The World Bank and the trade agenda at the global level

At the global level, the Bank aims to contribute to the development of an international trading system that is more supportive of developing countries. The Bank is working with developing countries, non-governmental partners and other World Trade Organization (WTO) members to encourage progress on the Doha Round - the multilateral trade negotiations launched in Doha, Qatar in November 2001 – that have development at their center. In particular, the Bank provides information, analysis and data to support the negotiations.

The World Bank welcomes the resumption of the Doha negotiations on February 7, 2007. The talks had been suspended six months earlier, on July 23 2006, to allow a “time out” to review positions and examine available options. There is now a narrow window of opportunity to conclude a preliminary package that could pave the way for a final. All parties will need to demonstrate flexibility and political will for this to happen. The key to reaching such a package remains greater cuts by the US on trade-distorting agricultural support, greater agricultural market access by the EU and further market opening in manufactures by developing countries such as Brazil and India.

Failure to reach a deal would likely also cost significantly in terms of: the potential weakening of the rules-based multilateral system. The access to large markets, predictable framework and transparency provided by this system are important for all countries, but especially for poorer countries for which global markets are critical for economic growth and poverty alleviation. Failure to conclude a deal could also see a surge in the protectionist sentiment in developed and developing countries; increased stress on the WTO’s dispute settlement system; and increased scope for trade diversion from the rapid growth of preferential trade agreements (PTAs), which cannot address systemic distortions such as agricultural subsidies. Moving multilaterally to cut trade barriers remains the best alternative to promote development and reduce poverty.

While not formally part of the negotiations, aid for trade remains an essential complement to a successful Doha Round. Many world’s poorest countries are unable to take advantage of new trade opportunities because of lack of the basic machinery for trade, lack of efficient trade institutions and poor regulation. Aid for trade can help countries address these supply-side constraints and assist countries manage the transitional adjustment costs associated with trade liberalization. The Bank will continue to support aid-for-trade agenda to facilitate the integration of developing countries in the world economy.

Regardless of trade agreements, all countries can benefit from reforming their own trade regimes - to promote economic efficiency and growth while diminishing budgetary waste. The Bank is continuing to advocate for reform of harmful developed country policies, and to work at the country level to promote trade reform and competitiveness in developing countries.