Fostering more inclusive trade
by Jodie Keane
The global trade slowdown, coupled with a reduction in the dollar value of international trade flows, has affected the performance of all countries. The Commonwealth’s share of global exports of goods and services declined marginally between 2013-15, to 14.8% from 15%.
This is consistent with a longer-term trend, which has seen the Commonwealth’s share of world exports decline slightly since 2005. Intra-Commonwealth trade assumes greater importance in this context, and this share has risen among members to almost 20% in recent years. This accounts for large shares of merchandise trade for the developing Commonwealth, including small states in southern Africa, the Pacific and Caribbean.
Trade-induced economic development is not necessarily inclusive, to the detriment of marginalised parts of society, including women and the youth, and must be managed carefully. Although some countries benefit from increases in growth in neighbouring countries, countries further away benefit less. This is simply because the increase in demand is lower, as trade costs are higher. Hence, some regions may begin to converge, whilst regions located further away will begin to diverge.
On small island states, output and population are clustered around airports. This shows the importance of market access to an area’s development. For instance, in Grenada, Samoa and Fiji, remote provinces are growing rapidly, but this largely reflects a catch-up process. Both output and population density are far higher in capital provinces and those with an airport. Given the remoteness of many small island states, an emphasis on trade costs alone is likely to be inadequate to induce global value chain participation.
This raises the question as to which trade costs – of international, regional or domestic market access – matter most in view of inclusive, sustainable development objectives. Knowledge and information gaps need to be addressed at national and regional levels. Doing so may bolster governance capabilities and the ability to meet development objectives.
Commonwealth Secretariat photo by Tom Perry
Trade policy and trade agreements affect women and men differently and can have significant implications for household wellbeing and for gender equality. These gender effects are influenced by social norms and values, as well as factors including access to resources, endowments, skill levels, rights and entitlements (sometimes enshrined in law) and regulatory processes. Strengthening these groups’ influence on trade policy can help to avoid circumstances whereby some in society tend to lose more than they gain. This is the biggest problem that confronts multilateral institutions, in view of the current backlash against globalisation.
The Commonwealth Secretariat found a male to female ratio of just under 2:1 among trade negotiators at Geneva-based negotiators and approximately 3:1 among heads of delegation at the World Trade Organisation. When the last Commonwealth trade review was published, only one of the 15 councils and bodies reporting to the WTO’s general council was chaired by a female ambassador. The challenge of increasing female representation begins at the top.
Jodie Keane is Economic Adviser in the Commonwealth Secretariat. The views expressed are those of the author and not the Secretariat. Back