Poorer countries risk losing out amid growing pressure on global trade system – ODI experts

11 December 2017

Poorer countries risk losing out if the democratic and rules-based global trade system is allowed to fall apart, experts at the Overseas Development Institute (ODI) have warned.

Researchers at the UK’s leading international development think-tank have urged ministers attending the World Trade Organization meetings in Argentina this week to reaffirm their commitment to the system.

Recent moves by the US to block the appointment of new appeal judges risks creating a growing backlog of trade disputes, undermining WTO rules and institutions. Reports last week also suggested the US has blocked efforts to draft a declaration for all 164 members to agree on

Dirk Willem te Velde, who runs the Supporting Economic Transformation programme at ODI, said any damage to the multilateral trade system would be bad news for developing countries.

He said: 'As they stand, the WTO rules avoid discrimination against the smallest and most vulnerable. One member one vote means that trade is based on rules rather than power, so poor countries are protected from discrimination and can initiate disputes if they feel they are discriminated against.

'In the last two years developing countries put forward more than half of all cases, 16 out of 30, to the appeals body which settles trade disputes. If these rules and institutions are undermined in any way then it is the poorer countries that will lose out.

'We need ministers from all countries attending the meetings in Argentina to show their commitment to a democratic rules-based system which can help developing countries achieve prosperity and lift people out of poverty.'

New research published on supporting economic transformation shows how proposals currently under discussion at the WTO on agriculture, fisheries and e-commerce are likely to benefit the poorest and most vulnerable countries. There might be risks and losses for specific groups but these are manageable, in particular through additional targeted Aid for Trade.

Other findings from the research include:

  • Price support mechanisms to build up food stocks are costing some emerging economies up to $15 billion a year. Researchers say food security issues can be better addressed by promoting agricultural productivity and trade
  • Removing the annual $35 billion subsidies for fisheries in developed and emerging countries – a quarter of which are fossil fuel subsidies – would benefit fisheries value chains in the poorest countries, reduce the depletion of fish stocks and improve future food security
  • A reduction in tariffs on e-commerce goods and service could increase trade by developing countries. Even a 1% decrease in tariffs could lead to a nominal increase of $2-3 billion in high-technology imports and exports

ENDS

Notes to editors

For more information or to arrange an interview with Dirk Willem te Velde, please contact James Rush on [email protected] or +44 (0)7808 791265