New and emerging trade dynamics: Leaving no-one behind

Concept note for the 12th Meeting of National Focal Points for Policy Coherence, 15th June 2017

(Update on the PCSD Programme of Work 2017-2018)

Introduction

The UN 2030 Agenda recognises trade as an important means of implementation (MoI) for

the SDGs. As such, SDG17.10-12 assigns a set of specific targets through which trade and

trade policy can contribute to sustainable development: (i) the promotion of a well-

functioning trading system (defined as “universal, rules-based, open, non-discriminatory,

equitable [and] multilateral”); (ii) an increase in the global export share of developing

countries; and (iii) preferential market access for Least Developed Countries (LDCs).

A prior concept note on PCD and the SDGs has examined the role of trade in the 2030

Agenda. It charted the interactions between trade and 21 different targets relating to a number

of goals including food security (SDG2), access to technology (SDG7), economic growth

(SDG8), reducing inequality (SDG10), sustainable consumption and production patterns

(SDG12). It also raised the question whether the SDG framework allows one to identify the

trade-related drivers of development with sufficient precision to guide policy. Two areas in

particular were singled out for further research: the obstacles that developing countries face

when accessing global markets; and the key enabling conditions through which they can

benefit from participation in the international trading system while dealing with the

transformational processes that greater openness to trade entails.

The current project, entitled New and emerging trade dynamics: Leaving no-one behind,

pursues this line of analysis. Building on existing OECD work, it aims to highlight the new

and emerging dynamics that are affecting global patterns and terms of trade and to draw out

some of their implications in terms of policy coherence. Applying a PCSD lens to OECD

work on trade will enable us (i) to better assess the impact that these trade dynamics may

have on enabling economic, social and environmental conditions in developing countries; (ii)

to outline policy responses that can help fulfil the goals set out in the UN 2030 Agenda,

taking account of potential spillovers and critical interactions; and (iii) to map available

resources in the OECD’s coverage of the relations between trade, development and the

SDGs, as well as any areas that may require further research.

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The note is structured in three parts:

(i) The first section provides an overview of current OECD work on trade that is of

relevance to developing countries.

(ii) The second section identifies some of the main linkages between OECD work on

trade and the SDGs and considers whether any further trade-related issues need to

be addressed from a developing country perspective.

(iii) The final section underlines a number of critical interactions through which trade

dynamics may potentially impact on developing countries’ ability to achieve the

SDGs, with a view to providing guidance on policy coherence and coordination as

a next step. The key issue of developing countries’ participation in global value

chains (GVCs) will receive particular attention.

The annex to this note contains some illustrative data on GVCs and the results of the mapping

exercise conducted in the first section.

I. Overview of Current OECD Work on Trade and Sustainable DevelopmentMuch of the recent OECD work on trade needs to be seen in the context of a broader

discussion on the Trade, Technology and Jobs Nexus. This discussion reflects a growing

recognition on the analytical side of the complexity and interdependence of transformational

processes, as well as a heightened demand from policy-makers for integrated approaches that

can address the multidimensional nature of current challenges – illustrated for instance by the

2017 MCM’s theme of “Making Globalisation Work: Better Lives for All”. As a result,

OECD has increasingly directed its attention towards the interlinkages between technological

innovation and changes in the patterns of international trade and investment, while also

seeking to provide tools that can help assess the impact that trade and technology have on

economies, societies and the environment, with particular emphasis given to labour market

effects.

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Questions for the Focal Points:

• Are any further trade-related issues relevant to developing countries that need to be included?

• How useful from their perspective would the application of a PCSD lens to new and emerging trade dynamics be?

• Should the material presented here be further developed to provide the basis for a future event (workshop…)?

