Building capacity to help Africa trade better

Trade policy can ensure inclusive prosperity in wake of COVID-19


Trade policy can ensure inclusive prosperity in wake of COVID-19

Trade policy can ensure inclusive prosperity in wake of COVID-19
Photo credit: UNCTAD | Adam Kane

Trade-restrictive measures imposed by G20 governments have reached historically high levels, a trend that has only increased with the pandemic.

Worldwide, supply chains are also constricting, and some countries are promoting reshoring of production due to both technological change and more inward-looking trade and economic policies.

As experts and world leaders assess the intricate supply chain vulnerabilities of our essential goods following COVID-19-related trade restrictions, opportunities arise to realign the structure and substance of trade rules to respond to rising inequalities, climate change and frustrations with trade’s role in development. 

That is ironically the call made by the UN’s 2030 Agenda for Sustainable Development to achieve its Sustainable Development Goals (SDGs), as recently reiterated at the World Trade Organization (WTO). 

These developments occur at the same time that WTO reforms are on the table as its negotiation and adjudication functions have been weakened by the ongoing U.S.-China trade wars.

This provides a rare opportunity to rethink the way our international trade treaties are negotiated, designed and implemented, as well as strengthen the links between trade and development.

We propose a new approach in three areas so trade can be a true engine for sustainable  development and is (1) better aligned with the economic and social development priorities and environmental commitments in the SDGs, the Paris Agreement, and the Sendai Framework for Disaster Risk Reduction; (2) developed and implemented through more transparent and participatory processes; and (3) differentiated and tailored to countries’ specific needs. This would require further research and investment in new and improved tools.

An SDG-aligned new trade regime

The 17 SDGs offer a framework, through their 169 targets and 232 indicators, to bridge concerns on all sides of the trade debate and help replace the zero-sum narrative that was already emerging before the pandemic.  

It also provides clear targets to guide the reforms to address the disruptions in supply chains, due to the response to the pandemic and the digitalization of the economy.

Substantively, the new model we propose would mean reassessing trade rules in terms of their ability to advance economic, social and environmental dimensions of the SDGs and other international efforts, macroeconomic policies, business and human rights principles, and a balanced approach to the rule of law.

This would build on existing models such as the African Continental Free Trade Area (AfCFTA) that highlights a new approach to trade and development and aligns with the SDGs.

It would include a stronger focus on trade and global health in line with SDG 3 (on good health and wellbeing) and development of a comprehensive food security and trade approach to deliver on SDG 2 (on ensuring zero hunger).

Strengthened labour provisions will also be needed to advance SDG 8 (on decent work and economic growth). Further, it would entail meaningful initiatives on reduced inequalities (SDG 10), gender equality (SDG 5), and micro, small and medium-sized enterprises (MSMEs).

In addition, it would call for a serious approach to trade and climate change, sustainability and the circular economy in support of SDGs 12 to 15.

Time for inclusive rulemaking

The trade rulemaking process needs to become more inclusive, flexible and adaptive. 

The process of negotiating and implementing trade rules must reflect the voices of all, including marginalized communities, MSMEs and the economically vulnerable.

A more inclusive approach would build a stronger link between trade rules and the people they are meant to serve, ensuring more buy-in and effectiveness from leaving no one behind.

A people-centred trade regime would also improve understanding and enforcement of increasingly complex rules and build political support for international policies that intersect with national priorities and commitments. 

It would not only help address current trade challenges and improve the implementation of the rules but also help countries at different levels of development recover better together.

Trade that works for all

Given that different countries will continue to face different challenges following the pandemic, trade policy should be differentiated and tailored to address specific needs.

To accomplish this, governments could use Aid for Trade, trade facilitation, investment strategy, regulatory review and monitoring, investment incentives, and a new generation of investment agreements.

To ensure that trade helps us “recover better”, we need to put people and the planet at the heart of the multilateral trade regime. The future of multilateralism and trade – and its ability to spur green, resilient, inclusive and circular economies and social development worldwide – will depend upon it.

Chantal Line Carpentier is Chief of UNCTAD’s New York Office and Katrin Kuhlmann is Visiting Professor at Georgetown Law School and President and Founder of New Markets Lab (NML). The views expressed in this article do not necessarily reflect those of UNCTAD.

The full article can be downloaded here.


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