布鲁盖尔-Diversification-and-the-world-trading-system_16页_294kb

POLICY BRIEF Summary: Diversification and the World Trading System

Core Content

Export diversification is crucial for economic growth and stability in developing countries. It involves diversification both within and across sectors, including agriculture, manufacturing, and services. However, the current world trading system does not support this process effectively, and the situation is worsening.

Main Points

Importance of Diversification

• Export diversification is associated with economic growth and reduced volatility.
• Diversification can occur within sectors (intensive margin) and across sectors (extensive margin), including quality upgrading.
• A broader growth process across all sectors leads to more sustainable and quicker economic development.

Current Challenges

• Many developing countries, especially in Africa, the Middle East, and Latin America, have shown poor progress in diversification.
• In agriculture, productivity improvements are hindered by high tariffs, sanitary and phytosanitary standards, and subsidies.
• In manufacturing, high tariffs and hidden subsidies, along with tariff escalation, limit diversification potential.
• In services, regulatory barriers and restrictions on foreign entry and movement are significant, particularly in transport and professional services.
• Export taxes and restrictions on natural resources disrupt global supply chains and hinder diversification.

Role of the WTO and G20

• A rule-based trading system is essential for promoting diversification, but it is not currently supportive for developing countries.
• The G20 must restore the credibility of the rule-based system to enable sustainable export diversification.
• The WTO dispute settlement mechanism is in crisis, which could hinder further rulemaking and diversification efforts.

Key Recommendations

For the G20

• Reduce and eliminate tariff escalation, tariff peaks, and high tariffs that constrain value addition.
• Strengthen rules to tackle trade-distorting subsidies, especially in agriculture and manufacturing.
• Limit export restrictions and taxes on natural resources to avoid disruption of global supply chains.
• Leverage GATS to promote services trade liberalization, particularly in cross-border trade and FDI.
• Adopt investment facilitation rules to streamline investments and improve transparency.
• Create a framework for digital commerce to reduce transaction costs and open new opportunities.
• Support SMEs through horizontal and non-discriminatory measures, including market intelligence, regulatory information, and financing.

For National Policies

• Reduce or eliminate tariffs on raw materials and inputs to integrate into global and regional value chains.
• Revisit non-tariff barriers to align with export markets and support quality infrastructure.
• Streamline border and documentary compliance to reduce costs and improve logistics.
• Liberalize services trade and adopt appropriate regulatory frameworks in energy, telecommunications, and financial services.
• Implement investment-friendly regimes to attract and retain FDI, especially in non-traditional sectors.
• Adopt a legal framework for digital trade that ensures free data flows and protects privacy and security.
• Support SME integration through trade, finance, and export promotion measures.

Conclusion

Export diversification is a key driver of growth and stability in developing countries, but it is constrained by the current trading system. The G20 and WTO must work together to create a more supportive environment through rule reforms, dispute resolution, and investment facilitation. National policies should also focus on reducing trade barriers, improving regulatory frameworks, and supporting SMEs to enhance their role in international trade.