Global Trade Preference Reform
Randall Soderquist - CGD
Susan Prowse - ODI
This is the first of a series of consultation meetings with key political and economic stakeholders aimed at obtaining comments on how best to achieve trade preference program reform, with an emphasis on coordination across countries.
Trade preference programs are an established mechanism that advanced economies have used to help developing economies increase exports, create jobs, and attract investment, but current programs are often restrictive, complex, and lack coordination across countries. Substantial differences in rules of origin and cumulation, product and country eligibility criteria, tariff levels, and conditionality requirements make it difficult and sometimes impossible for developing countries to participate in these programs and integrate into the global supply chain. Reform and coordination of trade preference programs globally could significantly improve their effectiveness as development tools.
The Center for Global Development (CGD) created a Global Trade Preference Reform Working Group to address this issue, and held its first meeting on the 22nd and 23rd of April, 2009. The Working Group consists of twenty individuals from the public, private, and non-profit sectors in developed and emerging economies that provide trade preference programs for poorer countries. The objective of the Working Group is to provide viable policy recommendations for developed countries, and emerging countries with new programs, to improve and coordinate their programs to better serve development outcomes.
A critical component of the Working Group process is consultation meetings with key political and economic stakeholders to obtain comments on how best to achieve trade preference program reform, with an emphasis on coordination across countries. CGD and the Overseas Development Institute (ODI) will co-host the first consultation group in London on July 3, 2009. The purpose of the meeting is to elicit comments from a select group of European experts on trade preference program reform, including the expansion of duty-free, quota-free eligibility (DFQF) to small and poor countries beyond the least-developed countries (LDC) group, the mutual recognition and coordination of preference-giving countries’ rules of origin provisions, the inclusion of services, government procurement and investment incentives in trade preference programs, and the impact of supply-side constraints and non-traditional barriers to market access as impediments to the utilization of trade preference programs.