The adoption of this broader perspective on Trade, Technology and Jobs has several

implications which are significant from the point of view of our project:

- TAD provides the core data and analysis on trade, but other Directorates are also

engaging with trade-related issues and there has been a renewed focus on horizontal

work within the OECD: Examples of horizontal projects include TAD’s work with

STI on the trade dimensions of digitalisation (notably in relation to trade in services),

as well as possible areas of collaboration with DAF, ELS and GOV (on issues such as

Trade and Investment; Jobs, Skills and Digitalisation; or the Measurement of Digital

Transformation). Examples of work by other Directorates include chapters on the

effects of trade in the forthcoming 2017 editions of the Economic Outlook (ECO) and

Employment Outlook (ELS), as well as the already published 2017 Skills Outlook

(EDU/STI) which is devoted to skills and global value chains. Furthermore, this

broader perspective has also led TAD to address questions of policy alignment and

coherence at the national and international level.

- TAD has developed clear arguments in support of trade and international economic

cooperation, as part of the search for a new convincing narrative on globalisation:

These arguments are well summed up in the paper International Trade: Free, Fair

and Open? presented and discussed at the 27th April 2017 Trade Committee Meeting.

- Participation in global value chains (GVCs) has emerged as a key policy issue : GVCs

reflect the interlinkages between trade, technology and offshoring of production

processes, and their emergence as a major driver of trade has had a profound impact

on the analysis both of trade and of development. GVCs have different policy

implications for advanced OECD economies and emerging/developing economies, but

in both cases the benefits of trade and innovation are tied to GVC participation.

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Box 1. Some notions on global value chains (GVCs)

International trade increasingly revolves around global value chains where services, raw materials, parts and components are exchanged across countries before being incorporated in final products that are shipped to consumers all over the world.

GVCs highlight the close connection between trade and technology : Innovation in Information and Communication Technologies (ICT), as well as improved transport and infrastructure, have made the extension of supply chains and dispersion of production processes possible by greatly reducing coordination and delivery costs.

Current TAD work on trade and sustainable development

Five main areas stand out with regard to emerging trade dynamics and their potential impact

on developing countries: (i) the implications of GVCs for trade and domestic policies; (ii)

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Box 1. Some notions on global value chains (GVCs) [continued]

GVCs have been one of the main drivers of international trade, despite a slowdown in trade liberalisation over the past decade: Around 75% of international trade, as measured in value-added terms, takes place within value chains and concerns firms buying inputs and investment goods and services from other countries that contribute to the production process. Trade is also becoming more global as a result (Annex 1).

The relation between imports and exports changes in GVCs : In the context of GVCs, goods and services are produced by combining the efforts of many actors across different countries. Offshoring of part of production to a lower-cost country is one route; another is via established supply contracts with subcontractors. Export competitiveness and export-driven growth depend on the ability to access the cheapest and best-quality inputs, including from imports, and imports themselves often contain a country’s own domestic value-added in returned form (e.g. US parts and components in cars imported from plants located in Mexico).

The nature of international trade has also changed as a result: Trade is no longer a competitive game that you win by having fewer imports or simply by increasing the share of domestic value added in exports. Instead the benefits of trade become largely reciprocal in GVCs, relying on specialisation, mutual openness and shared productivity gains for importers and exporters alike through innovation and knowledge transfers.

GVCs create new opportunities for trade-driven growth in developing countries: The fragmentation of production can allow developing countries and small or medium-sized enterprises (which represent the bulk of firms in low-income countries) to access global markets as suppliers of components or services, without having to build the entire value chain of a product. GVCs thus provide an avenue through which countries can industrialise at a much earlier stage of development by specialising in specific activities and stages of the value chain where they have a comparative advantage. Furthermore, as mentioned above, participation in GVCs can bring gains in productivity, wages and income.

However, GVCs are highly sensitive to trade policy settings, both at the national and international level: Barriers to trade (both tariff and non-tariff) cumulate along value chains, where goods may cross borders multiple times, thus adding costs and creating bottlenecks. Efficient services markets, international regulatory cooperation and high-level logistics performance are essential in this regard, with developing countries standing to gain most from the implementation of trade facilitation measures and the liberalisation of trade in services according to OECD research.

