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Trade and Development Quarterly: The Global Dialogue

This nineth edition contains

New Publications

  • Trade Progress Report: Doha Development Agenda and Aid for Trade (September 2006)
    The report produced by the World Bank and the International Monetary Fund is now available at the Development Committee website. This paper summarizes recent developments in the Doha Round negotiations, and aid for trade. Staffs urge WTO members to quickly return to the negotiating table, as failure to achieve conclusion of the talks means a significant opportunity foregone to boost the world economy and strengthen the multilateral trade system. The report welcomes the recommendations of the WTO Task Forces on Aid for Trade and the Integrated Framework (IF), both of which explicitly recognize the need to adhere to the Paris Declaration on aid effectiveness. It also reiterates the importance of working through established channels with proven development expertise as well as the need to foster integration between trade and other policy areas. The report also reviews existing mechanisms for cross-country and regional aid for trade needs. It proposes possible options to overcome the coordination and capacity problems affecting regional cooperation. The report can be accessed here.

  • New book on Technology, Adaptation, and Exports: How Some Developing Countries Got It Right, edited by Vandana Chandra, The World Bank August 2006
    The history of economic development is replete with cases in which governments have tried unsuccessfully to promote the use of new technologies to accelerate growth. The many reasons for failure include bad luck, poor governance, flawed policy design, and weak implementation. That said, developing-country policy makers must continue to look for innovative ways to increase economic growth, especially through exports. The challenges they face are daunting, not least because global competition is rising and taking new forms, driven by rapid technological change and the growth of global production networks in which sophisticated skills and capabilities are required at the entry level, even for manufactured goods as simple as T-shirts.

This book studies 10 cases in which developing countries as diverse as Chile, India, Kenya, Malaysia, Taiwan and Uganda leveraged technological adaptation to achieve technological parity with their competitors in world markets. The lessons of the cases are most useful for low-income countries, especially those of Sub-Saharan Africa. They illustrate different stages of economic development in a range of countries. The aim is to understand why and how these countries got it right. What did technological adaptation actually mean in each case, and what drove it? What difference did it make? What role did government play? Do the cases hold lessons that may be useful for other developing countries?

The find out more about the book, please click here.

  • New book on Global Integration & Technology Transfer, edited by B.M. Hoekman & B. Smarzynska Javorcik, The World Bank April 2006
    The importance of international technology diffusion (ITD) for economic development can hardly be overstated. Both the acquisition of technology and its diffusion foster productivity growth. As invention and creation processes remain overwhelmingly the province of industrialized countries, most developing countries rely largely on imported technologies as sources of new productive knowledge.

The contributions in this volume advance our understanding of the relative importance of technology diffusion through trade and foreign direct investment in a range of developing and transition economies. The studies address the effect of the two channels on productivity growth both at the firm and economy-wide level. They discuss policy intervention used by developing countries to stimulate ITD, ranging from economy-wide educational programs to funding for the creation and acquisition of technology, tax incentives, specific types of intellectual property protection, tariffs on trade, differential taxation, export promotion schemes, and so forth. They also provide guidance on the likely impact of policies towards trade and inward investment on productivity performance in different “types” of developing countries. For more information, visit the following website.

Trade Notes Series

  • Trade Note No. 28: Compensating Lost Revenue in Regional Trade Agreements, by Peter Walkenhorst
    This note reviews the different mechanisms that compensate for lost revenue in regional trade agreements. Economic integration at the regional level allows the members to reap benefits from specialization while accommodating the particular needs and adjustment capacities of the countries involved.  Structural and fiscal adjustments cannot be avoided entirely, however, and in some cases special provisions to contain adverse impacts on countries and foster coherence among members have been devised. Improvements in customs collection through better compliance with existing regulations may be sufficient to offset the revenue losses.  More comprehensive reform measures to broaden the tax base and shift revenue generation away from trade taxes will be sometimes required. 

