Panitchpakdi: Regionalism for development

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Former WTO DG and current UNCTAD Secretary-General Supachai Panitchpakdi on “regionalism for development“:

[D]eveloping countries should strengthen regional cooperation with other developing countries, and proceed carefully with regard to North-South bilateral agreements…

Bilateral FTAs often transform formerly non-reciprocal trade preferences between developed and developing countries into symmetric market access regulations; thus, the cornerstone of the post-war international trade system, the special and different treatment of developing countries, is continuously being eliminated…

developing countries often have to accept far-reaching commitments regarding formerly classical domestic policy without being adequately compensated in terms of warranted market access and market success…

Simultaneous participation in many FTAs with different rules and implementation horizons makes policy coordination in developing countries increasingly difficult…

[In South-South PTAs,] initial foreign competition within the region may be less difficult to handle, the technological gap vis-à-vis competitors from more advanced countries outside the region may be easier to close, and the probability of finding a level playing field is greater.  In other words, the regional market often sets less exclusive benchmarks than competition with mature suppliers, so that even production at the infant industry stage can be successfully broadened.

I’m not convinced that preserving SD&T or opening trade between similar countries are critical to economic development, but UNCTAD has a 240 page report that makes the case. I just have to find time to read it!

[HT: Emmanuel]

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