Sources: Trade Policy Implications of Global Value Chains [OECD/TAD Trade Policy Note Nov.2015] International Trade: Free, Fair and Open? [TAD/TC/RD (2017)4]

trade facilitation; (iii) trade in services; (iv) global and regional trade liberalisation; and (v)

aid for trade (TAD/DCD-DAC). Most of these areas have been the object of longstanding

work.

- Implications of GVCs for trade and domestic policies:

As mentioned above, the internationalisation and fragmentation of production processes

constitutes one of the most important dynamics affecting trade and investment flows. Under

this rubric, TAD has notably been looking at levels of participation in GVCs, the structural

determinants and policy drivers of GVC participation, the behaviour of firms within GVCs

and the complementary domestic policy agendas needed to adjust to the effects of GVC

participation. TAD, STD and STI have developed new statistical tools to analyse the trade

policy implications of GVCs, building on the OECD-WTO Trade in Value Added (TiVA)

database. Efforts are being made to collect more data on developing countries participation in

GVCs.

- Trade facilitation:

With the emergence of GVCs, trade, investment and knowledge flows have become

increasingly sensitive to policy- and non-policy-related trading costs. Tariffs matter as their

effects multiply in GVCs, but they tend to be low, declining (at least until now) and

predictable. Unpredictable delays due to customs procedures, behind-the-border barriers and

regulatory compliance can prove far more costly in a context of lean production and just-in-

time delivery. Delays of this kind may even preclude trade in time-sensitive or perishable

products. Under this rubric, TAD has notably analysed the effects of trade facilitation

measures on the operation of supply chains (including standards harmonisation for food and

agricultural products) and the benefits of implementing the WTO Agreement on Trade

Facilitation. TAD and STD have also developed a set of Trade Facilitation Indicators,

covering the full spectrum of border procedures for 160 countries, the vast bulk of which are

LDCs, in order to identify areas for action and assess the impact of reforms.

- Trade in services:

Services form an ever-growing part of the economy, generating more than two-thirds of

global GDP, employing the most workers in major economies and creating more new jobs

than any other sector. While trade in services has grown, its expansion is still dwarfed by that

of trade in manufactured goods. This pattern could change in the future: not only are services

becoming more easily tradable in and of themselves thanks to ICT, they also constitute a 5

significant part of the production and trade processes for goods. In the context of GVCs,

services are essential “links” in the chain, allowing firms to coordinate the production and

delivery processes, localise and customise goods. This view is reinforced by the value-added

data, which show notably that the service content of exports is 40-50% in value-added terms

for G20 countries (against a service share of world trade of only 20% in gross terms).

However, despite this growing importance, international trade in services often remains

impeded by significant non-tariff barriers and domestic regulations. Under this rubric, TAD

has analysed the role of services in manufacturing competitiveness and GVC engagement and

sought to assess and quantify the trade costs associated with services trade restrictions,

developing the OECD Services Trade Restrictions Index (STRI) as an evidence-based

diagnostic tool. Given recent trends and the importance of services for GVC participation,

TAD has highlighted the need for LDCs to foster a more competitive domestic service sector

and to ensure that services can be efficiently traded across borders.

- Global and regional trade integration:

With the failure to close the Doha Round of WTO trade negotiations and a slowdown in

multilateral trade reform, many economies are turning towards regional trade agreements

(RTAs) as an instrument for advancing the rules-making agenda on international trade.

Following this trend, TAD has looked at the implications of regional trade integration for

GVCs, assessed the impact of RTAs on a broad range of areas (including the environment,

agricultural markets and food security), and sought to identify ways in which they can deepen

and expand multilateral commitments. LDCs have greatly benefited from WTO membership,

through Special and Differential Provisions (market access; trips waivers; aid for trade…), as

well as ongoing discussions on services waivers for LDCs and recourse to the Dispute

Settlement Body. RTAs would need to take account of the position of LDCs in order to avoid

harming their ability to develop in sustainable fashion, while a return to bilateral trade

relations would likely prove heavily detrimental to LDCs.

