Building Poor Countries' Trade Capacity

This is a background paper prepared for an informal expert meeting of the Development Assistance Committee of the OECD. It discusses technical assistance on trade for the least developed and poorer countries and tries to explore alternative partnership approaches for building new trade capacity. It focuses on trade policy more than on trade promotion strategies. The paper identifies four different types of technical assistance: 1. Raising the awareness of key policy makers and actors both of how trade policy operates globally, and what the options are. 2. Help with the implementation of multilaterally or regionally agreed trade arrangements. 3. Help to deal with export related implements in foreign markets. 4. Enhancement of negotiating capability, both multilaterally and regionally. It emphasizes how a ranking across these types of assistance needs to be informed by a sense of the trade situation for these countries. The pattern of poorer country trade has been changing in recent years, with sharp export growth in countries such as Bangladesh, and also some African countries (such as Uganda). This is beginning to generate trade conflicts with OECD countries in areas such as textiles and apparel (MEA) and even antidumping. Poorer countries are also increasingly becoming involved in outsourcing trade (relocation of assembly operations to a poorer country by a large OECD company, possibly in an export processing zone); and trade between poorer countries and other developing countries is growing more rapidly. After many years of stagnant trade growth, poorer country trade is now growing at rates which compare to those of all developing countries. Special opportunities seem to be present in services trade (growing globally at rates higher than goods trade), and (in the future) electronic commerce.