To read the full policy brief by the Peterson Institute for International Economics, please click here. 

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LDC exports to Canada in 2017 represented just under $4 billion, around one per cent of total Canadian imports (or, more colloquially, about two hours of Canada-U.S. trade.) Their importance lies in their sector specificity; the majority of manufactured exports are apparel. After the 2003 liberalization, Bangladesh and Cambodia became the second and third largest suppliers of apparel to Canada after China, as much an achievement in import diversification for Canada as in export growth for Bangladesh and Cambodia.

Between 2003 and 2017, Bangladesh’s year-over-year exports to Canada grew at an average rate of 22 per cent, Cambodia’s at 58 per cent, Laos at 17 per cent and Nepal at 10 per cent. On the other hand, Canada’s exports to Bangladesh grew six-fold between 2004 and 2018. Bangladesh is now Canada’s fourth largest importer of pulses.

The 2003 market opening was enabled by of a GATT/WTO rule that facilitates preferential arrangements for countries on the United Nations’ Least Developed Countries list; effectively, the world’s poorest countries. Canada’s initiative was a near-impeccable preferential arrangement. It grew trade in both directions between Canada and some low-cost exporters without the bother of negotiations for bilateral free trade agreements, and without significant trade diversion. Together with the EU liberalization (and subsequent liberalizations in several other countries), it contributed to both export-led growth and poverty reduction in some least developed countries.

Canada’s relationship with these LDCs could change shortly. Along with six developing island countries and mineral-rich Angola, Bangladesh, Myanmar, Laos and Nepal are scheduled for graduation from the UN/WTO list of least developed countries (three were eligible as far back as 2018), and Cambodia has begun to meet the criteria for graduation. Graduation could mean the loss of the preferential tariff treatment that contributed to a rapid increase in exports in the last 17 years. Of the countries that are about to graduate, or have been graduated, the developing island countries export very little to Canada. Angola’s mineral exports enter duty free anyway, but the remaining countries – Bangladesh, Myanmar, Laos, Nepal and at some point Cambodia – are now heavily integrated into the Canadian apparel market. Apparel has become the primary manufactured export for most of these countries. Graduation therefore could have consequences for Canadian consumers, and for economic growth and poverty reduction in the countries concerned. Later, we discuss this problem specifically with reference to Bangladesh.

The earliest date for graduation is 2021; the latest date so far is 2024. Canada may agree to Bangladesh’s request for a three-year deferral from 2021, particularly in light of COVID-19’s impact on the economy, or it could follow the EU, which is reportedly considering a phased-in graduation process of three years, 2021-2024. If LDCs graduate, they will be subject to the tariffs and rules of origin of Canada’s General Preferential Tariff (GPT). Graduation is not restricted to Canada and the EU. During the World Trade Organization’s Doha round of multilateral trade negotiations, several WTO members offered similar concessions; graduation from the LDC list will require WTO members to consider whether to extend or terminate preferential treatment for the graduating LDCs.

Canada can continue duty-free treatment – to grandfather the zero tariff and maintain LDC treatment for as long as it deems desirable. It is also in Canada’s interests to do so; the relationship with the Asian LDCs has been a win-win for both sides. Graduation could cost Canadian consumers and exporters alike and if both the EU and Canada graduate these countries, it could stall economic growth and poverty reduction efforts in the LDCs.

This paper maintains that while COVID-19’s impact makes a short-term deferral likely, it makes more sense to look long term at both the trade and development implications of graduation for both Canada and the LDCs. It recommends that Canada continue preferential treatment for an extended period of time or simply leave the low tariffs in place.

Fauzya Moore is an Ottawa-based consultant and writer. She has worked as a Senior
Economic Advisor at the various iterations of Global Affairs Canada, and also as a Senior Advisor on Governance at the Treasury Board of Canada. She is also a graduate of the Harvard Kennedy School (2009) where she held both a Fulbright scholarship and a fellowship from the Ash Centre for Governance and Innovation. She has worked in both the developed and developing world.

To download the full report, please click here.

