Operationalizing the Concept of Policy Space in the WTO: by k966Xd


									                       Development and the Global Trade Architecture

                       Background Note for 2nd Steering Group Meeting1

This note is intended to serve as the basis for discussion at the March 21, 2005 meeting of the
Steering Committee of the DFID project on Development and the Global Trade Architecture.
It draws on background research undertaken for the project as well as recent discussions and
analysis undertaken in the context of the UN Millennium Taskforce on trade and the coming
G8 meetings to identify possible areas for action to pursue the basic objective of the project:
enhancing the development relevance of trade agreements, especially the WTO.

The focus of the note is on areas where operational policy recommendations could be
developed prior to Hong Kong. Although this places the research agenda on the backburner
for purposes of the meeting, the options are based on an understanding of the research
available to date, and nothing precludes additional work within the context of this project.
Indeed, more research is needed on all of the options raised in this note, and the discussion
may generate other suggestions as well.

Four broad possible areas for action are proposed for discussion:

       Identification of agreement-specific SDT provisions that would unambiguously
        improve development prospects;
       Establishment of a policy flexibility-cum-enabling mechanism for developing
        countries in trade agreements;
       Mobilization and effective allocation of development assistance to bolster trade
        capacity in poor countries and address adjustment costs from global reforms,
        including preference erosion;
       Launching a global program to monitor trade and investment-related policies in
        developed and developing countries.

In each of these four areas we sketch the possible action agenda and identify questions for
discussion by participants. The objective in each case is to determine whether this is worth
pursuing further and advocating in policy debates. As noted, in all four instances this may
require additional analytical work, as well as a process of consultation and engagement with
the relevant policy communities and stakeholders. Guidance on how best to do the latter and
what the role of steering committee members could be in this regard will be sought. As
discussed at the Oxford meeting, there is more work ongoing under the project, but we
believe that these four areas are most ripe for action.

Realizing the promise inherent in the Doha Ministerial declaration to pursue development as
an objective requires well-known actions: a transformation of agricultural trade policy in
OECD countries, liberalization of trade and investment in services in North and South, and
further liberalization of trade in manufactures, especially by developing countries as the
barriers on such trade are highest there. Research suggests that the potential global gains from

  This note was prepared by Bernard Hoekman and Susan Prowse. The authors are affiliated with the World
Bank and Groupe d’Economie Mondiale, Institut d’Etudes Politiques, Paris; and with the Department for
International Development (DFID), UK, respectively. The views expressed are personal and should not be
attributed to the World Bank or to the UK Government.

an ambitious Round are large—in the $100 to $250 billion range for merchandise trade alone.
If gains from greater competition in services, better rules and reductions in the incidence of
non-tariff barriers are considered, the potential gains are much higher still. We abstain here
from a specific discussion of the market access agenda, although this is arguably the most
important dimension on which trade agreements can support development prospects. The
reason is that this agenda is well understood and there is much analysis that can be readily
drawn upon.

Whether negotiators will deliver an ambitious outcome depends on the mobilization of strong
support in each WTO member for taking difficult political decisions. Reform of agriculture in
the EU, Japan and US is a precondition for actions by the major developing countries to
further open their markets and vice versa. The required reciprocity is something that the
WTO is designed to generate. However, “business as usual” will not maximize the
development benefits for the smaller and poorer WTO members. To do that, it is necessary to
complement WTO negotiations with more development assistance to these countries for
improving trade capacity, productivity and competitiveness, and to take concrete actions to
make special and differential treatment (SDT) provisions more meaningful.

SDT in the WTO spans promises by high-income countries to provide preferential access to
their markets, the right to limit reciprocity in trade negotiating rounds to levels “consistent
with development needs,” and greater freedom to use trade policies. The premise underlying
SDT is that industries in developing countries need assistance for some time in both their
home market (through protection) and in export markets (through preferences). Many of the
poorest countries today have not benefited from existing SDT provisions. In part this is
because tariff preferences have been subject to restrictive rules of origin and conditions. More
important are a lack of competitive supply capacity and the absence of a policy environment
that supports the operation of efficient industries.

Market access, rules that support development and supply capacity are three key determinants
of the benefits for countries from membership of trade agreements. The Doha SDT agenda
offers considerable scope to improve rules, change procedures to enforce rules, link aid more
effectively to the national trade agenda, and expand such aid in instances where developing
country governments have determined that this is a priority. Moving forward on this agenda
could do much to foster greater integration of developing countries into the WTO. The goal
should not be to make the WTO a development organization—which is not desirable—but to
complement the “business as usual” emphasis on the exchange of commitments between
large(r) countries with (i) better agreement-specific development provisions (“vertical SDT”);
(ii) more effective mechanisms allowing for policy flexibility (“horizontal SDT”); and (iii)
expanded development assistance for small and poor countries to benefit from trade
opportunities by enhancing competitiveness of firms and farmers.

In what follows we group questions around issues that are best dealt with by either a vertical
or horizontal approach; i.e. around which issues can be addressed by better agreement-
specific development provisions as opposed to issues that require a horizontal process of
SDT—more effective mechanisms—to allow for policy flexibility and expanded
development assistance.

