Supporting trade negotiations with sustainable development impact assessments

Concerns regarding equitable design of the trade governance system call for complex answers. One element of this reflection is to better assess the potential impacts of prospective trade commitments. Over the past three decades, models used to estimate potential gains from trade have overstated the gains and have failed to adequately account for the costs such as loss of tariff revenue, loss of market access, administrative costs, opportunity costs of directing government resources to trade administration, and more. This essay argues that a comprehensive approach to estimating the impacts of trade disciplines, particularly with respect to social and sustainability issues, could improve the outcomes of trade negotiations as well as the implementation of agreed-upon disciplines, particularly for developing countries. Specifically, sustainable development impact assessments could help developing countries build capacity and identify their policy needs ahead of trade negotiations as well as inform the course of negotiations. Once benefits and costs are better assessed, negotiations could focus on the allocation of these developmental and implementation impacts, particularly for the lowest-income and most capacity-constrained countries.