NEWSLETTER ISSUE #5/2018
TRADE and the WTO
The WTO Chairs Programme, now in its fourth year, continues to expose TRADE team members to the latest conversations about trade and development opportunities and challenges in different parts of the world and allows them to rub shoulders with experts in a wide range of fields. Over the past few months, two events in the Chairs Programme calendar have stood out: the WTO Public Forum in Geneva, Switzerland and the WTO Chairs Conference in Buenos Aires, Argentina.
The annual WTO Public Forum brings together policymakers, analysts, development specialists, academics and business people to debate the most pressing issues impacting the pace and direction of global trade and to look at how economies are faring in a fast-changing world. The theme of the 2017 Public Forum, which took place from 26-28 September, was ‘Trade behind the headlines’ in recognition of the need to move beyond generalities and, in the words of WTO director-general Roberto Azevêdo, ‘get into the heart of the issues at hand’.
In keeping with this theme, the WTO Chairs session at the Public Forum (attended by Prof Wilma Viviers and two colleagues from TRADE, Dr Carli Bezuidenhout and Prof Marianne Matthee) focused on the potential of trade and trade policy to become drivers of more inclusive economic growth. In delivering their paper, titled ‘Inclusive growth and wage inequality: the case of South African manufacturing exporters’, Dr Bezuidenhout and Prof Matthee explained that exporting is typically associated with the payment of higher wages to (often more highly skilled) workers, giving rise to wage inequality between exporting and non-exporting firms – which flies in the face of the economic inclusiveness that a stronger export focus in a country is supposed to engender. While the export sector in South Africa is ripe for expansion and diversification, policymakers must engage in a careful balancing act to advance the interests of exporting firms without sowing the seeds of discord among non-exporting firms whose workforce may be at a relative disadvantage on the remuneration front.
‘From a policymaking point of view,’ commented Prof Matthee, ‘one cannot simply look at increasing exports as a way of achieving more inclusive growth. Policies need to support specific types of exporting firms – that is, those that have the potential to grow and become more productive. It is these types of firms that have the potential to employ more people and pay higher wages.’
Still on the topic of the Public Forum, Prof Viviers was also the moderator at a joint session with the ICTSD (International Centre for Trade and Sustainable Development) whose theme was ‘Driving inclusive growth and enhancing intra-African trade through services sector development’. Prof Viviers remarked that services had great potential to give southern African countries a new lease on life economically, but that much has to happen at the policy level to change mind-sets and clear existing hurdles. According to other presenters at the session, if countries are to realise sustainable growth in their services sectors, they must achieve efficiency throughout the whole services environment, have a strong regulatory framework in place, and pay attention to the specific needs of SMEs.
The WTO Chairs Conference on 7 December 2017 in Buenos Aires was staged to coincide with the WTO Ministerial Conference XI which took place in the Argentinian capital from 10‒13 December 2017. Against the backdrop of rising geopolitical tensions and economic uncertainty in the world, the Conference covered three main themes: poverty alleviation through trade; trade ‘behind the headlines’; and promoting connectivity. Prof Viviers spoke about the work that she and her team were doing on the services sector in South Africa and how a spike in services exports could significantly enhance the country’s growth and development prospects. Dr Adelia Jansen van Rensburg and Ms Ali Parry gave a presentation on a research project between TRADE and South Africa’s Department of Trade and Industry involving the development of a conceptual framework and action plan as a stepping stone towards the formulation of a national services trade strategy. Among the strategic priorities that have been identified are the need to tackle the problem of limited services data in South Africa, clarify stakeholder roles across the different service sectors, and fund more services-related research. Commenting on the research project, Mr Pierre Sauvé, a trade specialist at the World Bank, said that the conceptual framework originated by the TRADE team could be of interest to other developing countries facing similar challenges to those of South Africa.
TRADE and the WTO
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