WTO review of the adjustment costs of liberalisation
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CTA. 2003. WTO review of the adjustment costs of liberalisation. Agritrade, July 2003. CTA, Wageningen, The Netherlands.
Permanent link to this item: http://hdl.handle.net/10568/52447
A WTO study 'Adjusting to Trade Liberalisation - the Role of...
A WTO study 'Adjusting to Trade Liberalisation - the Role of Policy, Institutions and WTO Disciplines' was published on May 13th 2003. It seeks to 'identify tools at the disposal of governments to smooth adjustment, to minimise an economy's adjustment costs and to alleviate the burden of those who suffer most'. The main conclusions of this study are: that while trade liberalisation is an agent of economic change it does not lead to drastic changes in a country's overall production structure; adjustment costs are typically smaller than the gains from trade; those who suffer from the adjustment process can be identified and measures can be set in place to alleviate the burden; policies can be adopted to reduce adjustment costs, particularly if trade-policy reform is underpinned by international commitments; the pace of change influences adjustment costs, with slow change undermining the viability of the adjustment process; in many cases effective adjustment to trade liberalisation will require the expansion of a country's export sector and this may be an argument for pro- export policies; WTO agreements seek to provide space for governments to tackle adjustment problems. Comment: The observation that 'in many cases effective adjustment to trade liberalisation will require the expansion of a country's export sector and this may be an argument for pro-export policies' is particularly pertinent for the ACP. The process of CAP reform which provides the backdrop to both the WTO and EPA negotiations is greatly reducing or is likely to greatly reduce the value of current exports to the EU in major sectors of export interest to ACP countries. This and the EU's disengagement from commodity stabilisation schemes is likely to exacerbate any adjustment costs that ACP states may face under trade liberalisation, be it undertaken in a multilateral (WTO) or bilateral (EPA) framework.