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DFC’s Roadmap for Impact (Roadmap) takes into account global development needs to establish portfolio-wide development priorities. The Roadmap identifies opportunities to increase private investment in low-income countries (LIC) and lower middle-income countries (LMIC)—targeting 60 percent of total portfolio projects in LICs, LMICs or fragile states. It also recognizes the importance of supporting projects that are significantly developmental or that target the most vulnerable populations in upper middle-income countries (UMICs). In addition, the Roadmap defines priority cross-cutting development themes and sectors, and it establishes investment goals and development metrics in order to focus DFC’s investment activities and measure our progress.

The Roadmap outlines capabilities and resources that are required to achieve these development goals, with an emphasis on enhanced coordination within DFC and across USG initiatives, departments and agencies, development finance institutions (DFIs), international financial institutions (IFIs), and other members of the development community. It also emphasizes the importance of transparency and enhanced social and environmental standards in the design and sustainable execution of DFC-supported projects in order to demonstrate that the U.S.-led model of development advances the best interests of Americans, host countries, and the planet whenever we invest.

The Roadmap does not reflect an exhaustive list of the sectors where DFC invests; rather, it focuses on sectors where DFC investments and technical assistance can have the greatest, measurable development impact over the next five years. Working closely with newly created U.S. Embassy deal teams, particularly with the Departments of State’s and Commerce’s DC Central Deal Team, as well as with DFC liaisons at U.S. Agency for International Development (USAID) missions worldwide, DFC can expand its client base and broaden the markets it serves. It will not be easy; and it will require additional resources, private capital to invest alongside, changes to processes, and patience. But DFC is committed to prioritizing the most highly developmental projects in the most underserved communities worldwide.

To download the full report, please click here.

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Over the past seventeen years, exports from several LDCs to Canada have grown and diversified, changing the profile of Canada from a traditional market for unprocessed minerals and raw food to a destination for imports of low cost, labour intensive manufactured merchandise. Bangladesh and Cambodia now rank after China as highest exporters of apparel to Canada, several others show continued growth in exports to the Canadian market.

Canada supports the LDCs in many ways including a large military and development presence in Afghanistan, in rebuilding Haiti, in promoting economic growth in Bangladesh and Ethiopia and so on. Further reducing or eliminating tariffs on LDC exports, particularly for small exporters to Canada is an important part of this work, but it is often a forgotten issue.

Critics of the LDC liberalizations may argue that just a few LDCs benefitted; supporters will maintain that tariff reductions usually benefit just a few countries. Both are right; more could be done to help LDC exporters in the 47 LDCs take advantage of the Canadian market, which is now wide open to them. More could be done to enable small exporters and producers benefit from the LDCT.

But in the absence of multilateral initiatives to open advanced country markets to first tier manufactures from the poorest countries, and with the failure of the Doha Round of Multilateral Trade Negotiations, the results of the LDCT liberalizations are a credible, and important contribution to development through trade.

To download the full paper, please click here.

Fauzya Moore is an Ottawa-based consultant and writer, a graduate of Harvard’s Kennedy School, and former senior advisor on trade and development in Canada’s Department of Foreign Affairs, Trade and Development.

© Fauzya Moore, 2020

The post Trade and Development: Canadian Tariffs and the Least Developed Countries appeared first on WITA.

To download the full article, please click here.

Lenis Saweda O. Liverpool-Tasie is an Associate Professor in the Department of Agricultural, Food, and Resource Economics at Michigan State University.

Ayala Wineman is a Research Associate in Evans School of Public Policy & Governance at University of Washington.

Sarah Young is a Senior Librarian at Carnegie Mellon University.

Justice Tambo is a Socio-Economist at the Centre for Agriculture and Bioscience International.

Carolina Vargas is a Master’s/PhD Student in the Department of Agricultural, Food, and Resource Economics at Michigan State University.

Thomas Reardon is a Professor and MSU Distinguished Faculty in  Department of Agricultural, Food, and Resource Economics at Michigan State University.

Guigonan Serge Adjognon is an Agricultural Economist on the Development Impact Evaluation (DIME) Team at theWorld Bank.

Jaron Porciello is an Associate Director for Research Data Engagement in the Department of Global Development at Cornell University.

Nasra Gathoni is part of the faculty of Health Sciences Librarian at Aga Khan University.

Livia Bizikova is the Lead, Monitoring and Governance, Tracking Progress at International Institute for Sustainable Development.

Alessandra Galiè is a senior scientist at the Gender International Livestock Research Institute.

