Tag Archives: WTO

WTO Trade Forecast 2017: Cautiously Optimistic about trade growth recovery

Alicia Nicholls

After decelerating considerably in 2016, world merchandise trade growth is expected to recover to 2.4% in 2017. This is according to the cautiously optimistic trade forecast released today by the World Trade Organisation (WTO).

According to the WTO, although global merchandise trade volumes have historically on average grown 1.5 times faster than global GDP, this ratio has slowed to 1:1 since the crisis of 2008. Last year’s merchandise trade growth of 1.3% was the slowest pace of trade growth since the world economic crisis of 2008 and was linked primarily to a weak global economy.

In his press conference remarks, Director-General of the WTO, Roberto Azevedo, explained that early indicators, such as the record increases in global container shipping throughput, the high levels of global export orders, and the expected recovery in world economic output, point to a recovery in global trade in 2017.

However, the WTO Chief also cautioned that this forecast assumes that governments pursue the right policy mix and that forecasts of an expected recovery in global GDP are accurate. The report noted that trade growth could be negatively affected by governments’ trade, monetary and fiscal policies.

Indeed, the Director-General’s remarks to this point perfectly sum this up as follows:

Overall, I think that while there are some reasons for cautious optimism, trade growth remains fragile and there are considerable risks to the downside. Much of the uncertainty around the outlook is of course political — and not only geopolitical. Part of this is driven by people’s concerns about the impact that trade can have.

Given the high levels of uncertainty which have increased the forecast risk factor, WTO economists have also given a growth range of between 1.8 and 3.6% for 2017.

Observing that trade does cause some dislocation, the WTO Director General cautioned governments against protectionism and highlighted that innovation, automation and new technologies, and not trade, were responsible for eighty percent of the loss of manufacturing jobs.

The WTO’s forecasts for 2018 are much more optimistic, with a growth forecast of between 2.1 and 4.0%

For further information, please see the WTO Director-General’s press conference remarks here and the WTO’s press release here.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

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WTO Trade Facilitation Agreement enters into force

Alicia Nicholls

Today the World Trade Organisation (WTO) Trade Facilitation Agreement, the first multilateral trade agreement to be concluded since the WTO came into being over twenty years ago, has entered into force. The Trade Facilitation Agreement aims to expedite the process of the movement of goods across  national borders and was concluded as part of the Bali Package coming out of the WTO Ministerial in 2013.

For immediate entry into force the Agreement needed to be ratified by two-thirds of the WTO’s membership, that is, 110 member countries. That threshold was met today when Chad, Jordan, Oman and Rwanda submitted their instruments of ratification.

As the World Bank’s Annual Doing Business Reports show, countries’ customs procedures can vary from a few to a multiplicity of steps, which can significantly increase the amount of time goods take to clear borders, which increases costs to both suppliers and consumers. As supply chains become  increasingly globalised, so is the need for more expeditious trade flows and standardisation of customs procedures. The Trade Facilitation Agreement’s provisions provide standards which were inspired by international best practices.WTO economists in the World Trade Report 2015 estimated that the Agreement would lower members’ trade costs by an estimated 14.3% on average.

Developing countries and Least Developed Countries (LDCs) have the option to determine their pace of implementation by designating each of the provisions according to one of three categories: A,B,C, with A being the commitments each country can undertake as soon as the Agreement comes into force. The Agreement also includes provisions on customs cooperation. A Trade Facilitation Facility was also created at the request of developing countries to assist them and Least Developed Countries in implementing the Agreement.

So far besides St. Vincent & the Grenadines, the following countries of the Caribbean Community (CARICOM) have ratified the TFA: Trinidad & Tobago, Belize, Guyana,  Grenada, Jamaica, St. Kitts & Nevis, St. Lucia and Dominica. Reforms undertaken by CARICOM countries pursuant to Agreement could help to facilitate the movement of goods trade within the Community through more simplified customs procedures and lower border costs. Like other developing countries, CARICOM countries would also be able to access the Trade Facilitation Facility to assist in their implementation of the Agreement’s reforms.

For further information, please see the WTO’s press release.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

Dominica Ratifies WTO Trade Facilitation Agreement

Photo source: Pixabay

Alicia Nicholls

Dominica has become the latest Caribbean Community (CARICOM) member state to ratify the World Trade Organisation’s (WTO) Trade Facilitation Agreement, according to a WTO press release. On November 28, 2016 Dominica, along with Mongolia, deposited its instrument of acceptance to the WTO. These two ratifications bring the number of WTO member states to have ratified the Agreement to 100, just 10 shy of the number (two thirds of WTO membership) needed for the Agreement to go into effect, according to the press release.

The Trade Facilitation Agreement, which was concluded at the WTO’s Bali Ministerial in 2013, aims to lower trade costs by expediting the movement, clearance and release of goods, thereby cutting red tape, and improving cross-border customs cooperation on trade and customs compliance issues. Upon the request of developing and least developed country (LDC) WTO members, a Trade Facilitation Agreement Facility  was established in 2014 to assist them with implementing and gaining the benefits from the Agreement.

The WTO expects the Agreement to  boost global merchandise exports by up to $1 trillion per year if fully implemented. As I had noted in a previous post on the Agreement, ratification and full implementation  of the Trade Facilitation Agreement by all CARICOM states could also improve Caribbean regional integration by easing transaction costs of exporting across CARICOM states. Implementing these reforms would also send a strong signal to the international business community of these countries’ commitment to improving their ease of doing business.

