Reduce trade costs to support growth and development - WTO

GENEVA - businesses and consumers in poorer countries are not gaining maximally from the global trading system because of high costs of trade, the heads of major international agencies have said. High costs arising from delays at borders and other obstacles “suffocate trade, and limit the gains from trade, according to the World Trade Organisation’s (WTO) director general Roberto Azevêdo. “Worse, the burden of high trade costs falls heaviest on the poorest countries, the smallest firms and the lowest income consumers,” Azevêdo said while opening the Fifth Global Review of Aid for Trade on June 30 in Geneva Switzerland. “High trade costs disconnect the economy from international flows of goods and services. They therefore stifle creativity – the motor behind productivity that drives economic growth. We must find ways to further cut trade costs, lower trade barriers, reduce distortive subsidies, and increase people’s capacity to trade, so that the poorest can access more of the benefits that trade can provide,” he said. Other heads of major international agencies also called on the trade and development community to use initiatives like the WTO Trade Facilitation Agreement (TFA) to address high trade costs so that countries can benefit from the global trading system. World Bank president Jim Kim said when countries are effectively integrated into regional and global markets, their poorest citizens can reap substantial benefits; despite some skepticism that trade helps the poor. He cited China, Viet Nam and Cambodia as examples where targeted reforms and openness to trade have boosted exports and substantially reduced the number of extreme poor. More than 1,000 participants from around the world are taking part in the Fifth Global Review, which is examining actions being taken to reduce trade costs so that developing countries, and in particular least-developed countries (LDCs), can participate more effectively in global trade. The conference ends today and is being held on the theme; “Reducing Trade Costs for Inclusive, Sustainable Growth”.

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Reduce trade costs to support growth and development - WTO