- Aid for trade:

TAD contributes to the OECD-WTO Aid for Trade Initiative in partnership with DAC. In this

capacity, it highlights the rising importance donors attach to private sector development as an

engine for growth and the potential for aid and other forms of development finance to help

achieve the objective of trade expansion set out by SDG17.11 through increased GVC

participation, trade facilitation and investment in infrastructure and productive capacity.

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Work on trade and sustainable development by other Directorates

The OECD Development Centre (DEV) has tended not to deal with the trade dimension of

development, focusing instead on other areas of expertise (Migration, Gender, Inclusion…).

However, as part of the OECD Strategy on Development, it is involved in the Initiative on

Global Value Chains, Production Transformation and Development. This initiative covers

much of the same ground as TAD’s work on GVC participation (improving measurement and

evidence on new trends in global organisation of trade and production; promoting

development through better participation in GVCs…). However, it applies to a wider set of

countries through the Development Centre, whose membership extends well beyond that of

OECD.

II. Linkages between OECD Work on Trade and Development and the SDGs- TAD makes little direct linkage to the SDGs, one exception being the joint work with

DCD-DAC on Aid for Trade (see notably LAMMERSEN & HYNES Aid for Trade and the

Sustainable Development Agenda: Strengthening Synergies). This partly reflects a difference

in perspective: TAD focuses on analysing the transformational processes which are affecting

trade patterns and policy, rather than on implementing the transformative agenda set out by

the SDGs. The difference and potential complementarity between these two perspectives

(analytical and normative) was already highlighted in the prior concept note on PCD and the

SDGs mentioned above.

- However, there is significant overlap between OECD work on trade and the SDGs. One

of the main benefits of this project consists in underlining the connections between the two.

Doing so allows us not only to identify emerging trade dynamics and their implications for

developing countries, but also to better spell out the ways in which trade and trade policy can

act as effective means of implementation for the 2030 Agenda.

Possible areas of overlap include, for instance, a shared recognition of the importance of the

international trading system for fostering sustainable development. Here, TAD’s work

provides arguments that can help clarify the policy implications of SDG17.10.

- The equity and non-discrimination aspects of a “well-functioning” trading system

could notably be specified and strengthened in light of TAD’s arguments on fairness

in international trade, including its work on the impact that state subsidies and other

trade-distorting measures (such as certain forms of domestic support to agriculture or

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state-owned enterprises) taken by developed, emerging or large developing countries

may have on low-income countries; its analysis of firm behaviour within GVCs and

its promotion of Responsible Business Conduct through the application of the OECD

Guidelines for Multinational Enterprises.

- TAD’s work on the benefits and challenges associated with trade openness could also

serve to underline the powerful economic case in favour of advancing negotiations on

a multilateral basis, particularly in the context of GVCs where barriers between

countries further up or down the supply chain matter as much as barriers between

direct trade partners. Recognising the growing importance of Regional Trade

Agreements (RTAs), TAD makes recommendations on their design, e.g. arguing that

measures to harmonise RTAs (notably through the incorporation of common

standards) and deepen their provisions (particularly in the domain of trade in services)

can ensure that they complement existing Multilateral Trade Agreements (MTAs).

Furthermore, TAD provides insight on the determinants of developing countries’

participation in GVCs and on the role of SMEs. In doing so, it outlines issues of coherence

between domestic and trade policy, as well as enabling conditions at the international level

which can help overcome barriers to GVC participation and facilitate access to global

markets – thus supporting the objectives set out in SDG17.11-12.

Another area of overlap, already mentioned in the concept note on PCD and the SDGs,

concerns the danger that closer trade integration may spill over into increased illicit financial

flows (notably through trade mispricing), as well as greater opportunities for corruption. In

this respect, TAD’s perspective on the adoption of standards, trade in natural resources and

wildlife products as well as the reduction of subsidies to illegal, unreported and unregulated

forms of fishing (IUU) can contribute to the achievement of targets under SDG 14-16.

