Lamy: “Trade generates opportunities for development”

Director-General Pascal Lamy, at the opening of the academic year of the Geneva Graduate Institute with Nobel Laureate Amartya Sen on 3 October 2012, said: "In his work Development as Freedom, Prof. Sen defines development as a process that expands human freedom and removes those 'unfreedoms' that leave people with little choice and few opportunities. International trade is recognized as a tool for generating opportunities for development.  In this same spirit, the WTO does not advocate open trade for its own sake, but as a means for 'raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand'."

http://www.wto.org/english/news_e/sppl_e/sppl251_e.htm

IMF Managing Director Christine Lagarde Calls for Action Now to Secure Global Recovery

Christine Lagarde, Managing Director of the International Monetary Fund, today urged policymakers to use the window of opportunity offered by recent policy decisions - and to take the actions needed to achieve a decisive turn in the global crisis.

http://www.imf.org/external/np/sec/pr/2012/pr12358.htm

Growth to Slow in East Asia and Pacific in 2012, But Domestic Demand Will Play Key Role in Rebound Next Year

China's growth to slow to 7.7% in 2012 but recover to 8.1% next year

Singapore, October 8, 2012 - Economic growth in the East Asia and Pacific region may slow down by a full percentage point from 8.2 percent in 2011 to 7.2 percent this year , before recovering to 7.6 percent in 2013. Growth in developed countries will remain modest, with recovery in the region to be driven mainly by strong domestic demand in developing countries, said the World Bank in its East Asia and Pacific Economic Data Monitos, released today.

http://www.worldbank.org/en/news/2012/10/08/growth-to-slow-in-east-asia-and-pacific-in-2012-but-domestic-demand-will-play-key-role-in-rebound-next-year

Marijuana Only for the Sick? A Farce, Some Angelenos Say

LOS ANGELES- One year after federal law enforcement officials began cracking down on California's medical marijuana  industry with a series of high-profile arrests around the state, they finally moved into Los Angeles last month, giving 71 dispensaries until Tuesday to shut down. At the same time, because of a well-organized push by a new coalition of medical marijuana supporters, the City Council last week repealed a ban on the dispensaries that it had passed only a couple of months earlier.

http://www.nytimes.com/2012/10/08/us/california-fight-to-ensure-marijuana-goes-only-to-sick.html?hp&_r=

Rise in trade restrictions now ‘alarming’, Lamy tells WTO ambassadors

For the first time since the WTO started monitoring the protectionist reaction to the financial crisis in 2008, the scale of trade restrictions is a cause for “serious concern”, Director-General Pascal Lamy told an informal meeting of heads of delegations to the WTO on 7 June 2012. He also reported on latest developments in the Doha Round negotiations. This is what he said:

Thank you Madam Chair.

Since the May meeting of the General Council I have been consulting with Members on various occasions, including around the OECD Ministerial, during recent visits to Thailand and China, where I attended the LDC [Least-developed countries] accessions round table and the Global Services Forum, and this week in Kazan, Russia, where I held a number of bilateral consultations on the margins of the APEC [Asia-Pacific Economic Co-operation] Trade Ministers’ meetings.

The central message I have heard is that, given the deterioration of the global economic and trade outlook, 2012 cannot be a wasted year and that it is important that progress is made across the entire spectrum of our activities.

Let me start with the recent publication of our monitoring report on trade and investment measures taken in the crisis, which we do ahead of the G-20 meeting [in Mexico, 18–19 June 2012]. A report concerning measures by the entire membership will be sent shortly to all of you too.

For the first time since the beginning of the crisis in 2008, this report is alarming. The implementation of new measures restricting or potentially restricting trade has remained unabated over the past seven months, which is aggravated by the slow pace of rollback of existing measures.

The accumulation of these trade restrictions is now a matter of serious concern. Trade coverage of the restrictive measures put in place since October 2008, excluding those that were terminated, is estimated to be almost 3% of world merchandise trade, and almost 4% of G-20 trade. The discrepancy between the commitments taken and the actions on the ground add to credibility concerns.

