REGIONAL WORKSHOP ON LEAST DEVELOPED COUNTRIES AND LEVERAGING TRADE AS A MEANS OF IMPLEMENTATION FOR THE 2030 AGENDA Session 5: In search of the meaningful market access what are the policy options for LDCs 2-4 August 2017 Thimphu, Bhutan Rajan Sudesh Ratna Economic Affairs Officer Trade, Investment and Innovation Division UN ESCAP, Bangkok Email: ratna@un.org
Presentation Structure Discussion 2030 ASD Market access issues Policy options Rajan Ratna 2
Market Access: Discussions What comes to your mind when you think of market access? What are related issues for getting effective market access? Rajan Ratna 3
2030 ASD and LDC s Trade 17.10 Promote a universal, rules-based, open, nondiscriminatory and equitable multilateral trading system under the World Trade Organization, including through the conclusion of negotiations under its Doha Development Agenda. 17.11 Significantly increase the exports of developing countries, in particular with a view to doubling the least developed countries (LDCs) share of global exports by 2020. 17.12 Realize timely implementation of duty-free and quotafree market access on a lasting basis for all least developed countries, consistent with World Trade Organization decisions, including by ensuring that preferential rules of origin applicable to imports from least developed countries are transparent and simple, and contribute to facilitating market access Rajan Ratna 4
Is market access only linked to? Goods (tariff and non tariff in market only?) Services (regulations in markets only?) Only exports or imports too? OR also linked to the exporting country s policies? Supply chains? IPRs? NTMs? Investments? Reducing trade costs? Infrastructure? Rajan Ratna 5
Export composition? How important is the composition of items being exported? Raw material, intermediate products, consumer goods? Value chain? Product diversification? Market diversification? Rajan Ratna 6
Afghanistan s exports Consumer goods 14% 2000 Capital goods 2% Consumer goods 4% 2016 Capital goods 1% Intermediate goods 4% Raw materials 80% Intermediat e goods 32% Raw materials 63% Rajan Ratna 7
Bhutan 2000 2016 6% 1% 6% 8% 15% 1% Raw materials Raw materials Intermediate goods Intermediate goods 71% Consumer goods Capital goods 92% Consumer goods Capital goods Rajan Ratna 8
Cambodia 2000 2016 1% 5% 5% 2% 8% 6% Raw materials Raw materials Intermediate goods Intermediate goods 89% Consumer goods Capital goods 84% Consumer goods Capital goods Rajan Ratna 9
Lao PDR 2000 2016 40% 18% 29% 13% Raw materials Intermediate goods Consumer goods Capital goods 21% 1% 28% 50% Raw materials Intermediate goods Consumer goods Capital goods Rajan Ratna 10
Myanmar Rajan Ratna 11
Nepal Rajan Ratna 12
Tariff Profile LDC Countries WTO Status Tariff Total Agriculture Non-Agriculture Bound MFN Applied Bound MFN Applied Afghanistan Member 13.6 33.7 10.3 Bound MFN Applied Bhutan Observer Cambodia Member 19.1 11.2 (2014) 28.2 14.9 (2014) 17.8 10.6 (2014) Lao PDR Member 18.7 10.0 (2015) 19.2 20.1 (2015) 18.7 8.3 (2015) Myanmar Member 84.1 5.6 (2015) 106.2 8.6 (2015) 21.2 5.1 (2015) Nepal Member 26 12.3 (2015) 41.5 14.3 (2015) 23.6 12.0 (2015) Timor-Leste Observer 2.5 (2015) 2.5 (2015) 2.5 (2015) Source: WTO Tariff Profile Rajan Ratna 13
Number of markets Export diversification (number of markets) 2010-2014 140 120 100 2010 2014 80 60 40 20 0 Source: ESCAP's calculation based on data from Trade Outcomes Indicators available from WITS (number of products and markets indicator) Rajan Ratna 14
Number of products Export diversification (number of products) 2010-2014 700 600 2010 2014 500 400 300 200 100 0 Source: ESCAP's calculation based on data from Trade Outcomes Indicators available from WITS (number of products and markets indicator) Rajan Ratna 15
