Natural Disasters and Trade Study I Acknowledgements This report has been prepared as part The national authorities of Dominica, of WTO research conducted under the Fiji, Nepal, St Lucia, Tonga and Vanuatu responsibility of Shishir Priyadarshi, provided valuable support in facilitating Director, Development Division. Research country research, including through for the trade and natural disaster project interviews with the private sector. was managed by Michael Roberts, Our thanks also to all the persons Head, Aid for Trade Unit. The authors who agreed to be interviewed. Useful included Arne Klau (Trade Policy Review comments and inputs in the research Division), Ankai Xu (Economic Research work have also been received from the and Statistics Division) and Masahiko International Federation of the Red Haraguchi, Postdoctoral Fellow at Cross and Red Crescent, International the Belfer Center for Science and Telecommunications Union, Organization International Affairs at Harvard Kennedy of Eastern Caribbean States, Pacific School, Harvard University. Island Forum Secretariat, United Nations Office for the Coordination of Research inputs and written contributions Humanitarian Affairs, United Nations to this report were provided by Justine Office for Disaster Risk Reduction, United Lan, Rainer Lanz, Theo Mbise, Emmanuel Nations Environment Programme, World Orkoh, Wanjiku Waweru, Liliana Popescu, Customs Organization, World Bank Mario De Gortari Rangel, (Development Group. Division) and Robert Teh (Economic Research and Statistics Division). Country research, the organization of thematic Symposia and production of Several divisions at the WTO Secretariat the research reports was coordinated by provided valuable input and comments Barbara Marcetich, Vasanthi Saverimuttu, on the natural disasters research Staci-Marie Sydney and Julia Zamora project. In particular, experts from the in the Development Division. The Agriculture and Commodities Division, Administration and General Services Council and TNC Division, Intellectual Division provided project oversight. Property, Government Procurement Graphic design and production of the and Competition Division, Legal Affairs research reports was undertaken by Division, Market Access Division, Trade the Languages, Documentation and in Services and Investment Division and Information Management Division. Trade and Environment Division. Disclaimer The report and any opinions reflected therein are the sole responsibility of the WTO Secretariat. They do not purport to reflect the opinions of Members of the WTO. The document is without prejudice to the positions of Members or to their rights and obligations under the WTO Agreements. Natural Disasters and Trade Study I CONTENTS PAGE Table of Contents Acknowledgements ................................................................................................................... 1 Disclaimer ................................................................................................................................... 1 Executive Summary .................................................................................................................. 8 Introduction ................................................................................................................................16 Section 1: Natural disasters and trade – An Overview .................................................... 18 Overview .......................................................................................................................................... 19 Geophysical and hydro-meteorological disasters – frequency and distribution ............................................... 22 Factors influencing natural disaster risk ................................................................................................ 28 Economic and trade effects of natural disasters ...................................................................................... 35 Overview .......................................................................................................................................... 35 Impacts on economic output ................................................................................................................38 Impacts on trade performance .............................................................................................................39 Supply chain effects ...........................................................................................................................45 Measures reported in Members’ Trade Policy Reviews .............................................................................. 48 Disaster response measures reported in TPR reports ...............................................................................49 Disaster recovery measures reported in TPRs .........................................................................................50 Resilience Measures reported in TPRs ................................................................................................... 51 Section 2: Country Research On Natural Disasters and Trade – Summary of Findings ...................................................................................................................................... 54 Summary of findings ..........................................................................................................................55 Introduction ......................................................................................................................................55 Natural Hazards, Macroeconomic and Trade Impacts ...............................................................................55 Trade Issues in Disaster Response ........................................................................................................ 57 Trade Issues in Disaster Recovery .........................................................................................................58 Trade Issues in Disaster Resilience .......................................................................................................62 Nepal ...........................................................................................................................................66 Executive Summary ............................................................................................................................67 Introduction ......................................................................................................................................67 Exposure to Geophysical and Meteorological Hazards ............................................................................... 69 Impact of the 2015 Earthquakes ............................................................................................................ 70 Issues Arising in Response ..................................................................................................................72 Issues Arising in Recovery ................................................................................................................... 75 Issues Arising in Resilience ................................................................................................................. 85 Dominica and Saint Lucia .......................................................................................................88 Executive Summary ............................................................................................................................89 Hazards and Macroeconomic Impacts ....................................................................................................89 Trade Issues in Disaster Response ........................................................................................................ 89 Trade Issues in Disaster Recovery .........................................................................................................89 Trade Issues in Disaster Resilience .......................................................................................................90 Introduction .....................................................................................................................................90 Dominica .....................................................................................................................................92 Exposure to Natural Hazards and Experience of Natural Disasters ..............................................................92 Trade Impacts and Issues ....................................................................................................................95 2 Natural Disasters and Trade Research – Study I CONTENTS PAGE Meeting with Rt Hon Minister Douglas, Minister of Trade, Dominica ............................................................ 95 Overview of the Macroeconomic and Trade Effects of Crises ....................................................................96 Meetings with Public and Private Sector Stakeholders ............................................................................ 101 Trade Issues in Disaster Response ..................................................................................................... 101 Trade Issues in Disaster Recovery ..................................................................................................... 105 Trade Issues in Disaster Resilience ...................................................................................................