  • Trade Note No. 29: Export Financing for SMEs: The Role of Factoring, by Leora Klapper
    This note describes the financing opportunities that factoring and reverse factoring offer to SMEs in both developed and developing countries. Factoring is a type of supplier financing in which firms sell their credit-worthy accounts receivable at a discount and receive immediate cash.  It can be a powerful tool in providing financing to high-risk, informationally opaque sellers. Factoring’s key virtue is that underwriting is based on the risk of the receivables (i.e. the buyer) rather than the risk of the seller. Reverse factoring has the potential to be an important source of working capital financing for exporters in countries with poor credit information. It can mitigate the problem of weak information infrastructures if only receivables from high quality buyers are factored (such as foreign, internationally accredited firms).  In addition, the reduced risks associated with reverse factoring makes it possible for firms to factor without recourse, which can reduce firms’ exposure to the credit risks of its customers.

The note includes data on average factoring turnover by country between 1994 and 2005 for more than 50 countries.


  • Trade Note No.30: Export Promotion Agencies: what works and what does not, by Daniel Lederman, Marcelo Olarreaga, and Lucy Payton
    The paper studies the impact of existing Export Promotion Agencies (EPAs) and their strategies, based on a new data set covering 104 developing and developed countries.  Results suggest that on average EPAs have a strong and statistically significant impact on exports.  For each $1 of export promotion, we estimate a $300 increase in exports for the median EPA.  However, there is heterogeneity across regions, levels of development and types of instruments.  Furthermore, there are strong diminishing returns, suggesting that as far as EPAs are concerned small is beautiful.

 


Of Note

  • Papers on preference erosion presented at the International Symposium on “Preference Erosion: Impacts and Policy Responses” in Geneva, June 13-14, 2005, organized by The World Bank in cooperation with OECD and the WTO and with support from the Canadian International Development Agency and the UK Department for International Development, are now available here.
    The papers listed on this page review the current “value” of preferences for beneficiary countries in major OECD markets, assess the implications of preference erosion under different global liberalization scenarios, and discuss potential policy responses.

  • A related paper was also published as Hoekman, Bernard, 2006. “The Doha Round and Preference Erosion: A Symposium”, World Bank Economic Review, 20(2), May, pp165-168.


Workshops and Seminars

Forthcoming

  • Trade, Growth, Poverty and Gender: E-Learning course - 22 October to 15 December 2006
    This course delivered via Internet will explore some of the analytical and policy issues related to the impact of trade liberalization on economic growth and poverty reduction.  The purpose of the course is to help civil society and government officials understand the findings and recommendations of recent and sometimes highly technical economic analyses related to the growth and poverty implications of trade reforms and international trade agreements. As a result, participants will be better able to participate in the formation and monitoring of their country’s trade reform and negotiating agenda

This introductory overview course is intended mainly for representatives of civil society organizations involved or interested in the trade and globalization debate and in monitoring and influencing the trade reform agenda of their country.  Participants from around the world are encouraged to register.  In addition to civil society, the course will be useful for policymakers, legislators, and negotiators in countries undertaking or contemplating trade reforms, as well as political, social, and economic researchers (non-trade specialists).  The course will be conducted in English over the Internet, so the ability to participate in the online discussion is a key pre-requisite for participants. Participants must also have access to a CD-ROM player, as some of the materials will be included in a CD that will be distributed prior to the course. For more information please visit the following website.

  • Trade in Services & International Agreements - E-Learning Course - 25 September - 17 November 2006
    Reflecting its rising role in international trade, trade in services has become an important component of domestic reform agendas as well as of the WTO Doha negotiations and bilateral and regional trade agreements.  To strengthen the ability of trade officials, advisors, analysts, and representatives of business and consumer associations to understand the economic implications of services liberalization and trade, the World Bank Institute is offering a “Trade in Services and International Agreements E-learning Course”. As a result of the course, participants will be better able to contribute to the formulation of their country’s trade in services reform and negotiating agenda.

    The course targets a wide range of professionals from government officials directly involved in the conduct of services trade negotiations, whether at the WTO or at the bilateral and regional levels, to officials in development or planning ministries, whose tasks increasingly include keeping track of ongoing trade and investment negotiations and fitting such efforts into the broader and longer-term process of development, researchers in academia, think tanks and regional research networks concerned with trade and regulatory polices; and to representatives from professional associations (e.g. in banking, insurance, shipping, telecom users, migration policy), and from consumer groups typically interested in the impact of services negotiations on competition as well as on the price and availability of public services such as health, education, water, and overall access to universal services.
    For more information is available on the following website.