III. Critical Interactions to ConsiderCurrent OECD work on trade highlights two types of critical interaction through which

emerging trade dynamics may significantly impact on developing countries’ ability to

achieve the SDGs. First of all, GVCs amplify the effects of some existing trade-related

trends. This reinforces the importance of coordinating policy at the international level and

aligning domestic policies in order to reap the positive effects of greater trade openness and

avoid or mitigate the potentially negative ones. It may also shift the locus of critical

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interactions and therefore the areas we need to look at for potential policy trade-offs and

synergies. Secondly, broader non-GVC-specific trade dynamics also need to be taken into

consideration. They tend to be better known but are no less important to mention.

• Critical interactions relating to greater GVC participation by developing countries

1) Development strategies based on GVC participation can contribute to achieving a number

of SDGs, by increasing developing countries’ share of global exports (SDG17.11), creating

greater economic growth (SDG8), accelerating technology transfers (SDG7) and poverty

reduction (SDG1). This implies that emphasis be given to the determinants of GVC

participation (particularly for low income countries and SMEs) as key enabling economic

conditions. These determinants may include, at the international level:

- Low tariff barriers for intermediate input imports in advanced economies to ensure

market access for developing economies, but also in developing and emerging

economies. The importance of low tariffs increases in the context of GVCs, as they

become means to facilitate access to cheaper or higher-quality intermediate inputs and

therefore support productivity and export competitiveness, and as such they are

essential to the geographic dispersion of value chains. Customs unions can also

facilitate regional economic and trade integration;

- Greater service liberalisation – particularly in essential areas such as ICT, supply-

chain management services and logistics services – to allow developing countries and

SMEs easier access to global value chains and markets, including for manufacturing

and agricultural products. Firms in low income countries may benefit most in this

regard as they must often rely on a less diversified domestic service sector;

- The implementation of the Trade Facilitation Agreement and regional agreements on

the facilitation of cross-border trade (such as cross-border transport agreements);

- International regulatory cooperation, notably through convergence of standards and

certification (see, for instance, the CoAG’s SEED Scheme for agriculture);

- More efficient channelling of Aid for Trade to build productive capacity in developing

countries.

At the domestic level, they may include:

- Measures aimed at reducing trade costs by reducing delays and non-tariff barriers at-

the-border (streamlined import and export procedures) and behind-the-border,

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including investing in infrastructure (ports, roads, cargo-handling facilities, customs

capacity, broadband and ICT…) and logistics performance.

- Economic development policies aimed at increasing job creation in the mainstream

economy and facilitating the transition of workers and firms from the informal sector

to the formal one. While there are many different degrees of informality and “shades”

in the grey economy, all of which may not be affected by trade in the same fashion,

substantial parts of the informal economy may remain largely cut off from GVCs.

While some of the barriers to formal activity can be addressed at the national level

(corporate tax reform; business regulation; skills and training; technology

transfers…), measures taken at the local level are likely to be essential (support to

entrepreneurs and SMEs; formation of cooperatives; cooperation between private

actors and local government…) which implies a build-up of capacity at that level.

Areas where greater GVC participation may amplify trade dynamics, with potentially

negative effects on the economic conditions of developing countries include:

- Getting locked into particular segments of the value chain (often activities with low

value added or highly dependent on downstream partners). Developing countries may

not need to systematically move up the value chain or capture a larger share of value

added, as their comparative advantage may lie in scale of production within a given

segment of the chain. However, protectionist measures such as flowing tariff

escalation (notably on the part of emerging economies) may force developing

countries out of these segments and thus prevent them from accessing a comparative

advantage and from moving up the value-added chain;

- A race to the bottom in which pressures to reduce costs lead to a loosening of labour

and environmental regulations, tax policies and health and safety standards – hence

the importance of an enabling environment at the international level.

- Increased sensitivity to external shocks, natural disasters or economic crisis.

