Overview

  • Trade is an engine of growth that creates jobs, reduces poverty and increases economic opportunity. Over one billion people have moved out of poverty because of economic growth underpinned by open trade since 1990. On the global stage, the WBG supports an open, rules-based, predictable, international trading system.

    Open trade brings important, often overlooked benefits to lower-income households by offering consumers more affordable goods and services. For the extreme poor, trade can help reduce the prices of food. For women, trade can create jobs and increase incentives for girls to stay in school. 

    Developing countries often struggle with indirect factors that hinder their access to global markets, such as anti-competitive business practices, regulatory environments that are unfavorable to business growth and investment, or limited infrastructure capacity. Even a country with liberal and transparent trade policy suffers if its markets are not connected, and many of the “bottom billion” live in places that are landlocked, remote, or otherwise ill-served by international trade links. The World Bank Group helps its client countries improve their access to developed country markets and enhance their participation in the world economy by overcoming these obstacles.

    Despite the benefits trade can bring to economies, not everyone is experiencing the benefits of globalization. Research shows that trade has resulted in job losses in certain regions and industries. We are working to advance policies that help all countries benefit from the opportunities that come with trade and technological change. These include short-term responses such as training programs and job search assistance, but also long-term solutions that build more resilient economies. Strong safety nets, access to education that prepares students for the jobs of the future, and policies that help workers become more mobile are all critical to these solutions.

    Overall, the world needs to strengthen the global trading system. The system of global trade rules that has nurtured unprecedented economic growth across multiple generations faces tensions. These tensions prevent us from looking at the unique untapped benefits further trade reform can bring to the global economy.

    Last Updated 9/28/18

  • The WBG is supportive of an open, rules-based, predictable multilateral trading system, and among its objectives are to help countries participate in and enjoy the benefits of such a system. Key strategies for reaching these goals are supporting trade agreements, emphasizing trade and competitiveness at the core of national development strategies, and promoting trade-related reforms through effective Aid for Trade programs.

    The WBG helps governments design and implement policies to maximize their trade competitiveness in both goods and services. The approach encompasses the full set of policies that shape individual firms’ capacities and incentives to import and export. The work aims to help governments reap the gains from openness to trade and regional integration, and also to manage risks of economic changes, such as adjustment costs and external shocks. The main pillars of the World Bank Group’s work in trade are:

    • Trade Policy and Integration: Analysis and policy advice to help countries eliminate unneeded non-tariff measures, or NTMs | Modernizing services regulations and trade | Addressing the poverty and labor impacts of trade policies and shocks | Supporting global and regional integration, including free trade agreement negotiations and World Trade Organization accession and participation.
    • Trade Performance: Help for governments in designing and implement policies to maximize their trade competitiveness in both goods and services. | Assistance to create a comprehensive policy frameworks that shape individual firms’ capacities and incentives to import and export | Help for governments to reap the gains from openness to trade and to manage both adjustment costs and external shocks.
    • Competition Policies: Eliminating anti-competitive market regulations | Strengthening antitrust rules | Promoting pro-competition sector policies | State-owned enterprises.
    • Trade Facilitation and Logistics: Strengthening trade corridors, supply chains, and trade logistics | Modernizing border management | Enhancing connectivity between firms, markets, and consumers.

    To fund much of this work, the World Bank Group has five main, trade-related trust funds totaling $122 million:

    • The Multi-Donor Trust Fund for Trade and Development 2 (MDTF-TD2) is the largest source of donor funds supporting analytical trade work across the WBG. The WBG has received $34.5 million in pledges to the MDTF-TD2 over three years.

    • The Trade Facilitation Support Program (TFSP) is multi-donor platform launched in June 2014 that provides developing countries with rapid-response technical assistance to help them align with the World Trade Organization’s December 2013 Trade Facilitation Agreement. To date, 30 countries have sought support from the $30 million trust fund.

    • The Trade Facilitation Facility (TFF) supports improvements in customs and other trade facilitation systems that help developing countries reduce trade costs and improve competitiveness. As of March 2015, 76 projects with an allocation of $49.8 million have been approved. Eighty percent benefit African countries.
    • The Enhanced Integrated Framework (EIF) trust fund supports WBG work as part of the global EIF partnership’s efforts to help least developed countries tackle constraints to trade. It funds capacity-building in LDCs, diagnostics that identify key trade constraints, and implementation of technical assistance projects. The trust fund has received $4.3 million and is currently providing trade-related support to 15 LDCs.