  • OECD Global Forum on Trade: A trade policy dialogue on the multiple dimensions of market access and development, Mexico City, Mexico, 23-24 October 2006
    The OECD Trade Directorate is organizing a Global Forum on Trade in partnership with the World Bank, and with the support of the Government of Mexico.  This Forum will consider market access across various development dimensions including global (MFN) liberalization, North-South and South-South trade, trade in services, and regional trade liberalization - as a complement to multilateral liberalization.

    The event will bring together trade policy makers, academics, industry representatives and other experts from OECD and non-OECD countries for a timely trade policy dialogue on market access issues. Representatives from manufacturers’ associations, academia, non-governmental organizations (TUAC, BIAC & others) and key multilateral organizations are invited to participate in the discussion. The structure of the event will emphasize brainstorming and dialogue among these experts, with a view to informing the global debate on trade and development in the context of the Doha Development Agenda.
    Participation is by invitation only.
    Further information is available on the following website or contact Kaveri Bopiah, tel: (+33) 1 45 24 17 90.


For the record

  • Regional Workshop on the Importance of Rules of Origin and Standards in Regional Integration, Boao, Hainan, Province of China, June 26-27, 2006
    On June 26 and 27, 2006, the World Bank's East Asia Region and Boao Forum for Asia organized a workshop in Hainan, China, on the importance of rules of origin and standards in regional integration. The objective of the workshop was to identify constraints on East Asian exporters resulting from the existing regional rules of origin regimes and diverging national standards in the region and to share experiences from the EU as a successfully integrating region with East Asian policy makers. The workshop brought together representatives from governments, the private sector and academia as well as experts from regional organizations in particular ASEAN and the EU. Participants from the region represented Cambodia, China, Indonesia, Lao PDR, the Philippines, Thailand, and Vietnam.

The agenda and presentations can be found here.

  • Intellectual Property Rights for Agriculture in International Trade and Investment Agreements: The Plant Breeding Perspective, WTO, Geneva, June 20, 2006.
    This seminar, chaired by Carlos A. Primo Braga, Senior Adviser, International Trade Department, The World Bank, was organized in cooperation with the WTO. It focused on the key findings of the World Bank study on Designing Regimes to Support Plant Breeding in Developing Countries.

    Intellectual property rights (IPRs) have become an important topic on the international trade agenda since the negotiation and adoption of the TRIPS Agreement as part of the overall package of agreements leading to the creation of the WTO. TRIPS places obligations on WTO members to offer specified minimum standards of IPR protection in a wide range of sectors. But the agreement also leaves developing countries a certain amount of flexibility in how they fulfill their obligations. This flexibility allows countries to tailor their IPR regimes to their own specific circumstances.

    The agricultural sector, and in particular plant breeding, is one area where this flexibility is quite broad. The World Bank’s Department of Agriculture and Rural Development (ARD) commissioned a study on the impact of IPRs in the breeding industry in developing countries. Niels Louwaars (Centre for Genetic Resources, Wageningen University), the team leader of the study in question, summarized the main findings of the study that can be found here.

    The study points out that plant breeding research and seed provision are vital activities that need to be fostered in developing countries. IPR protection is not a "silver bullet" to accomplish this, but can be an important piece in the "puzzle" of commercial seed industry development. Although a range of attempts have been made to provide some type of IPRs for plant varieties, only recently a mechanism for plant variety protection (PVP) has begun to take hold.  The UPOV (International Union for the Protection of New Varieties of Plants) Conventions provide the best-known/most adopted system for PVP. It remains true, however, that relatively few developing countries have any significant experience with protecting varieties. The preliminary evidence indicates that the application of PVP in these countries tends to reinforce major domestic trends in the development of commercial seed. The literature analyzing the impact of IPRs on plant breeding in industrialized countries, in turn, provides inconclusive evidence on the influence of PVP regimes on the size or nature of investments in the commercial seed sector. It is possible, however, to show some positive contributions from recently established PVP systems in developing countries. For example, where parental lines of commercial hybrids are subject to misappropriation, PVP provides additional protection and makes companies more confident about their research investments. A PVP system may also make foreign seed companies more confident in sharing varieties with domestic partners.