2) An ambitious complementary policy agenda may be required to ensure that GVC-driven

growth serves to promote greater social inclusion in developing countries and avoids

negatively impacting on environmental conditions (notably air and water pollution):

Making GVCs inclusive

GVC participation can act as a springboard for economic transformation by allowing

countries to focus their resources on activities in which they have a comparative advantage

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and in a manner that is complementary to that of their trade partners. However, GVC

participation is not without potential trade-offs in terms of its distributional effects and

impact on social and national cohesion. Several questions could be explored here:

- Are the benefits of GVC participation self-selective and self-reinforcing, with only the

more productive firms in developing countries accessing global markets through

GVCs and benefiting from further productivity gains in doing so? In this respect, the

danger is that, while greater GVC participation should translate into increased wages

and more prosperous communities in the aggregate, these gains may remain within

particular sectors or regions with widening productivity gaps and income inequality

emerging between firms that are part of GVCs and those that are not. Skills are an

important part of this “productivity gap” equation, particularly in developing

countries where the demand for and/or supply of high skilled labour may be limited.

- Another important aspect to consider from the point of view of social inclusion

concerns the effects of GVCs on gender outcomes. Are men and women equally able

to access jobs in GVC-linked firms or the economic benefits and opportunities that

greater participation provides? The picture here is likely to be complex and vary

depending on the country and value chain studied (for instance, the garment industry

tends to offer widespread employment opportunities for women). However, GVCs

may potentially amplify gender-based inequalities in contexts where domestic barriers

to women’s employment and education or restrictions to their rights exclude them

from the jobs and sectors participating in GVCs.

Measures that can help translate GVC participation into greater levels of social inclusion

could notably cover:

- Complementary policies to ensure that the benefits from greater participation in

GVCs feed back into the non-traded sector. This type of positive spillover may take

place naturally, with the non-traded sector benefiting indirectly from greater GVC

participation (as local suppliers to exporting firms, through increased domestic

consumption…). However, that may not always be the case and developing

appropriate social protection systems should therefore be a priority, alongside

structural measures aimed at improving the functioning of labour and product markets

which can accompany GVC-driven economic transformation and facilitate the

allocation of resources to more productive sectors.

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- Measures aimed at improving infrastructure and increasing labour mobility should be

complemented by urban and regional development policies that can help reduce the

territorial disparities that greater trade openness and GVC participation may

contribute to widen, both between regions and within cities.

- Greater participation in GVCs should also be complemented by measures to reduce or

eliminate gender-based segregation in terms of occupation and activity, as well as

further constraints that may restrict women’s access to jobs, resources, services or

infrastructure. Monitoring of gender gaps (particularly for wages and working

conditions) can help ensure that trade openness and GVC participation deliver

increased economic opportunities for women.

Greening GVCs

The potential interactions in terms of the environmental impact of trade are equally

significant and important to consider. By itself, the spatial distribution of production

processes throughout GVCs implies increased use of transport (notably shipping) and

therefore potentially greater levels of pollution. However, GVCs also create opportunities for

the transfer of technology, including less polluting technologies. In addition, improved

transport and trade also have the potential to reduce wastage of food and agricultural

products, particularly if they are associated with trade facilitation measures that can address

delays and bottlenecks. Over-exploitation of natural resources and sourcing of hazardous or

protected products and materials constitute other environmental issues through which

developing countries may be affected by increased trade. Here again, however, the picture is

complex as domestic policies, the management of resources as well as the international and

domestic business environments all interact.

- Ensuring that urban, infrastructure and development policies are set within the

framework of low carbon growth strategies can help mitigate the impact of GVCs on

environmental conditions in developing countries. ECO and ENV/ITF/NEA’s work

on decarbonisation and aligning policies for transition to a low carbon economy

(APT) may provide useful policy insights on this issue.

- Measures designed to ensure the conservation and sustainable management of natural

resources, particularly in agriculture, can help reduce the risk of over-exploitation.

Liberalising trade in environmental goods and services may also help promote

sustainable modes of production and consumption.