This situation is adding to the downside risks to the global economy and what is now a volatile global context.

In such a situation, it is important that we collectively and urgently redouble our efforts to strengthen multilateral co-operation to find global solutions to the current economic difficulties and risks and avoid situations that would cause further trade and investment tensions. This will be part of the message that I will sharing with Leaders at the upcoming G-20 Summit on 18 June.

I hope that all Members can all live up to the commitment made by Ministersat MC8 [The eighth WTO Ministerial Conference in Geneva, December 2011] and elsewhere to keep markets open and resist protectionism in all forms. We also need to remain vigilant and begin to think about creative ways to improve our multilateral transparency and peers review. I would therefore urge that all Members engage in the consultations that the Chair of the TPRB [Trade Policy Review Body] will be undertaking to improve the WTO peers review of the monitoring reports produced by the Secretariat.

Another message which I will be conveying at the upcoming G-20 Summit is the importance of ensuring availability and affordability of trade finance. The Expert Group on Trade Finance as well as the Aid for Trade and Trade finance workshop which took place on 15 May stressed the importance of keeping multilateral development institutions engaged in trade finance, bearing in mind the development dimension of their programs. The permanent existence of a market gap for poor countries requires long-term public involvement, without which crisis intervention would be meaningless. With respect to regulatory matters, there was consensus that the dialogue with the Basel Committee should be usefully pursued on elements of Basel III regulation. Finally, it would be useful to encourage data collection on trade finance by both public and private sector.

The LDC accession roundtable which took place in Beijing last week, which was superbly organized, stressed the importance of completing LDC accession guidelines by July. I do believe such a move would bring greater confidence and trust in the ability of Members to address the specific needs of LDCs. It also saw the conclusion of the last outstanding bilateral deal for the accession of Laos to the WTO. Efforts need to redouble now to conclude remaining outstanding steps towards the accession of Yemen to the Organization.

On the DDA [Doha Development Agenda negotiations] front, and following up on the conclusions at MC8, all Chairs have been consulting with members in their respective areas. Let me focus on the areas where technical work has been on-going since our last meeting.

On trade facilitation, negotiations are continuing constructively at the technical level in line with the work programme agreed in the Negotiating Group in January. This week we have the latest cluster of facilitator-led negotiations, and a number of capital-based officials are in town to consult informally on areas of the text where they feel progress can be made and can then be fed back through the facilitator process into the Negotiating Group. Another cluster of facilitator-led negotiations will take place at the end of this month, to prepare for the next Negotiating Group session in July and the 13th revision to the draft agreement.

At the same time, suggestions have been made on the possibility of launching another needs assessment programme for developing countries and LDCs. This will of course need to be discussed in the Negotiating Group before any decision is taken, but it could help bring the element of resources needed for implementation into the equation in a concrete way and provide the basis for the essential matching up of S&D provisions [special and differential provisions for developing countries] with trade facilitation commitments in the new agreement.

In summary, progress is being made, it may not be as fast as some would like but given the technical nature of the work, and the importance all Members attach to the bottom-up, inclusive method of negotiations, there are no short cuts to be had.

On special and differential treatment, the CTDSS [Committee on Trade and Development special session] Chair has intensified the work and intends to hold weekly informal consultations for the next six weeks until the summer break, focussing on the three areas mandated from MC8 — the monitoring mechanism; the 28 Cancun Agreement-specific proposals; and the 6 Agreement-specific proposals. These informal consultations will be complimented by open-ended transparency meetings to take stock of work, including one such meeting to be held in July.

On the review of the Dispute Settlement Understanding, work has continued to progress — a sign that the Members value and understand the importance of dispute settlement to the System. The negotiating group has held four negotiating weeks since the beginning of the year, including this week. As a result, the group is close to completing the current phase of work, with a further set of meetings scheduled for mid-July. As part of the on-going work, a group of developing countries has recently presented a conceptual paper on issues of interest to them, which is a welcome development.