    Policy-makers should evaluate with care pressures to strengthen IPRs in plant breeding, particularly those that emerge in the context of trade and investment agreements. An IPR regime in isolation is not likely to provide the incentives required to build a robust plant breeding and seed sector. Countries should be careful in structuring their IPR regimes to evolve in concert with the needs of their national seed systems, taking also into account the impact of IPRs on public sector breeding and exploring the possibility of providing different levels of protection to different crops. The report also presents case-studies of the seed sector and related regulations in China, Colombia, India, Kenya, and Uganda. At the seminar, the implications of different UPOV Conventions (1978 and 1991) for developing countries, the potential role of trade agreements in pushing IPRs beyond optimal levels of protection, and the experience of developing countries with other sui generis mechanisms of protection were also discussed.

    Rolf Jordens (Vice Secretary General, UPOV) emphasized the importance of using the UPOV 1991 Convention (the only one open to accession at this stage) as a mechanism to generate incentives to breeders and the government's commitment to the sector. He presented data showing the expansion of the UPOV membership, UPOV membership's impact on applications for protection per crop, and correlations between UPOV accession and the expansion of investments in the seed sector. He emphasized, in particular, the benefits of adopting internationally recognized standards for PVP as illustrated by the UPOV 1991 Convention.

    Geoff Tansey (Consultant, Quaker United Nations Office, Geneva) focused his remarks on the potential implications of strengthening protection of IPRs to the structure of control of the food system. He argued that the trend towards higher IPR protection could lead to concentration in the food sector and make access to knowledge and technology more difficult for developing countries. He underscored the dangers of translating the R&D-driven logic of IPR protection typical of the pharmaceutical industry to agriculture. He also argued against the utilization of trade and investment negotiations to "force" countries to accept any restrictions on the flexibilities given in TRIPS to determine an appropriate PVP system for themselves.
    David Vivas (Program Manager on Intellectual Property, Technology and Services, ICTSD) pointed out the difficulties in proving causality between strengthening IPRs and the economic performance of the seeds sector. He argued in favor of exploring sui generis mechanisms of PVP in the case of developing countries. He also pointed out the importance of complementing efforts in the IPRs front with the strengthening of other regulatory tools, including competition law.

    An active debate followed, including all the above themes, as well as questions about the relationships amongst TRIPS, UPOV, and the CBD. The discussion illustrated the importance of further research and technical assistance on PVPs with a view to improving the quality of the engagement by developing countries in these debates and appropriate policy choices.

  • International Seminar on the Development of Cotton Sector in Africa, Ouagadougou, Burkina Faso, June 19-20, 2006

The main objective of the seminar was to review the progress made regarding cotton sector reforms of African countries and to share information among participants on the progress of trade and development-related issues with respect to cotton in West African countries since the WTO Workshop on cotton, held in Cotonou, on 23-24 March 2004.

The participants unanimously recognized that the discussions of the seminar were useful, that the presentations made were of high technical quality and participants' interventions were relevant.

The World Bank (John McIntire, Sector Director, ESSD, Africa Region) stressed that countries could use International Development Agency (IDA) funding to support the cotton sector if they so desired, but that the World Bank’s ability to provide additional funding was limited by the IDA envelope. The World Bank would like to support projects addressing biotechnology improvements in the cotton sector, but strong partnerships (involving donors, client countries and technical agencies) are required to implement such activities.

General conclusions to be drawn from the meeting were that cotton continues to play a key role in many developing nations in Africa, in terms of employment and income and that development assistance should focus on the need to improve the sector by making it more efficient and competitive. There was broad recognition of the need to forge new partnerships to continue the process of reform.  An English version of the Ouagadougou Declaration is available here (pdf - 43k).





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