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At A Glance

·         Trade is a key means to fight poverty and achieve the Millennium Development Goals.

·         The World Bank Group’s (WBG) trade programs (a) promote a multilateral trading system that is more supportive of development; (b) make trade competitiveness a centerpiece of countries’ development strategies; and (c) support trade and trade facilitation reforms through effective “Aid for Trade” programs.

·         We are helping developing countries position themselves to take advantage of the global economic recovery. 

·         In fiscal year 2011 (FY11), the World Bank provided a total of $2.6 billion in trade-related lending to help developing countries achieve their trade-reform objectives. Lending in FY11 represents nearly a five-fold increase from FY03 levels, when lending amounted to $566 million, with the share of trade-related lending in total Bank lending also showing a rising trend in recent years, from an average of 2 percent for FY02-FY03 to an average of about 6 percent for FY09-FY11. Overall Bank lending for FY11 reached $43 billion. 

·         An example of our work is helping to improve trade logistics in developing countries. The $250 million East Africa Trade and Transport Facilitation Project, for instance, improved the corridor infrastructure and upgraded the main border crossing between Uganda and Kenya at Malaba, reducing border crossing times from three days to three hours.

·         The WBG launched a new trade strategy in 2011 following consultations with a diverse group of stakeholders. The new strategy, Leveraging Trade for Development and Inclusive Growth, will target four priority areas: trade competitiveness and diversification; trade facilitation, transport logistics and trade finance; support for market access and international trade cooperation; and managing shocks and promoting greater inclusion.

·         The WBG is also committed to building knowledge through research, analysis, tools and data, as well as through the delivery of technical assistance.

Trade Matters

Countries open to international trade tend to grow faster and provide more opportunities to their population. As noted by the Commission on Growth and Development, all developing countries that have experienced sustained periods of high economic growth prospered by being open to global markets. However, a number of developing countries continue to face obstacles in accessing global markets due to limited supply (infrastructure) capacity and unfavorable business and investment climates.

Trade for Development

Our aim is to make the world trading system more supportive of development and to help countries benefit from increased globalization by:

·         Supporting the conclusion of pro-development trade agreements (multilateral, regional, and bilateral). 

·         Emphasizing trade and competitiveness at the core of national development strategies.

·         Promoting trade-related reforms through effective “Aid for Trade” programs. 

The Global Economic Crisis and Our Trade recovery programs

·         The WBG has worked to help developing countries cope with the effects of the crisis and position themselves to take advantage of the global economic recovery. In FY11, the WBG provided a total of $2.6 billion in trade-related lending (excluding infrastructure projects).

·         The WBG highlighted the importance of trade finance during the 2008-09 economic crisis. As of January 2011, through the Global Trade Finance Program and the Global Trade Liquidity Program, the International Finance Corporation (IFC), the Bank’s private sector arm, has supported almost $22 billion of trade transactions.

·         The WBG is monitoring the effects of developments in agricultural markets and rising food prices.

Supporting Trade Facilitation Projects

·         Trade-related projects in the areas of trade facilitation and market access comprised almost half of the trade portfolio in FY10, followed by projects with a focus on regional integration, export development and competition, and technology diffusion.

·         The WBG’s Trade Facilitation Facility supports improvements in trade facilitation systems that reduce developing countries’ trade costs and improve competitiveness. As of January 2011, 29 projects with a total budget allocation of $20 million were approved,  mainly benefiting African countries.

Improving Access to Trade Data

·         In cooperation with other international development partners, the World Bank launched the Transparency in Trade Initiative to provide free and easy access to data on country-specific trade policies, such as tariffs, non-tariff measures, and services regulations.

·         In the fall of 2010, the WBG revamped World Integrated Trade Solutions, a trade analysis software tool that allows users to access a global trade database. The software, which is available online, makes this information more accessible to the public. 

·         The Bank introduced a regional trade integration website featuring the Global Preferential Trade Agreements Database.  The site provides detailed information on free trade agreements around the world.

·         To better monitor trade policy developments, the WBG has supported the Global Trade Alert, a joint venture of think tanks around the world, and maintains the Temporary Trade Barriers Database. Both databases allow users to track the use of trade-distorting government measures initiated during the crisis. 

Examples of our Operational Work

·         The World Bank is the largest multilateral provider of “Aid for Trade”, providing $15 billion per year from FY02 through FY10. “Aid for Trade” includes trade policy and regulation, economic infrastructure (ports, roads, airports, telecommunications, and energy), capacity building, and trade-related budget support. 

·         One example of “Aid for Trade” work is taking place in Lesotho, where a World Bank program has trained hundreds of factory workers, a majority of them women, in order to improve the country’s trade competitiveness.

·         In Lao PDR, a recent World Bank-funded study outlined actions that will assist the country to satisfy core World Trade Organization (WTO) Sanitary and Phytosanitary requirements and make progress in its broader legislative agenda for WTO accession.  

Trade Knowledge and Publications

·         Since 2002, the WBG has delivered more than 1,000 pieces of analytical work on trade issues. To access our publications, go to http://econ.worldbank.org/programs/trade

To learn more about the World Bank’s work on trade, please visit www.worldbank.org/trade

Contact: Alejandra Viveros, (202) 473-4306, aviveros@worldbank.org

Updated July 2011.