Services Contribution to economy Which sectors and modes are important? Promoting tourism Mutual recognition agreements Rajan Ratna 16
Services, Investments and ToT Market access Mode 1 Mode 2 (is it export market or domestic market?) Mode 3 Mode 4 MRAs Liberalizing sectors for investments attract FDIs Technical assistance and capacity building. Rajan Ratna 17
WTO LDCs Services Waiver 17 December 2011, Geneva: 8 th WTO Ministerial Conference declaration on Preferential treatment to services and services suppliers of least-developed countries. Article II:1 of the GATS may be waived to help LDCs increase their services exports. Members who want to grant preferential access to LDCs will notify WTO Services Council. LDCs will submit a collective request specifying sectors and modes to be affected by the waiver. Rajan Ratna 18
The LDCs collective request to the WTO 21 July 2014: LDC Group submits a request to obtain preferential treatment of their services exports. Request: waive Article XVI, Market Access and Article XVII, National Treatment Restrictions on LDC Services Suppliers. Sectors included: travel and tourism; banking and insurance; transport and logistics; education and training; IT and business outsourcing; artistic production. Other restrictions to be waived: visa and work permit; recognition of LDCs educational certificates Rajan Ratna 19
24 notifications: a growing list* Australia Brazil Canada Chile China European Union Hong Kong, China Iceland India Japan Liechtenstein Republic of Korea Mexico New Zealand Norway Panama Singapore South Africa Switzerland Taiwan Province of China Thailand Turkey United States Uruguay * - as on 20 July 2017 Rajan Ratna 20
Trade in services waiver: sectors addressed Transport Services: Australia; Brazil; Canada; Chile; China; EU; Hong Kong, China; Iceland; India; Japan; Republic of Korea; Mexico; New Zealand; Norway; Panama; South Africa; Switzerland; Taiwan, POC; US Travel Services: Australia; Brazil; Canada; Chile; China; EU; Hong Kong, China; Iceland; India; Japan; Republic of Korea; Liechtenstein; Mexico; Panama; South Africa Other Commercial services: Australia; Brazil; Canada; Chile; China; EU; Hong Kong, China; Iceland; India; Japan; Republic of Korea; Liechtenstein; Mexico; New Zealand; Norway; Panama; Singapore; South Africa; Switzerland; Taiwan, POC; Turkey; US; Uruguay Source: Derived by ESCAP from WTO Council for Trade in Services, S/C/N Notifications (accessed on 17.07.2017) Rajan Ratna 21
Entry modes addressed for the sectors offered LIBERALISATION MODE 1 MODE 2 MODE 3 MODE 4 Fully liberalised Australia; Canada; Chile; HK, China; Iceland; Japan; Republic of Korea; Liechtenstein; Mexico; New Zealand; Norway; South Africa; Switzerland; Panama; Taiwan, POC; Turkey; USA Australia; Chile; HK, China; Iceland; India; Japan; Republic of Korea; Liechtenstein; Mexico; New Zealand; Norway; Singapore; South Africa; Switzerland; Panama; Taiwan, POC; Thailand; Turkey; USA; Uruguay Canada; Chile; Iceland; Mexico; New Zealand; Norway; Singapore; South Africa; Switzerland; Panama; Taiwan, POC; Turkey; Uruguay Partially liberalised EU; India; Uruguay EU Australia; China; Brazil; HK, China; India; Japan; Republic of Korea; Liechtenstein; USA Canada; Chile; Iceland; India; Republic of Korea; Mexico; New Zealand; Norway; Turkey; USA Source: Derived by ESCAP from WTO Council for Trade in Services, S/C/N Notifications (accessed on 17.07.2017) Rajan Ratna 22
United Staes Dollar (Billion) Services imports and exports of APLDCs 25 20 15 10 BoT Exports Imports 5 0-5 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: ESCAP s calculations based on data from WTO statistical database (accessed on 14.07.2017) Rajan Ratna 23
Patterns of LDCs services exports: services exports by component 2. Travel 53% 3. Other commercial services 23% 1.Transport 23% 4. Goods-related services 1% Source: ESCAP s calculations based on data from WTO statistical database (accessed on 12.07.2017) Rajan Ratna 24
