: Global Trends and Policies / World Bank
 flechePoverty reduction and growth : virtuous and vicious circles
 flecheLatin America Needs To Cut Poverty To Boost Growth
 flecheLe moment d'agir est venu
 flecheLatin America: A Need to Boost Spending on Infrastructure
 flecheA New Spark in Romania's Village Schools
 flecheThirty Years of Life in a Favela
 flecheNiger Receives Emergency Aid
 flecheWorking Together to Beat the Heat
 flecheLending Rises, Quality Remains High - World Bank Releases Results for FY 05
 flecheStatement By Paul Wolfowitz, President Of The World Bank, At Conclusion Of G8 Summit
 flecheG-8 Gleneagles Summit and Development
 flecheAid Flows, Debt Relief, And Economic Growth On The Rise In Africa, But Threats To Poverty Alleviation Remain: World Bank Report
 flecheGrowing on the Ashes of Conflict
 flecheDebt Relief
 flecheNew World Bank President Paul Wolfowitz Takes Office
 flechePrêmio Banco Mundial de Cidadania 2005 - Voz Mulher
 flecheNovo Relatorio Aponta Crise Mundial de Aposentadorias
 flecheDeveloping Countries At Odds Over Preferences In Farm Trade Talks
 flecheDevelopment in an Insecure World
 flecheProtect & Promote Poor People’s Knowledge To Raise Their Incomes
 flecheWolfensohn, James D.
 flecheWorld Bank Commits $250 Million for Tsunami-Affected Countries
 flecheEnvironmental Degradation And Climate Change Threaten Development Prospects
 flecheUnited Nations Report Offers New Vision Of Collective Security
 flecheGlobal Economic Prospects 2005: Trade, Regionalism and Development
 flecheRegional Trade Pacts Must Create – Not Divert – Trade to Reduce Poverty: World Bank Report
 flecheMillennium Development Goals : Countdown to 2015 - Gender Equity
 flecheEast Asia: Global Uncertainties Threaten to Mar 2005
 flecheChina Gives Bank Poverty Award
 flecheThe World Bank Leading The Way In Biodiversity
 flecheDebt relief plan eludes IMF Group; Issue likely to be resolved next year
 flecheEradicating Poverty For Stability And Peace
 flecheEasing Policy Risks, Costs And Barriers To Competition Keys To Faster Growth, Less Poverty: World Development Report 2005
 flecheIndigenous Culture Fundamental To Global Development
 flecheWorld Bank
 flecheDevelopment Education Program
 flecheMillenium Development Goals related regional charts
 flecheUniversal primary education
 flecheGlobal poverty evolution (1981-2001)
 flecheWhy Development Policy Lending's Time Has Come
 flecheWorld Bank Paper Urges Major Easing Of Israeli Closure Measures And Stepped-Up Palestinian Reform Efforts
 flecheUnhealthy Environment, Unhealthy People
 flechePoor Nations Agree On Flexible Approach To Kickstart Global Trade Talks
 flecheCities Put New Face on Poverty
 flecheNew AIDS Report Says Latin America Needs Broader Civil Society Participation To Battle Epidemic
 flecheIFC Invests in Caspian Oil and Pipeline Projects
 flecheWorld Bank's Wolfensohn: Poverty Fueling Global Unrest
 flecheKey Services Often Fail Poor People - New Report Shows How Governments and Citizens Can Do Better
 flecheWorld Bank-IMF Annual Meetings Open in Dubai
 flecheWorld Bank Grant Launches Bank-WTO Assistance on Standards
 flecheStatement by Horst Köhler, Managing Director of the International Monetary Fund, on the Work Program of the Executive Board, October 30,2002
 flecheInvesting in Better Globalization sous-titre : Remarks by Horst Köhler Managing Director of the International Monetary Fund at the Council on Foreign Relations Washington, D.C.
 flecheSustaining Development; Our Opportunity in Johannesburg
 flecheWorld Bank Urges More Balanced Global Approach To Development
 flecheAgreement Reached on Increased Funding For Poorest Countries
 flecheWorld Bank President Outlines Post-Monterrey Action Plan to Development Committee
 flecheWorld Bank Anticipates Global Upturn, Urges Increased Help to Poor Countries
 flecheA Partnership for Development and Peace
 flecheWorld Bank estimates cost of reaching the millennium development goals at $40-60 billion annually in additional aid
 flecheGlobalization, Growth and Poverty: Building an Inclusive World Economy
 flechePoverty To Rise in Wake Of Terrorist Attacks in US
 flecheZoellick, Lamy, Wolfensohn Discuss Growth and Development World Bank Calls for 'Development Round' at Qatar
 flecheWorld Bank Reviews Strategy, Launches Projects To Expand Health Coverage, Restructure Banks
 flechePutting Social and 'Green' Responsibility on the Corporate Agenda
 flecheWorld Bank Development Economics Conference Goes Online
 flecheWorld Bank Cancels Academic Meeting in Spain
 flecheWorld Bank Calls For New Compact To Fight Global Poverty
Keywords   go
Translate this page Traduire par Google Translate

Share on Facebook
Partager sur Twitter
Share on Google+Google + Share on LinkedInLinkedIn
Partager sur MessengerMessenger Partager sur BloggerBlogger
Other items
where is published this article: