FTAs, Regional Blocks and Equity – who will represent the voiceless in trade

1. FTAs, Regional Blocks and Equity – who will
represent the voiceless in trade

2. Arguments around Free Trade
Against
1. Only a specific class of people can take advantage of free
trade – those already globally integrated (includes rich
and poor).
2. Those industries which are producing domestically
demanded goods face a shutdown.
Favour
1. Why go through the traditional structural
transformation?
2. Service-led growth is also labour intensive
2

3. Evidence from Developing Countries
• Trade only reduces poverty if there is job
creation
• Trade liberalization in the initial phases leads
to increased income inequalities
3

4. Situation Analysis
• Curtailing trade is not a choice
• Consumer demand forces informal trade if
formal channels are closed
4

5. Regionalism and FTAs
• FTAs being signed in the absence of progress on WTO
• Criticism by business community
– Governments started negotiating without taking
businesses on board
– Industry concerns beyond market access including
investment and services should be incorporated
– Involve businesses in the annual review of FTAs
• What about other voices?
– Consumer groups in developing countries lack capacity
5

6. How FTAs impact voiceless
•
•
•
•
Negotiating non-tariff barriers is difficult
Hidden subsidies are not easy to recognize
Countering undervalued imports is difficult
Developing countries will require assistance in
complying with trade regulations
• Dispute settlement arrangements and
compensatory mechanism
6

7. Where is the trade-related infrastructure?
Afghanistan
Bhutan
Bangladesh
India
Pakistan
Maldives
Sri Lanka
Nepal
Efficiency of
customs clearance
process
2.33
2.29
2.33
2.77
2.85
2.24
2.58
2.20
Note: (1=low to 5=high)
Source: World Development Indicators 2013
Quality of trade and
transport-related
infrastructure
2.0
2.3
2.49
2.87
2.69
2.47
2.5
1.87
Competence and
quality of logistics
services
2.16
2.42
2.44
3.14
2.77
2.68
2.8
2.12

8. Way Forward
• Who will represent the voiceless in trade?
– Government
– Private Sector
– Civil Society Organizations
– Community Boards
• We still don’t have an answer
8