    • The Transparency in Trade (TNT) trust fund is an ongoing partnership between the ITC (Geneva), UNCTAD, and the WBG, with active support from the AfDB.  Its goal is to collect and make available data on non-tariff measures and services trade policies. Currently, Russia, contributing US$1.5 million, is the only donor to the TNT.

     

     

  • Lending and Technical Assistance:

    • The Great Lakes Trade Facilitation Project, currently under preparation, is a $140 million, multi-country investment operation that tackles constraints to cross-border trade between the Democratic Republic of the Congo and its five neighbors, Burundi, Rwanda, Tanzania, Uganda, and Zambia. Investments in cross-border infrastructure, policies relating to border operations, and cross-border administration will help lower trade costs, improve trading capability, reduce time to cross borders, and help integrate conflict-affected communities.

    • In Lao PDR, WBG technical assistance has helped develop the Lao Trade Portal, an online tool that serves as an authoritative source on the country’s trade laws, regulations, and procedures. The trade portal reduces the time needed for traders to acquire information and carry out transactions.

    • In Honduras, WBG technical assistance improved trade-related procedures for agribusiness products by linking three critical government agencies to simplify exports and imports. More than 700 Honduran companies selling abroad can now obtain export permits in one day, compared to the three days it took previously.

    • In Kenya, the World Bank Group is advising the government on competition regulations that will break up cartels in key economic sectors. These regulations will prohibit anticompetitive agreements, generating private savings for firms and households. Estimates put savings at about $18 million annually in insurance markets alone.

    • In the Philippines, the World Bank Group has helped implement reform that dramatically cuts the time needed to register new vessels. One result is that incumbent operators are no longer able to prevent new companies from serving certain routes. This translates into a potential 5 percent savings in transport logistics costs.

    Policy Advice and Analysis:

    • The WBG’s Trade Competitiveness Diagnostic Toolkit facilitates a systematic assessment of a country’s performance and capabilities in export markets. It has been applied in over 25 countries.

    • Within the WBG Doing Business Project, which measures business regulations and their enforcement across 189 economies, the “Trading Across Borders” indicator measures the time and cost (excluding tariffs) of exporting and importing cargo by sea.

    • A recent report, Africa's Unexplored Potential in Trade in Services, sheds light on uncharted opportunities for services trade in Africa and invigorates the discussion about the role of services in trade diversification and economic upgrading on the continent. 

    • A recent book, Making Global Value Chains Work for Development, highlights ways developing countries participating in GVCs can grow, advance, and create jobs, when governments have the proper policies in place.

    Open Trade Data:

    • In cooperation with other international development partners, the WBG launched the Transparency in Trade Initiative to provide free and easy access to data on country-specific trade policies. This initiative includes the recently revamped World Integrated Trade Solution (WITS) and the Services Trade Restrictions Database.

    • The biennial Logistics Performance Index (LPI) measures the logistics "friendliness" of 160 countries based on a worldwide survey of freight forwarders and express carriers.

    • The Trade Costs Dataset shows that developing countries face disproportionately higher costs and lower levels of trade integration than high-income countries.

    • To better monitor trade policy developments, the WBG has supported the Global Trade Alert, a joint venture of think tanks around the world, and maintains the Temporary Trade Barriers Database. Both databases allow users to track the use of trade-distorting government measures initiated since the 2008 crisis.

     

Api


MULTIMEDIA

Image
click


PHOTO GALLERY

More Photos Arrow

In Depth

image
Data

TCdata360

TCdata360 is an initiative of the World Bank Group's Trade & Competitiveness Global Practice, which helps countries achieve the Bank Group's twin goals, ending extreme poverty and boosting shared prosperity, through ...

image
Brief

Aid for Trade

Aid for Trade is a multilateral initiative designed to assist developing countries integrate into the world economy.

image
Brief Apr 04, 2018

Trade Facilitation and Logistics

Experts in the World Bank Group work with developing country policymakers and private sector leaders to increase connectivity and facilitate trade.

image
Results Apr 04, 2018

Stronger Open Trade Policies Enable Economic Growth for All

Trade is central to ending global poverty. Countries that are open to international trade tend to grow faster, innovate, improve productivity and provide higher income and more opportunities to their people.

Additional Resources

Contact

Washington, DC
Yanina Budkin
ybudkin@worldbank.org