Trade Policy at Work

Recovery through Open Trade: Towards Inclusive, Resilient and Sustainable Trade Policy Post Covid-19

The Covid-19 pandemic has shown the importance of free and open trade, not least for developing countries. Trade will be instrumental for sustainable recovery and employment, and for building back better and greener. Despite the enormity of the challenge, this can be an opportunity to build back better through inclusive, resilient and sustainable trade policy. This session will focus on identifying the pathways to assist developing and least-developed countries in this regard.

Setting the scene, the Director General for Trade at the Swedish Ministry for Foreign Affairs, Per-Arne Hjelmborn, outlined five key areas to achieving a free, fair and sustainable trade and to help inclusive development prosper: (i) making trade a tool for sustainable development and green transition, taking advantage of the next WTO ministerial conference to take concrete steps towards removing barriers to climate-friendly goods and services; (ii) the need progress on the trade and health agenda, given the key role of trade in accessing medical products and services in the face of Covid-19; (iii) the need more cooperation on vaccines; (iv) the need to ensure that trade policy benefits women and men equally; and (v) the need to update the rulebook on digitalization and e-commerce, for which the ongoing joint statement initiative is a unique opportunity to facilitate the operations and market access of businesses and MSMEs in this field. According to him, aid for trade has a crucial support role to play across these areas

With regard to the role of the WTO, Pradeep S. Mehta, Secretary General of CUTS International, noted that bringing the WTO dispute settlement system back to life is not the only elephant in the room that needs to be addressed. The ongoing pandemic is another one, which will require members to effectively collaborate; particularly on vaccines where agreeing on a TRIPS waiver would be much needed. Also, there is need to recognise that there is no one size fits all solution, but that tailor-made approaches are needed based on each country’s specificities.

In ensuing panel discussions, it was recalled that the Covid-19 pandemic has had a devastating impact on LDCs’ trade and poverty levels through, inter alia, shrinking supply and demand, disruptions in global supply chains, reduced investment etc. Among the wide range of affected sectors, tourism, hospitality, transport and labour-intensive manufacturing were particularly mentioned. In reaction to the crisis, 335 trade-related measures were introduced by members including restrictions (many of which were later lifted). Trade tensions among neighbouring countries were also reported.

While leveraging e-commerce and digital innovation can be part of adaptation strategies, many developing countries are faced with challenges in this area which should be prioritised for capacity building and technical assistance. In particular, key bottlenecks include limited access to infrastructure, skills and capacities, lack of national or regional e-strategies etc.

Trade in medical products was a key area of focus, especially as vaccines need to be imported for the vast majority of countries. Reflecting on how to ensure that trade in medical products continues to flow in potential future crises, speakers mentioned the importance of, inter alia: (i) trade facilitation, both physical and digital; (ii) international cooperation needed; (iii) transparency on essential and medical goods; (iv) disciplining export restrictions etc.

Looking ahead, speakers also explored possible avenues to build back better, by increasing trade resilience while leaving no one behind. The need to maintain economic integration and trade openness was stressed, as well as making sure that trade benefits are shared equally with a particular attention for women, youth and other vulnerable communities. It was recalled, for instance, that female entrepreneurs face greater challenges in accessing finance, business networks, policy-making circles etc. In this regard, ongoing initiatives and policies promoting the participation of women in trade were welcome, and should be prioritised for Aid for Trade support.

On the panel were Robert Watt, Communications Director and Head of Strategic Policy Engagement, Stockholm Environment Institute; Per-Arne Hjelmborn, Director General for Trade at the Ministry for Foreign Affairs, Sweden; H. E. Mr. Mani Prasad Bhattarai, Ambassador and Permanent Representative of Nepal; Jane Nalunga, Executive Director, SEATINI Uganda; Anders Ahnlid, Director-General, National Board of Trade, Sweden; Julia Nielson, Deputy Director, Trade and Agriculture Directorate, OECD; Rashid S. Kaukab, Executive Director, CUTS International, Geneva.

Reporting by Julien Grollier