3.6 Other business services 37% Other commercial services exports by subcomponent 3.7 Personal. cultural. and recreational services 3% 3.1 Telecommunicatio ns. computer. and information services 39% 3.5 Charges for the use of intellectual property n.i.e. 3.4 Financial 3.3 Insurance and 1% services 6% pension services 4% 3.2 Construction 10% Source: ESCAP s calculations based on data from WTO statistical database (accessed on 12.07.2017) Rajan Ratna 25
Patterns of Asia-Pacific LDCs commercial services exports Source: ESCAP s calculations based on data from WTO statistical database (accessed on 12.07.2017) Rajan Ratna 26
IPRs LDC Countries Patent Applications Residents Trademark Applications Non- Residents Residents Non- Residents Residents Industrial Design Applications Non- Residents Afghanistan Bhutan (2013) 3 4 578 2 Cambodia (2014) Lao PDR 2 65 1,182 3,706 37 45 Myanmar (2012) 4,422 4,068 Nepal (2013) 18 12 2,541 1,409 21 35 Source: WTO Trade Profile Rajan Ratna 27
Branding: Made in Organic IPR Geographical indications Trademark Patents Rajan Ratna 28
Non-tariff measures and trade costs SPS and TBT issues are very important, especially participation in SPS and TBT Committee and raising STC. Rajan Ratna 29
Average ad valorem trade cost of APLDCs with world Country 2010 2014 (or earlier when not available) Afghanistan 289 197 Bangladesh 285 270 Bhutan 419 396 Cambodia 298 316 Kiribati 281 372 Lao PDR 387 366 Myanmar 569 N/A Nepal 414 404 Timor Leste 341 313 Vanuatu 314 353 Source: derived from ESCAP-World Bank Trade Cost Database available from ARTNeT (only data from 10 APLDCs is included as data for Solomon Islands, Tuvalu is not available) Rajan Ratna 30
Average ad-valorem trade costs for APLDCs with major partners 380% 360% 340% 320% 300% 280% 260% EU27 India China Korea, R. of Japan USA APLDCs 240% 220% 2007 2008 2009 2010 2011 2012 2013 2014 Source: derived from ESCAP-World Bank Trade Cost Database available from ARTNeT (only data from 8 APLDCs is included as data for Afghanistan, Myanmar, Tuvalu, and Vanuatu is not available) Rajan Ratna 31
APLDCs ad-valorem costs of trade with EU 27 and United States 700.00% 600.00% 500.00% 400.00% 300.00% EU 2007 EU 2014 US 2007 US 2013 200.00% 100.00% 0.00% Bangladesh Bhutan Cambodia Timor Leste Kiribati Lao PDR Nepal Source: derived from ESCAP-World Bank Trade Cost Database available from ARTNeT (data is from the most recent year available when 2013-2014 data is missing) Rajan Ratna 32
Number of documents required for trade, 2014 12 10 8 6 4 Documents to import Documents to export 2 0 Source: World Development Indicators (last updated 06.30.2017), data for Myanmar and Tuvalu is not available Rajan Ratna 33
Different options and approaches WTO: Doha Round LDCs DFQF PRoO Services waiver RTAs Where you are parties Where you are not (preference erosion) Autonomous: GVCs, RVCs Technical assistance & MRAs etc. Rajan Ratna 34
Policies required Goods: More than tariffs NTMs and trade costs are issues. Measures for market/product diversification: investments & technology. Niche products organic, herbal etc. value added Liberalise tariffs and other barriers autonomously Act as per SPS and TBT agreements STC in WTO or join disputes as third parties Harmonisation and MRAs (case of ASEAN) Technical assistance demand Rajan Ratna 35
Policies required (2) Services: Domestic regulations and regulators Liberalise sectors which promote inflow of tourism (mode 2 and 3 both) Measures for inflow of investments Seek MRAs Connectivity open air policy? Other measures: Reduce documentations and cost of trade Paperless trade IPR: GIs Market development: Branding, image building Trade fairs Incentives Rajan Ratna 36
Thank you Rajan Ratna 37