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- Environmental auditing and improved monitoring of compliance with environmental

standards can ensure greater traceability and transparency throughout GVCs, thus

increasing the legal and reputational risk associated with sourcing, producing or

investing in countries and markets that contribute to environmental degradation.

Other trade-related critical interactions

Many of the critical interactions associated with the participation of developing countries in

GVCs apply in more general terms to international trade:

- International and open trade can lead to rising income for deprived populations and a

reduction in poverty (SDG1) through increased job creation and improved economic

opportunities (SDG8), but this also requires appropriate social protection policies to

ensure that the benefits of trade and the economic opportunities it creates do not

contribute to widening inequality (SDG10).

- Trade liberalisation involves integrity risks, through the potential for increased illicit

trade and financial flows.

International trade does however give rise to some more specific interactions, including:

- The interaction between food security (SDG2), which trade can strengthen by

improving access to global markets for agricultural products, and sustainable

management of resources and ecosystems, including maritime (SDG14), which can be

compromised by intensified competition and exploitation.

- The role of trade agreements in promoting public health and access to essential

medicines (SDG3) in developing countries.

SUGGESTED READING:

BROOKS & MATTHEWS. 2015. Trade Dimensions of Food Security OECD Food,

Agriculture and Fisheries Papers N°77

CUSOLITO, SAFADI & TAGLIONI. 2016. Inclusive Global Value Chains: Policy Options

for Small and Medium Enterprises and Low-Income Countries OECD/World Bank

GEORGE. 2014. Environment and Regional Trade Agreements: Emerging Trends and Policy

Drivers OECD Trade and Environment Working Papers 2014/02

KOWALSKI, LOPEZ GONZALEZ, RAGOUSSIS & UGARTE. 2015. Participation of

Developing Countries in Global Value Chains OECD Trade Policy Papers N°179

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LAMMERSEN & HYNES. 2016. Aid for Trade and the Sustainable Development Agenda:

Strengthening Synergies OECD Development Policy Papers

LEJÁRRAGA. 2014. Deep Provisions in Regional Trade Agreements: How Multilateral

Friendly? OECD Trade Policy Papers N°180

NORDǺS & KIM. 2013. The Role of Services for Competitiveness in Manufacturing OECD

Trade Policy Papers N°148

OECD. 2015. Trade Policy Implications of Global Value Chains TAD Trade Policy Note

OECD. 2015. Implementation of the WTO Trade Facilitation Agreement: The potential

impact on trade costs TAD Trade Policy Note

OECD. 2017. International Trade: Free, Fair and Open? TAD/TC/RD (2017)4

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Annex 1: Some illustrative data on Global Value Chains

Figure 1: The incidence of global value chainsForeign value added embodied in exports of manufactured goods and exports of services, 2011

Source: OECD Trade in Value Added database (TiVA), https://stats.oecd.org/index.aspx?queryid=66237 Figure taken from OECD Skills Outlook 2017.

Figure 2: The Share of intra- and extra-regional value-added in exports (1995 and 2011)

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Annex 2: 2017-2018 and 2015-2016 Programmes of Work and Budget of the OECD Trade Committee

PWB 2017-18 Output Results Accountable bodies

Trad

e Li

bera

lisat

ion

Clarifying the benefits of multilateral, plurilateral, and regional market opening:Emerging policy issues: Ongoing development and application of OECD METRO

TC; WPTC

Trade and investment interdependencies in global value chains TC; WPTCImplications of GVCs for trade and domestic policies TC; WPTCSupporting trade-related policy actions for sustainable development:Trade facilitation TC; WPTCAid for Trade TC; DAC; WPTC

Trad

e in

Se

rvic

es

Extending the Services Trade Restrictiveness Indices (STRI):STRI database, indices and impact TC; WPTCSTRI country coverage expansion TC; WPTCClarifying the benefits and priorities for service sector reforms:Analytical work on services TC; WPTC

