Aid for Trade at a Glance 2015
Reducing Trade Costs for Inclusive, Sustainable Growth
The Aid for Trade Initiative has allowed for the active engagement of a large number of organisations and agencies in helping developing countries and especially the least developed build the infrastructure and supply-side capacity they need to connect to regional and global markets and improve their trade performance. The new development paradigm under the post-2015 Development Agenda requires an integrated approach to ensure that the aid for trade achievement leads to inclusive and sustainable development outcomes. Embedding trade cost at the centre of the Aid for Trade Initiative provides an operational focal point for such action among a broad collation of stakeholders.
The 2015 joint OECD/WTO publication Aid for Trade at a Glance focusses on how reducing trade costs will help in achieving inclusive and sustainable economic growth. The publication contains contributions from the Enhanced Integrated Framework, the International Trade Centre, the United Nations Conference on Trade and Development, and the World Bank.
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How are trade costs evolving and why?
Recent advances in trade theory and empirics make it possible to infer trade costs from the observed pattern of trade and production across countries. This chapter uses that insight to provide evidence on recent trends in trade costs, focusing on the developing world. The data show that developing countries, particularly low income countries, suffer from relatively high trade costs. They risk continued marginalisation from the global trading economy. However, empirical research suggests a variety of policies that can be effective in reducing trade costs, such as improving trade facilitation and logistics performance, boosting connectivity and improving the business environment. There is scope to tackle trade costs on a regional basis – and in a way that is strongly compatible with the aims and values of the multilateral trading system. Going forward, it will be important for partner countries and donors to learn from successful examples of on-the-ground projects that have reduced trade costs sustainably.
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