Economic research and trade policy analysis

In Part III of this book a number of case studies on domestic regulation in services sectors are presented. These case studies concern the following sectors: legal services telecommunications information and communications technology mobile banking financial services higher education logistical services postal services and retail food distribution.

Over the past decades natural hazard-related and man-made disasters have increased in both frequency and severity. The effects on society and on the economy of these disasters and the prospect of even greater risks and disasters in the future linked to the challenges of climate change have underlined the factors and strategies needed to avoid mitigate adapt to and prepare for shocks as well as to manage risks and vulnerabilities. The term “economic resilience” has become a popular one to describe these broad diverse strategies.

Le commerce international des combustibles et des produits pharmaceutiques s’est développé à un rythme supérieur à la moyenne ces dernières années ce qui a modifié la structure du commerce mondial des marchandises. Ces modifications sont analysées ci-après.

Although small and medium-sized enterprises (SMEs) represent the vast majority of firms worldwide their participation in international trade remains limited relative to their share of overall economic activity and employment as compared to large firms. The rise of the digital economy could however open a range of new opportunities for small firms to play a more active role in global value chains (GVCs). This chapter reviews evidence of SME participation in international trade and production networks and looks at how the digitalization of our economies is already affecting or could affect future SME contributions to GVCs. New research by Lanz et al. (2018) finds evidence that digitally-connected SMEs in developing countries tend to import a higher share of their inputs than non-digitally-connected firms. Additionally it is shown that this positive digital effect is greater for SMEs than it is for large firms. The chapter reviews the various opportunities that the digital economy opens for SMEs especially in terms of cost reductions and the emergence of new business models but also discusses policy measures that could be taken to promote SME participation in GVCs. Indeed significant challenges remain for SMEs to enter GVCs some of which are exacerbated by the new digital economy. A holistic approach that combines investment in ICT infrastructure and human capital with trade policy measures and measures to improve the business environment access to finance and logistics and promote innovation and R&D is necessary. Improving the availability of data would also help to better understand and integrate SMEs in GVCs.

In July 2012 the WTO General Council agreed on a set of new and improved guidelines to facilitate and accelerate negotiations on the accession to the WTO of least-developed countries (LDCs). The process of acceding to the WTO is complex time-consuming and resource-intensive for candidate countries and for LDCs which have limited institutional and administrative capacity in particular. The WTO accession process is very much a political process and requires countries to undertake far-reaching domestic reforms in order to be in a position to implement WTO rules from day one of membership as well as to benefit from MFN market access from WTO members and vice versa. The prolonged accession process is designed to enable acceding LDCs (and others) to acquire the knowledge and expertise to negotiate not only the terms and conditions for their membership but also to function as viable members of the rules-based system. This chapter examines the enhanced guidelines and asks whether the WTO needs to improve the procedures for the benefit of LDCs and of the WTO. It examines how the WTO accession process and procedures as well as the scope of the reforms it requires compare to EU considerations in the process of its enlargement and argues that while the enhanced LDC accession guidelines have made an important contribution some additional steps may need to be contemplated in the future. However before a further enhancement is contemplated it must be understood that the accession process and the substance of WTO accession negotiations in all serious institutions are based on a partnership. This is a fundamental lesson from all successfully completed accessions and enlargement processes. The process is neither unilateral nor automatic.

The World Trade Organization (WTO) is a relatively new international organization. However it is responsible for a system that is over 50 years old. Established on 1 January 1995 the WTO replaced the General Agreement on Tariffs and Trade (GATT) which dated back to 1948. This was a consequence of a decision taken by governments after seven and a half years of negotiations (the "Uruguay Round") which ended in 1994. With the WTO's creation the rules were expanded to new areas. While the GATT dealt with trade in goods only the WTO covers trade in services and intellectual property as well. There are also some areas such as textiles agriculture and sanitary and phytosanitary measures where the WTO goes beyond the GATT by having established specific trade rules. Under the WTO the procedure for settling trade disputes has also been strengthened.

India opened its domestic market to international trade in the early 1990s. The decision had profound implications on the development trajectory of the country. Trade opening allowed the country’s firms to source inputs more cheaply and increase their competitiveness. At the same time it meant that firms in India were exposed to increased competition from abroad while consumers enjoyed lower prices for final goods. While the trade opening helped boost economic growth it required an adjustment of capital and labor within and across sectors.

A country’s bid for WTO membership can promote a feeling of challenge and uncertainty among members of the private sector as the long-established methods of conducting business are susceptible to undergoing considerable change. In order to overcome the potential resistance to this change acceding governments have responded to the concerns of their businesses by adopting strategies to raise awareness of the long-term benefits of reform during the negotiating period. In this chapter we document some of the benefits related to trade and investment for Article XII members that have undertaken awareness raising strategies and necessary reforms during their accession processes. This chapter underlines that accession commitments which are critical to bringing about domestic policy and regulatory reforms need to be implemented in the right spirit to develop business competitiveness in the long run.