Trad

e an

d do

mes

tic p

olic

ies Contributing to inclusive growth and jobs through trade, investment and

innovation:Trade policy making in the digital economy TC; WPTCTrade and economic effects of International Regulatory Co-operation (IRC) TC; WPTC; JWP AGR/TRADEViable supply chains for raw materials and commodities TC; WPTCClarifying the priorities for more open environmental goods and services trade:Towards better indicators for monitoring the relationship between trade and the environment

TC; EPOC; JWPTE

Fossil fuel subsidy reform TC; EPOC; JWPTE

Expo

rt Cr

edits

Implementing the Arrangement:Maintaining efficiently and effectively all existing Arrangement agreements TC; ECGSupporting good governance and coherence in export credit policies:Maintaining ECG Recommendations and supporting ECG Transparency and Information Exchanges

TC; ECG

PWB 2015-16 Output Results Accountable bodies

16

Trad

e Li

bera

lisat

ion

Understanding the benefits of globalisation:Emerging trade policy issues TC; WPTCTrade in value added, jobs and productivity: Further policy implications TC; WPTCTrade in tasks and services as value creating activity TC; WPTCTiVa database TC; WPTCOpen regionalism TC; WPTCTrade and development:Trade, development and value chains TC; WPTCTrade facilitation TC; DAC; WPTCTrade and investment by state-owned and controlled enterprises TC; WPTCPromoting developing countries’ participation in value chains TC; WPTCGlobal relations: Southeast Asia Seminar Series and Global Forum on Trade TC; GFT; WPTCMarket openness reviews of Costa Rica and Lithuania TC; WPTC

Trad

e in

Se

rvic

es

Further development of the Services Trade Restrictiveness Indices:Database and sector indices TC; WPTCSTRI: Expanding country coverage and consolidating the STRI TC; WPTCAnalytical work on services:Quantitative measurement and policy options TC; WPTC

Trad

e an

d Do

mes

tic

Polic

ies

Trade and environment:Trade in services related to the environment EPOC; TC; JWPTEOECD-wide project on reforming support for fossil fuels TC; JMTEE; JWTEGlobal value chains in the environmental goods and services industry EPOC; TC; JWTECurrent policy issues and multilateralism:Viable supply chains for raw materials TC; JWP; AGR/TR; WPTCTrade-related international regulatory co-operation TC; JWP; AGR/TR; WPTC

Expo

rt Cr

edits

Implementation and development of the Arrangement :Maintaining efficiently and effectively all existing Arrangement agreements TC; ECGMonitoring and improving the effectiveness of the instruments of the export credits:Maintaining ECG Recommendations and supporting ECG Transparency and Information Exchanges

TC; ECG

Note: The Trade Committee actively pursues horizontal collaboration. It has contributed to the OECD New Approaches to Economic Challenges (NAEC), including by developing and progressively applying a new trade model (METRO) to policies with potentially protectionist impacts. The Committee is mainstreaming development in relevant work streams, including in particular through the Aid for Trade and the Trade Facilitation initiatives. The Committee has already strengthened its collaboration with the Committee of Agriculture, the Environment Policy Committee, and the Regulatory Policy Committee, including by aligning our analysis on specific areas of joint interest. Increased efforts will be made to reflect better the relationship between: trade and investment (including via DAF); trade, global values chains and the digital economy (including via STI); and trade and wider economic and structural policy, particularly as regards services sectors (including via ECO and EDRC reviews).

Much greater use can be made of more systemic but also selective collaboration with other OECD Committees (and Directorates) in order for the Committee both to inject trade policy considerations into the perspectives of other policy communities and to benefit from the expertise of others. One such issue is gender, which is not the subject of separate research in the Committee per se but where substantive work from across the OECD can inform the Committee’s work. This is particularly the case in country specific analysis where, in some cases, equality of opportunities may be a systemic

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concern. In the area of trade policy specifically, gender may be an issue addressed in Committee work on integrity in trade, inclusive GVCs, and e-commerce.

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