SCZONE showcases investment opportunities to eight Japanese companies    Egypt urges Israel to accept Gaza deal amid intensifying fighting    Egypt, ADIB explore strategic partnership in digital healthcare, investment    SCZONE, Tokyo Metropolitan Government sign MoU on green hydrogen cooperation    Al-Sisi, Macron reaffirm strategic partnership, coordinate on Gaza crisis    Egypt welcomes international efforts for peace in Ukraine    Contact Reports Strong 1H-2025 on Financing, Insurance Gains    Egypt, India's BDR Group in talks to establish biologics, cancer drug facility    AUC graduates first cohort of film industry business certificate    Egypt to tighten waste rules, cut rice straw fees to curb pollution    Indian tourist arrivals to Egypt jump 18.8% in H1-2025: ministry data    Egyptian pound down vs. US dollar at Monday's close – CBE    Egypt's FM, Palestinian PM visit Rafah crossing to review Gaza aid    Egypt prepares unified stance ahead of COP30 in Brazil    Egypt recovers collection of ancient artefacts from Netherlands    Egypt harvests 315,000 cubic metres of rainwater in Sinai as part of flash flood protection measures    Egypt, Namibia explore closer pharmaceutical cooperation    Fitch Ratings: ASEAN Islamic finance set to surpass $1t by 2026-end    Renowned Egyptian novelist Sonallah Ibrahim dies at 88    Egyptian, Ugandan Presidents open business forum to boost trade    Al-Sisi says any party thinking Egypt will neglect water rights is 'completely mistaken'    Egypt's Sisi warns against unilateral Nile measures, reaffirms Egypt's water security stance    Egypt's Sisi, Uganda's Museveni discuss boosting ties    Egypt, Huawei explore healthcare digital transformation cooperation    Egypt's Sisi, Sudan's Idris discuss strategic ties, stability    Egypt to inaugurate Grand Egyptian Museum on 1 November    Greco-Roman rock-cut tombs unearthed in Egypt's Aswan    Egypt reveals heritage e-training portal    Sisi launches new support initiative for families of war, terrorism victims    Egypt expands e-ticketing to 110 heritage sites, adds self-service kiosks at Saqqara    Palm Hills Squash Open debuts with 48 international stars, $250,000 prize pool    On Sport to broadcast Pan Arab Golf Championship for Juniors and Ladies in Egypt    Golf Festival in Cairo to mark Arab Golf Federation's 50th anniversary    Germany among EU's priciest labour markets – official data    Paris Olympic gold '24 medals hit record value    A minute of silence for Egyptian sports    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Trading our way out of crisis
Published in Daily News Egypt on 22 - 11 - 2009

GENEVA: Global trade contracted in 2009 at a rate not seen since the Great Depression, and those paying the heaviest price are those who can least afford it. So, when trade ministers from the World Trade Organization's 153 members gather in Geneva later this month, the issue of how the WTO and the global trading system can help the poorest countries will be high on the agenda.
Driven largely by collapsing domestic demand and production levels, but also by a shortage of affordable trade finance, trade volumes will fall by more than 10% this year. Whether trade will recover next year is an open question. Despite some evidence that trade volumes grew over the summer, recovery has been patchy - and so fragile that a sudden shock in equity or currency markets could once again undermine consumer and business confidence, leading to a further deterioration of trade.
The world's poorest countries face the greatest hardship when trade languishes. They do not have the luxury of cobbling together fiscal-stimulus packages or rescuing ailing industries in order to cushion the shock brought about by the economic crisis. For them, trade represents a huge share of overall economic activity and is unquestionably the best avenue for exiting a crisis that has hit them hard.
The irony is that trade has collapsed just when these countries were becoming increasingly active in global markets, with their exports rising by more than 20% during this decade. For nations that depend on trade, the sharp drop in exports this year was crippling. Since the crisis began, export earnings of the world's poorest countries are down $26.8 billion, or 44%.
The WTO Ministerial Conference later this month will provide an occasion to consider the best ways to generate growth and alleviate poverty in these countries. Concluding the Doha round of trade negotiations by the end of 2010 - as world leaders have said they wish to do - is one of them. A Doha deal represents one of the most valuable tools at our disposal to help meet the United Nations' Millennium Development Goals.
Frankly, all of us already know what needs to be done. Yet the Doha Round has fallen victim to basic misunderstandings - first, about why countries trade, and, second, about how they trade.
Countries trade, first and foremost, because it is in their interest to do so. It is in a country's interest to lower its import barriers so that it has cheaper access to goods and services that it cannot produce competitively. Trade increases competition and keeps inflation in check. In this way, trade can raise living standards. Moreover, countries that lower their import barriers also end up exporting more.
The reluctance of trade negotiators to pursue what is in their obvious self-interest reflects another, more serious misunderstanding about the manner in which nations trade. Consider United States-China trade in iPods. Every iPod that the US decides not to import means a $150 "decline in China's recorded exports, though only about $4 of that value is actually added in China. Japan, which contributes about $100 in value, suffers far more from China's supposed decline in exports. Clearly, the words "made in mean something very different from what they meant 20 years ago. Our production processes are so globalize that a country's import tariffs could well penalize imports from one of its own global companies.
For many countries, particularly in the developing world, reducing obstacles to trade is insufficient for fuller participate in the global economy, because they also need to build their capacity to trade.
That is the central aim of the Aid for Trade initiative. Despite the economic crisis, Aid for Trade donor contributions to help the less fortunate have risen 10% per year since 2005, and major donors are on track to meet or exceed their pledges for future funds. Several major countries have agreed to increase their contributions this year to building infrastructure, productive capacity, and know-how in the developing world.
But Aid for Trade is no substitute for the market-opening opportunities and improved rules promised by the Doha round. WTO members have already agreed that rich countries - and developing countries that are in a position to do so - would open their markets completely to 97% of exports from the world's poorest countries, and dramatically reduce duties for those products where barriers remain.
As a result, cotton subsidies, which depress prices and displace African exports, would be sharply curtailed, and cotton exports from poor countries would receive duty-free, quota-free treatment in rich-country markets. All trade-distorting farm subsidies would be slashed by 70%-80% in the major subsidizing countries. New rules on streamlining customs procedures would sharply reduce transit times. We must make progress on this agenda.
What is frustrating is that we are tantalizingly close to a deal which, according to the Washington-based Peterson Institute for International Economics, would deliver global economic benefits of $300-$700 billion annually. But, to reap these benefits, we must close the deal. The next Ministerial Conference ought to signal that we are ready to do so.
Pascal Lamyis Director-General of the World Trade Organization. This commentary is published by DAILY NEWS EGYPT in collaboration with Project Syndicate (www.project-syndicate.org).


Clic here to read the story from its source.