Trade and development often tagged together as integral to each other's sustenance received a renewed emphasis in Mr. Pascal Lamy's words this week while he spoke at the discussion meetings organised by the local chamber bodies and Bangladesh Economic Association (BEA) in Dhaka.
As a strong advocate of the growth model emerging from the intertwining chemistry of the two, the WTO boss, while praising Bangladesh for its endeavours and successes, was candid in emphasising that trade offers opportunities for binding national constraints to growth and development in the least developed countries (LDCs) like that of Bangladesh.
He was equally straight while ruling out the need for protecting the LDCs from competitive global trade which, he believed, would rob them of their comparative advantage and entrepreneurial capabilities. Citing the example of the readymade garments (RMG) sector in Bangladesh, especially its monumental success, he expressed optimism that being part of the global value chain is crucial to the growth of any economy.
Curiously, as he stressed on the mutually reinforcing features of trade and development, Mr Lamy was not oblivious of his official capacity as the main catalyst of the global trading system. He did not just dish out prescriptions for trade-strengthening measures through adequate domestic policies in infrastructure, services, investment and so on.
Equally importantly, he spoke of the need for improving the global level playing field, that is, establishing proper multilateral disciplines which his organisation is mandated to ensure. Mr Lamy must be thanked for reminding all concerned of the role that he and his organisation are to play in helping out the LDCs.
The basic idea underlying the two-pronged approach is in the first place to recognise the inherent weaknesses and vulnerability of the group of nations called the LDCs and in the second, to provide them with tools to prepare themselves to negotiate the rough waters.
Trade is unmistakably a key instrument for development. International trade, valued at roughly $6.0 trillion a year, could be a huge force for sustainable growth. By opening up new markets, exposing domestic firms to international practices and bringing new investment and growth, trade can create necessary conditions for poverty alleviation on a scale unreachable by dwindling official development assistance (ODA).
But the task is daunting in that it is increasingly reliant on the right mix of the two-way approach referred to by the WTO Chief. While it is true that most LDCs including Bangladesh lag far behind in formulating and implementing policies required to face the challenge, it is also true that a good deal depends on forces beyond, where domestic policies, however proactive and dynamic, can be of little or no advantage to act as a facilitator for trade development.
It is here that countries like Bangladesh look forward to see that the WTO take care of the trade-impeding factors in the global scenario where the voices of the LDCs are repeatedly muted by organised moves of the strong and the powerful. The foremost difficulty that the LDCs do still face, is market access.
This in turn involves direct and indirect barriers to trade such as tariff quotas and conformity requirements, producer support by way of subsidies. Coupled with these is the lack of capacity in the LDCs in a host of areas. Although these issues have since long been well recognised as crucial trade-hindering factors, these are yet to be addressed adequately and meaningfully.
The WTO Chief has thoroughly been focused on the expectations of the LDCs as well as the performance of his organisation. All concerned now would like to see effective international actions coming sooner rather than later to help redeem the pledges and promises made earlier to the LDCs for facilitating their integration into the global economy in a win-win situation.