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Emerging Trade Issues for Small Developing Countries SOOBRAMANIEN WORRALL / Emerging Trade Issues for Small Developing Countries The world economy has undergone tremendous change during the past decade, with a range of emerging issues Scrutinising the Horizon influencing global trade and coming to the fore in COUNTRIES DEVELOPING SMALL FOR ISSUES TRADE EMERGING discussions among policy-makers and trade negotiators. Edited by Teddy Y Soobramanien and Leah Worrall Whether these issues will or should be addressed within the multilateral context as part of a trade agenda is still being debated, but inevitably countries need to engage with these policy issues and the implications for their economies. In light of this changing international landscape, small developing countries need special support to effectively participate in the ongoing discussions on emerging issues in the various international bodies, including the WTO. This publication seeks to inform and help Commonwealth small developing countries adapt to emerging issues such as climate change, e-commerce, the implementation agenda of the Sustainable Development Goals (SDGs) and the new role of Micro, Small and Medium-sized enterprises (MSMEs) and GVCs within global trade. Finally, it also addresses the systemic issues that impact on the participation of these countries in the multilateral trading system and approaches to advance the WTO negotiations. ISBN 978-1-84929-172-9 7818499 291729 P15408_TRD_Emerging_Trade_Small_Dev_Ctries_COVERS_S_Dixon.indd 1-3 28/07/2017 10:04:58 Emerging Trade Issues for Small Developing Countries Scrutinising the Horizon Edited by Teddy Y Soobramanien and Leah Worrall Commonwealth Secretariat Marlborough House Pall Mall London SW1Y 5HX United Kingdom © Commonwealth Secretariat 2017 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or otherwise without the permission of the publisher. Published by the Commonwealth Secretariat Copyedited by Roo Griffiths Typeset by NovaTechset Cover image by Igor Kovalchuk / Alamy Stock Photo Printed by xx Views and opinions expressed in this publication are the responsibility of the authors and should in no way be attributed to the institutions to which they affiliated or to the Commonwealth Secretariat. Wherever possible, the Commonwealth Secretariat uses paper sourced from responsible forests or from sources that minimise a destructive impact on the environment. Copies of this publication may be obtained from Publications Section Commonwealth Secretariat Marlborough House Pall Mall London SW1Y 5HX United Kingdom Tel: +44 (0)20 7747 6500 Email: [email protected] Web: www.thecommonwealth.org/publications A catalogue record for this publication is available from the British Library. ISBN (paperback): 978-1-84929-172-9 ISBN (e-book): 978-1-84859-964-2 iii Foreword There has seldom been a time when international trade has featured so prominently as a topic on the global agenda, and it is currently a principal focus for Commonwealth co-operation. The meeting of Commonwealth trade ministers in London in early 2017 marked a very significant interest in the potential for trade among our member countries, and this is expected also to be a major feature of the 2018 Commonwealth Heads of the Government Meeting – the Commonwealth Summit being hosted by the United Kingdom. An innate understanding and sense of commonality within the rich diversity of our member countries results in measurable ‘Commonwealth Advantage’. It is rooted in our shared language, the Common Law – which also happens to be the basis for international law, our similar systems of parliamentary democracy, administration and regulation. Research we have undertaken at the Commonwealth Secretariat shows that bilaterally, Commonwealth partners tend to trade 20 per cent more, and generate 10 per cent more foreign direct investment inflows than would otherwise be the case. So it makes good business sense for us always to be scanning the horizon in order to find ways of making even more of this unique Commonwealth asset, so that together we can grow prosperity and build resilience for the good of all our citizens. Our Commonwealth Secretariat knowledge base has been acquired from years of pioneering collaboration with our member countries as they have become more integrated within the global economy. The majority of Commonwealth countries are classified as small states or Least Developed Countries, or are located in disadvantaged regions. Lack of capacity hampers their efforts to participate more fully in the global trading system. Finding new ways of developing competitiveness for these member countries, and creating environments that are conducive to the growth of small and medium