On the other DDA related issues, the level of activity has been lower, to say the least. While I believe that focusing on a number of development related areas is in line with the outcome at MC8, I believe it is time for the Members to also devote some attention to the other issues. And I do hope that today’s session will bring some clarity on how to do that. Since MC8 I have heard a lot of “talk” about new ideas and approaches. Maybe it is time we see a bit of “walk”.

Let me also briefly foreshadow the message that I intend to send at the upcoming Rio +20 meeting. I will stress, like I have in the context of food security that open trade is part of the solution to our collective sustainability challenges, not part of the problem. I will of course be reporting back to Members on these discussions at the General Council in July.

Let me before I close, draw to your attention two budgetary issues.

The first concerns delays in receiving Members contributions to the Global Trust Fund. Although the overall level of pledges made so far is satisfactory, the WTO’s ability to adequately plan and deliver on the technical assistance programme adopted by Members is negatively impacted by the delays in the receipt of the actual contributions. As you all know we cannot plan on the basis of funds we have not yet received. I would therefore like to urge Members to make every possible effort to ensure that their contributions are received by the Secretariat as soon as possible.

Finally, in the interest of transparency I would like to inform you that the Secretariat has begun carrying out a horizontal review of possible improvements in the area of translation, printing and distribution of documentation as well as in the organization of meetings and interpretation, in order to achieve the budgetary savings agreed with Members at the end of last year and that I will be reporting to the July Council on the state of implementation of the Decision.

This concludes my report to you.

Thank you Madam Chair.

Drought Worsens in the Sahel Region of Africa – Millions of People at Risk

WASHINGTON, May 31, 2012—More than 17 million people are facing possible starvation in West Africa’s Sahel region, the zone skirting the southern portion of the Sahara Desert. The crisis is due to a combination of drought caused by poor rainfall in 2011, too little food, high grain prices, environmental damage and large numbers of internal refugees.

“Between 1998 and 2010, our harvests were flourishing and the livestock giving plenty of milk,” said Fatimata Diallo, head of a local farmer’s cooperative in the Mauritanian village of Toulel Dierri. “But since 2011, we are living very precariously.”

Mauritania, Niger, Mali, Chad and Burkina Faso are facing the worst of the crisis. The countries are experiencing stressed levels of food insecurity and many of their local coping mechanisms have been exhausted. The USAID Famine Early Warning System Network warns that between July and September 2012, the food security crisis will peak.

Emergency plans have already been put into place by the governments of Mauritania, Mali and Niger and the United Nations has launched its Consolidated Appeals Process, a tool developed by aid organizations to raise funds for humanitarian action. Other international efforts include more than €120 million allocated to emergency assistance from the European Union, global appeal campaigns from various Non-Governmental Organizations and the recent formation of the Global Alliance for Action for Drought Resilience led by the Intergovernmental Authority on Development (IGAD).

The World Bank Group is also adapting its projects to make the best use of existing assistance in the Sahel. Poor households in the worst-affected countries have immediate food needs and require additional humanitarian assistance.

“Droughts tend to have the worst affect on the poorest people in any given region; those with the least ability to adapt to changing climatic conditions,” said Jamal Saghir, director of the World Bank’s Africa Region Sustainable Development Department. “The drought in the Sahel is having an enormous impact on the poor and those displaced by conflict.”

Recent conflicts in Mali and Niger have forced over 300,000 people from their homes with many escaping to refugee camps in neighboring countries. The displacement has worsened an already difficult situation and has put many thousands more people at risk of malnutrition. Traditional animal grazing routes have been cut off and many local markets closed due to the conflict, which could have longer reaching consequences for regional food security.

