Poor countries need better market access – ITC

Wednesday, 12 January 2011 00:01 - - {{hitsCtrl.values.hits}}

Reuters: Increased trade is one of the best ways to fight poverty, so rich countries should do more to open their markets to goods from developing countries, a report issued on Monday said.

The report by the International Trade Centre (ITC), a body that helps developing countries benefit from more trade, said poor countries could also boost each other’s commerce by removing non-tariff barriers such as red tape that hamper exports.

“Poor countries cannot grow and reduce poverty without exports -- thus market access and market entry are critical,” said the ITC, a joint agency of the World Trade Organization and United Nations.

The report said that special, or “preferential”, trading arrangements by rich governments, allowing a range of imports from developing countries to come in duty-free, made a significant contribution.

But the $1.6 billion in tariffs that least developed countries (LDCs), the 50 poorest countries, saved in 2008 from such arrangements was almost matched by the $1.4 billion they still paid in duties on imports to rich economies in the same year, the latest for which comprehensive data are available.

An analysis of trade flows by the ITC showed that developing countries as a whole paid $50.1 billion in tariffs in 2008 to the European Union, United States, Canada and Australia, including $25.3 billion from China and $2.2 billion each from India and Brazil.

Besides duties, non-tariff barriers such as inspections and other forms of red tape also pose serious obstacles to exports.

This was particularly the case with exports into Africa and Latin America, so that policies in many developing countries restrain the potential of South-South trade, it said.

The wide-ranging report also questions the ability of exporters in developing countries to participate in programmes in rich countries promoted by activists and consumer groups to encourage fair trade.

The ITC said there was a lack of evidence about whether such certification programmes fostered sustainable development and improved livelihoods. More research was needed on how voluntary standards work to ensure they were designed correctly.