enterprises, are important factors in improving their trade performance. This publication considers emerging trade issues from the perspective of countries needing to build competitiveness and resilience, and offers insights and guidance on formulating policies on various emerging trade issues – particularly within the context of the 2030 Agenda for Sustainable Development and the Sustainable Development Goals. iv Emerging Trade Issues for Small Developing Countries Whether we are considering global and regional value chains, or more specific areas such as ecommerce and the digital economy, the research and policy guidance drawn together in these pages, together with critical reflection on the economic and geopolitical forces, suggests that Commonwealth links and collaboration are likely to be major influences on the future trading arrangements for our member countries. The Right Hon Patricia Scotland QC The Secretary-General of the Commonwealth v Acknowledgements The editors would like to thank Dr Vinaye Ancharaz for reviewing the publication and providing thoughtful feedback. Dr Mohammad Razzaque, Head of International Trade Policy Section and Paulo Kautoke, Director, Trade Division at the Commonwealth Secretariat provided useful support and insights to the editors and contributors. There are many other staff members at the Commonwealth Secretariat who contributed their time and efforts to this publication such as David Banks and Timothy Inman. A special thank you to Sherry Dixon for countless hours of support and guidance. vii Contents Foreword iii Acknowledgements v List of figures xi List of tables xiii Contributors xv Abbreviations and acronyms xix 1 Emerging Trade Issues for Small and Least Developed Countries – Scrutinising the Horizon 1 Teddy Y Soobramanien and Leah Worrall 1.1 Multilateral trade context 1 1.2 Widening the global context 3 1.3 A case for small states 6 1.4 Commonwealth small states trade pattern 10 1.5 Chapters overview 12 References 12 2 Post-Nairobi: Perspectives on Potential New Issues in the World Trade Organization 15 Rashid S. Kaukab 2.1 Background and context 15 2.2 Potential new issues: Evolution and analysis 17 2.3 Ways forward: Some reflections and recommendations 33 Notes 35 References 36 3 The Imperatives of More Effectively Leveraging Trade and Advancing the Sustainable Development Goals in Small States 39 Poorvi Goel 3.1 Introduction 39 3.2 Small states’ recent trade performance 41 3.3 Reflection of small states’ trade interests in the Sustainable Development Goals 44 3.4 Overcoming distance and other trade barriers 48 3.5 Policy options and way forward 49 viii Emerging Trade Issues for Small Developing Countries Annex 51 Notes 54 References 54 4 Effectively Influencing Value Chain Governance and Implementing SDG 14: ‘Life Below Water’ 57 Jodie Keane 4.1 Introduction 57 4.2 Non-equity modes of global value chain participation: Contract farming and fishing 58 4.3 SDG 14’s trade-related implementation agenda 60 4.4 Value addition in the fisheries sector 63 4.5 LDC-specific trade issues in the fisheries sector 68 4.6 Available evidence on international support measures 74 4.7 Conclusion 74 Notes 76 References 77 5 Trade Sustainability: Trade, Climate and Biodiversity Policy and Finance Inter-linkages 81 Leah Worrall 5.1 Introduction 81 5.2 Global trade trends in brief 82 5.3 Trade sustainability in the international policy context 83 5.4 International public financing options 89 5.5 Conceptualising the inter-linkages 97 5.6 Conclusion 104 Notes 106 References 107 6 E-Commerce Development: Policy Considerations for Small Developing Countries 111 Teddy Y. Soobramanien, Claudius Preville and Anthony Ming 6.1 Introduction 111 6.2 What is e-commerce and why is it important to study it? 111 6.3 How can e-commerce be measured? 112 6.4 Assessing readiness for e-commerce through e-government 113 6.5 E-commerce on the international agenda 120 6.6 The economic impact of e-commerce 123 6.7 E-commerce, a catalyst for development: The case of small countries 124 6.8 The regulatory and other legal requirements for e-commerce 128 6.9 Conditions for the development of e-commerce in small countries 134 6.10 Conclusion 135 References 136 Contents ix 7 Post-Brexit Trade with Small Developing Countries: Making it Development-Friendly 139 Brendan Vickers 7.1 Introduction 139 7.2 Trade between the UK and Commonwealth small developing countries 140 7.3 Brexit concerns for small developing countries 141 7.4 Post-Brexit UK trade policy options 145 7.5 Post-Brexit trading arrangements and the Commonwealth 147 7.6 Conclusion 148 Notes 149 References 150 8 The Emergence of Micro, Small and Medium-sized Enterprises: Enhancing their Role in International Trade
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