The following other CARICOM countries have already ratified the Agreement: Trinidad & Tobago, Belize, Guyana, Grenada, St. Lucia, Jamaica and St. Kitts & Nevis.

The WTO press release may be viewed here.

Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

WTO: G20 Trade Restrictions remain high, despite slowdown in new measures

Alicia Nicholls

Despite a slowdown in new measures, existing trade restrictions among the G20 countries remain high. This is according to the World Trade Organisation’s (WTO) latest Report on G2o Trade Measures (mid-May 2016 to mid-October 2016) released November 10, 2016.

Some of the key findings of the sixteenth edition of this Report are as follows:

  • A total of 85 new trade-restrictive measures were implemented by G20 economies during the review period (mid-May to mid-October 2016).
  • This is an average of 17 new measures per month
  • The good news is that this is a decrease  from the 21 per month imposed in the previous reporting period (mid-October 2015 to mid-May 2016)but the WTO also cautioned that this is actually a return to the trend level for new trade-restrictive measures since 2009.
  • Of the 1,671 trade-restrictive measures (including trade remedies) recorded for G20 economies since 2008, only 408 had been removed by mid-October 2016.

As noted by the WTO, these  findings are of concern given the slowdown in global trade flows and the continuing economic uncertainty in the world economy.

The WTO in its recent downward revision of its trade forecasts is now predicting 1.7% growth in world merchandise trade volumes in 2016 (down from its previous forecast of 2.8%), the slowest rate of growth since 2009, and lower than global GDP forecasts of 2.2%.

I would also add that President-elect Trump’s tariff-happy rhetoric does not bode well for the future reduction of trade restrictive barriers if he does go through with his promises.

The WTO therefore noted that:

“It is imperative that G20 economies — collectively and individually — re-double their efforts to deliver on their commitment to refrain from taking new protectionist measures and roll back existing ones.”

The full report may be accessed here.

Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

 

WTO Public Forum 2016 focuses on “Inclusive Trade”

Alicia Nicholls

How can we make trade and trade rules more inclusive for small and medium sized enterprises (SMEs) and women in business? This was the central theme with which government representatives, NGOs, civil society organizations, business leaders, academics, students and ordinary citizens from around the world grappled at the World Trade Organisation’s (WTO) Public Forum held September 27-29, 2016. The flagship outreach event in the WTO’s calendar, the 2016 Public Forum attracted a record 2,000 registrants according to WTO Director General, Roberto Azevedo in his opening remarks on the first day of the event.

This year’s main theme “Inclusive Trade” is timely given the current global trade and economic climate marked by slowing global trade and economic growth, rising anti-trade sentiment in advanced economies and a strong populist backlash against the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP).

On the first day of the event, the WTO Secretariat launched its flagship trade policy publication, the World Trade Report 2016. Themed “Levelling the Trading Field for SMEs“, the Report explores SMEs’ participation in global trade, obstacles to their participation and cooperative approaches to promoting SME participation in global trade. Among the Report’s findings are that “trade participation of SMEs in developing countries is low, with exports accounting for 7.6 per cent of manufacturing sales, compared to 14.1 per cent for larger firms”.

In his opening remarks Director-General Azevedo noted that the backlash against trade and globalisation is not unique during periods of low growth, but cautioned that “history also shows the dramatic consequences that this kind of sentiment can have”. He explained that while trade was an important anti-poverty tool there needs to be acknowledgement that the benefits of trade “don’t reach as many people as they should and we should act … not by attacking trade, but by making it work better.”

Throughout the three-day event, a number of sessions and workshops were held exploring various themes, including e-commerce and bridging the global digital divide, SME access to trade finance, the sustainable development goals (SDGs), regional trade agreements (RTAs), sustainable investment, inter alia.

Audio recordings of the various sessions are available on the WTO’s website here.

Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

Belize accepts TRIPS Amendment

Alicia Nicholls

Belize has become the latest member of the Caribbean Community (CARICOM) to accept the amendment to the World Trade Organisation’s (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) which seeks to improve poorer members’ access to affordable medicines.

This  amendment to the TRIPS Agreement formalises and makes permanent the waiver provided by paragraph 6 of the Doha Declaration on TRIPS and Public Health, known as the “Paragraph 6 System” in 2003. The amendment was approved by the WTO General Council on December 6, 2005, and permits exporting countries to grant compulsory licenses for the manufacture and export of pharmaceutical products to poorer countries.

The protocol is not yet in force and will only enter into force upon acceptance by two-thirds of the WTO’s membership. The original deadline for acceptance was December 1, 2007 but has been extended to December 31  2017 by the General Council in November 2015.

So far the following CARICOM countries have accepted the amendment: Grenada (2015), St. Kitts & Nevis (2015), St. Lucia (2016), Trinidad & Tobago (2013).

More from the WTO’s press release here.

Alicia Nicholls, B.Sc., M.Sc., LL.B. is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

WTO and WB call for papers on “TRADE AND POVERTY: A COLLECTION OF CASE STUDIES”

The WTO and the World Bank Group issue a call for papers for a joint edited volume on trade and poverty. Following their joint report released in June 2015, “The Role of Trade in Ending Poverty”, the WTO and the World Bank Group have committed to further work on this area.

Authors are invited to submit before 15 September 2016 a comprehensive abstract or a draft paper for consideration to this project. Papers should deal with the topic “Trade and Poverty issues”.

For further information, please see more here

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