In addition, the latest edition of the World Bank’s Food Price Watch warns that delayed harvests in the Sahel due to climatic conditions are contributing to flat or increasing food prices. Even if families were able to afford to purchase their own food rather than grow it, limited access to markets would impact accessibility, according to the report.

“With the rise in basic food prices, the precarious situation is gaining ground,” said another member of the Toulel Dierri food cooperative. “This year, we have even sent our girls into town to search for domestic work so they can at least have two meals a day.”

In just a short amount of time, according to the cooperative members, the community has gone from larger-scale agriculture to household subsistence agriculture.

What the World Bank is Doing

The World Bank is preparing to address short-term food security needs and long-term drought resilience in the Sahel region by conducting an extensive review of its existing programs in order to determine which resources from existing projects can be allocated to the crisis situation. This will help ensure that any needed resources can be allocated quickly and existing projects, especially those dealing with social safety nets, can be better tailored for longer-term drought resilience.

“Building resilience to drought is a key objective of our work,” said Doekle Wielinga, Head of the Africa Region Disaster Risk Management Team. “We are doing this by strengthening social safety nets which help households to bolster resources and build capacity to deal with climatic shocks. We are also financing agricultural development projects for improved and sustainable land management.”

Specifically, in Niger, the Bank is launching a community action project for climate resilience plus a large-scale social safety net project aimed at increasing access by poor and food insecure people to cash transfer and cash-for-work programs.

In Mauritania, a development program for irrigated agriculture is underway to increase food security by boosting sustainable irrigation and diversifying crops and agriculture for local farmers.

World Bank Database Shows Export Markets Are Dominated by Big Firms

Difficult for Newcomers to Survive

WASHINGTON, May 24, 2012 – A few large companies dominate export markets in developing and developed countries, with the top one percent often accounting for more than half – sometimes nearly 80 percent – of total exports, according to a new World Bank database with a wealth of details on exporting firms.

The new Exporter Dynamics Database offers the most comprehensive picture yet of exporter characteristics and dynamics – a firm’s entry, exit and survival in the export market – in 45 developed and developing countries. The database mainly covers 2003-2009, though data from the 1990s are also available for some countries.

A key finding is that the export market is difficult to tackle for newcomers, with 57 percent of companies on average – and two-thirds in Africa – quitting within a year of entering the export market.

“Governments traditionally have focused on helping exporters expand to new products and new markets, but they may need to do more to help firms survive,” says Ana Margarida Fernandes, the task leader of the database, which was developed by the Trade and International Integration team of the World Bank’s Development Research Group.

The global database allows for cross-country comparisons of exporters based on factors such as size, survival, growth, and concentration. More countries will be added as the database expands. Until now, most databases focus not on exporting firms, but on the aggregate flow of goods across borders based on countries or products.

Based on data sets covering the universe of export transactions obtained directly from customs agencies, the data are comparable across countries. Measures cover the size distribution of exporting firms, their diversification in terms of products and markets, the dynamics of exporting firms’ entry, exit and survival, and the average unit prices of the goods traded.

The Exporter Dynamics Database could help policy makers identify opportunities in particular sectors and address challenges faced by their exporters, especially in their entry and survival in export markets. For example, it can be used to analyze the performance of export sectors in a country, comparing them with their counterparts in the region or richer countries. The database can also make it easier to analyze the impact of tariffs and other trade barriers. For example, it can be used to assess the impact of stringent non-tariff measures on the numbers and average size of exporters.

The database reveals several interesting trends. For example, the rate of firms entering the export market is high, with more than half of the exporters in Laos, Malawi, Tanzania, and Yemen being newcomers in any given year. But their survival rate isn’t that good, generally with more than a third of companies on average leaving the export market every year.

“Our database shows how large the degree of churning in export markets is, particularly in less developed and smaller economies,” says Martha Denisse Pierola, an economist at the Development Research Group who started the project with Caroline Freund, now the chief economist at the Middle East and North Africa Region of the World Bank. “We need further research to better assist governments in minimizing the costs associated with these high exit rates.”