Trade

1
Trade
Doing Business with the World - The new role of
corporate leadership in global development
Geneva, September 2007
World Business Council for
Sustainable Development
2
Overview

• The global view
• Snapshots of recent growth

3
The global view

• Over three consecutive years of
• broad-based global economic growth

The growth rate of output in developing economies
(6.9) was double that of developed economies
(3.0).1
Yet 44 developing countries did not reach growth
rates above 3 in GDP per capita.1
Source World Bank. 2007. Global Economic
Prospects. http//siteresources.worldbank.org/INTG
EP2007/Resources/GEP_07_Overview.pdf
4
Snapshots of recent growth
Diverging trends in commodity prices3
The developing country share in world merchandise
exports reached 31 in 2004, its highest since
1950.4
Real merchandise trade growth by region,
20041(Annual percentage change)
Oil prices continue to rise2
Sources 1World Trade Organization. 2005 Press
Release. Developing countries goods trade share
surges to 50-year peak. 2World Bank. 2007.
Global Economic Prospects. 2007 3Ibid.
5
Needs Challenges

• Societal needs
• What are the key challenges?
• Overall trade restrictiveness index

6
Societal needs

• Increased capacity and infrastructure to produce
  goods
• Reduction of trade barriers
• Increased trade facilitation
• Better transport networks
• Access to shipping ports

What are the needs?
What are the barriers to trade?
Source World Bank/IFC. Doing Business in 2006.
7
What are the key challenges?1

• At the national level
• Domestic demand and subsistence needs limit
  capacity
• Lack of production capacity and outmoded
  facilities
• Infrastructure constraints
• Ineffective government policies and poor
  regulatory frameworks
• Tariff-related challenges
• Restrictive trade tariffs
• Agricultural trade distortions
• Stalled talks of the "Doha Development Round"

8
Overall trade restrictiveness index
Changes in OECD OTRI between 2002 and 2005 as
tariffs fall, non-tariff policies become more
important
High-income countries OTRI, overall and toward
low income countries, 2005
Source for graphs The International Bank for
Reconstruction and Development and The World
Bank. 2006. Global Monitoring Report 2006.
9
Opportunities

• What are the opportunities?
• Key messages

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What are the opportunities?

• Increase trade facilitation1
• Customs modernization
• Trade-related infrastructure
• Inland transit
• Logistic services
• Information systems
• Ports efficiency
• Provide expertise and technology transfer to
  producers in developing countries
• Engage with the Aid-for-Trade program
• Support Doha Round of Trade talks

11
Key messages

• For business, investing in improved health
  systems can
• Increase trading opportunities
• Diversify competitive sources of supply
• Raise awareness among governments and
  inter-governmental organizations of the need to
  improve trade facilitation

• For governments, an effective policy framework
  for improved health can
• Create a fully integrated global trade regime
• Stimulate all forms of economic activity related
  to the export and import of goods and services
• Improve competitiveness by reducing transaction
  time and costs

12
www.wbcsd.org/web/development.htm