MAKING TRADE PREFERENCE WORK FOR THE POOR

The US-based Center for Global Development has published a brief based on the final report of its Global Trade Preference Reform Working Group on the functioning of preferential trade arrangements. The brief highlights a number of ways in which existing preferential schemes could be improved. It notes that existing schemes ‘often fall short of their intended goals’, largely because they ‘exclude commodities that poor countries can produce competitively, such as agricultural products and clothing.’ It argues that ‘extending comprehensive, usable and predictable quota-free market access to all least developed countries could provide a critical boost to the world’s poorest people with only trivial effects on preference-giving countries.’ Five recommendations are made. These are:

· to immediately expand coverage to all exports from all least developed countries;

· to immediately relax restrictive rules or origin, by harmonising these rules across preferential schemes and making such rules more flexible via the use of ‘extended cumulation, which allows exporters to incorporate inputs from a broad group of countries, as long as the inputs are domestically transformed into a substantially new product’.

· to immediately make trade preference programmes permanent and predictable;

· to promote greater cooperation between countries giving and receiving preferences, in order to stimulate greater use of the trade preferences granted;

· to encourage advanced developing countries to implement trade preference programmes that adopt the foregoing principles (de facto building on recent initiatives by Brazil, China, India and Turkey).

In addition, an ODI policy briefing paper on ‘trading out of crises and reducing vulnerability’ has called on the EU to update its preference regime to include the adoption of innovative solutions to the challenge of preference erosion. This, it is argued, should include measures to enhance the value of the remaining preferences, including through the liberalisation of rules of origin and the extension of preferences in trade in services.

From:

http://agritrade.cta.int/en/Key-topics/EU-trade-negotiations-of-relevance-to-ACP-countries/News/Making-trade-preference-work-for-the-poor