Ashley Celestin is a Master of Professional Studies candidate in International Agriculture and Rural Development at Cornell University. 

The post A Scoping Review of Market Links Between Value Chain Actors and Small-scale Producers in Developing Regions appeared first on WITA.

To read the original article from The Journal of International Trade & Economic Development, please visit here

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The U.S. Department of Labor (USDOL or the Department) has produced this ninth edition of the List of Goods Produced by Child Labor or Forced Labor in accordance with the Trafficking Victims Protection Reauthorization Act (TVPRA), as amended. The TVPRA requires USDOL’s Bureau of International Labor Affairs (ILAB or the Bureau) to “develop and make available to the public a list of goods from countries that [ILAB] has reason to believe are produced by forced labor or child labor in violation of international standards” (TVPRA List or the List; 22 U.S.C. § 7112(b)(2)(C)). It also requires submission of the TVPRA List to the United States Congress not later than December 1, 2014, and every 2 years thereafter (22 U.S.C. § 7112(b)(3)).

The Frederick Douglass Trafficking Victims Prevention and Protection Reauthorization Act of 2018 expanded ILAB’s mandate to require the TVPRA List to include, “to the extent practicable, goods that are produced with inputs that are produced with forced labor or child labor” (22 U.S.C. 7112(b)(2)(C)).

The TVPRA directs ILAB “to work with persons who are involved in the production of goods on the list … to create a standard set of practices that will reduce the likelihood that such persons will produce goods using [child labor or forced labor],” and “to consult with other departments and agencies of the United States Government to reduce forced and child labor internationally and ensure that products made by forced labor and child labor in violation of international standards are not imported into the United States” (22 U.S.C. § 7112(b)(2)(D)–(E)).

Asking the Right Questions to Trace Labor Abuses in Global Supply Chains

What do product quality control measures have in common with efforts to eliminate child labor? In a word: traceability. In the case of product safetyrelated issues, traceability is crucial as quality control experts and operations managers race to link the faulty product to the source. Just as in identifying the origin of defective products to limit harm, the world also has sought to trace the origins of various goods and products as a way to combat child labor and forced labor in those supply chains by asking the right questions: “Who made this and under what conditions?”

Global supply chains have created tremendous prosperity for our society as a whole, lifting millions out of poverty and providing livelihoods for many more; however, problems remain. Violations such as child labor, forced labor, and human trafficking have persisted as supply networks have continued to grow ever more complex. The latest global estimates highlight that 152 million children remain in child labor and 25 million adults and children toil under conditions of forced labor, including in global supply chains that crisscross our globe. (1) Many businesses at all stages of the supply chain, including major global brands, acknowledge these abuses. Businesses can play a critical role in improving working conditions for workers around the world – and many companies have recognized the economic benefit of doing so. These global conditions and the motivations of companies and governments to rectify these injustices have led to an increasing array of research on global supply chains with ILAB playing a pivotal role. ILAB is a leading voice and advocate through its support of research, tools, and technical assistance to aid those who seek to clean up global supply chains, and partnership with the private sector remains essential to matching these aspirations to reality. 

To read the full report click here. 

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It begins by discussing the differences between Special and Differential Treatment (S&D) and Aid for Trade (AfT) and affirms that in today’s environment, developing countries and LDCs should never miss an opportunity to engage in trade negotiations with more economically advanced trading partners since even if limited market access gains are on offer, the prospect of obtaining other concessions in different parts of the AfT agenda could still make for tangible and significant negotiating outcomes for these countries.

This paper focuses on negotiating strategies with respect to two kinds of broadly formulated AfT commitments. The first is the infrastructure to alleviate supply-side constraints across transport infrastructure, testing and certification capacity, and communications network infrastructure for online connectivity. The second set of AfT commitments this paper seeks to provide developing country negotiators advice on is in the area of trade finance, which has become such a prevalent problem for small and medium-sized enterprises (SMEs) in developing countries that even the WTO Secretariat has started to refer to this as a non-tariff measure.

As in all negotiations, the key to success here is preparation. This paper provides some advice on how best to prepare, formulate and substantiate any AfT requests in order to both maximize the chance of success as well as maximize the difficulty for negotiators from developed countries (who must decide on whether to grant an AfT request) to decline any reasonable requests that are tabled.

AWP195 Simon Lacey _1

To view the original research, please click here

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