1. WTO Rules and Agreement-specific SDT
The 88 proposals put forward by developing countries to make existing SDT provisions more
precise and effective reveal dissatisfaction with many of the WTO rules. There are many

agreement-specific SDT provisions, often in form of exemptions and transition periods for
LDCs or all developing countries. Agreement-specific opt-outs or specific sui generis rules
for developing countries can be an effective way of ensuring that rules in a given area support
development. But this requires clarity regarding both what is “wrong” with current rules and
the benefits associated with a proposed SDT provision.

The rules concerning regional agreements provide an example. Preferential trade agreements
revolve around trade discrimination: this is an explicit objective. As global development
prospects are best served by nondiscrimination (World Bank, 2004), from a development
perspective the best outcome would be if regional agreements promoted the principle of
nondiscrimination. Achieving this is a major challenge given that the driving force of trade
agreements is mercantilist—improving (preferential) access to markets. This specific
challenge is an illustration of a more general one: to change the modus operandi of designing
and implementing trade agreements so as to place development (economic efficiency and
equity) considerations more at the center of deliberations.

Agreements that the EU and US are negotiating with developing countries can do much good
if designed in a way that puts development first. The ongoing EPA negotiations are the most
important in terms of scale and country coverage, but the US, Japan and other large traders
are also much more active in negotiating agreements with developing economies. Taking
development seriously in such negotiations has a number of implications, including
identification of the most appropriate form of, and membership in, counterpart regional
arrangements, addressing trade barriers with neighboring countries and identifying actions to
reduce trade costs, something that is of great importance for landlocked countries. Perhaps
most important in the context of EPAs and Africa is that there may be trade diversion costs
and tariff revenue losses associated with a move to preferential, reciprocal free trade with the
EU. The reason is that if ACP partner countries maintain current levels of protection against
the rest of the world, the effect of moving to free trade with the EU will be to transfer much
of what is now collected in revenue on imports to EU producers in the form of higher prices.

From a development perspective, an approach that involves the developed partner deepening
duty- and quota free access to its markets by taking action to lower the costs of satisfying
NTMs on exports, complemented with effective assistance to facilitate trade and improve
services and related behind the border regulation, without insisting on full reciprocity by
developing country partners would be a better outcome. Pursuit of nondiscriminatory tariff
liberalization by developing countries where such barriers are still significant would be better
than full preferential liberalization vis-à-vis the developed partner only. If the quid pro quo
by developing countries in such North-South agreements would be further nondiscriminatory
reforms, with commitments bound in the WTO, regional integration would generate benefits
for all WTO members. This should not imply moving to completely free trade, although that
arguably should be the ultimate goal. Many sub-Saharan African countries still rely on import
duties for a significant portion of total government receipts, so that revenue concerns and the
ability to put in place alternative revenue sources should influence the speed of liberalization.

Such an approach would imply a major change in the philosophy underlying the negotiation
of trade agreements. Developed countries that pursue North-South agreements will have to
accept “free riding” by the rest of the WTO membership in terms of access to the partner
country markets. While inconsistent with the narrow mercantilist objectives that historically
drive trade negotiations, this is an implication of putting development considerations first.
Another implication is that a more development-oriented approach will require changing

WTO rules. Currently WTO rules require that free trade agreements result in the reciprocal
removal of trade barriers on substantially all trade between the partner countries. A better
approach from a development perspective would be to revisit the provisions of the relevant
articles on regional integration in the WTO as they apply to North-South agreements along
the lines proposed above. This can be regarded as an example of the type of initiative called
for in the Doha WTO Ministerial Declaration, which calls for more effective special and
differential treatment (SDT) provisions for developing countries.

   Is this Art. 24 suggestion worth pushing as a group?
   Are there similar agreements/rules where there is an “obvious” case to be made (in
      terms of development/efficiency/equity payoffs) for a specific rule change/SDT?
   What other areas could be targeted for analytical work that would be useful in
      identifying potential specific suggestions (and complementing as opposed to
      replicating work done elsewhere, e.g., by ICTSD)? Agriculture?
   Many of the SDT proposals that have been put forward are motivated by
      implementation costs and consequent expenditure implications (this includes trade
      facilitation). Increased expenditure implies increased demand for assistance—is this
      better dealt with horizontally as part of the “aid for trade” agenda rather than through
      specific linkage in specific WTO agreements?

2. Policy flexibility and the “enabling” mechanism
Agreement-specific SDT provisions are an important way of recognizing and incorporating
development concerns into the WTO. However, a necessary condition is that the exceptions
support development. A practical problem is that it is not necessarily clear whether they do
so. Given the difficulty of identifying and defining ex ante beneficial specific SDT
exemptions—an illustration of this problem is that the above proposal on regionalism, for
example, has not been put forward by any country—allowing for greater policy flexibility for
an agreed subset of WTO rules could help achieve development objectives of governments.

As discussed at greater length at the Oxford meeting and in some of the background papers,
greater policy flexibility could be pursued through the creation of a mechanism that permits
the use of policies that are otherwise constrained or prohibited by WTO rules and
complements this flexibility with consultations aimed at helping countries achieve their
objectives. The goal would be shift away from a confrontational, dispute-settlement-type
interaction and towards a more cooperative, “enabling” mechanism that generates
information on the results of the policies adopted and assistance in identification and use of
potentially less trade-distorting instruments. The associated multilateral interactions on trade
policies would help provide a framework for assisting governments to assess whether
instruments are achieving stated objectives. Such assessments would also consider the
negative international spillovers of the policies. Results and findings of reports and
discussions would be published and disseminated in the countries concerned to increase the
public profile of trade-related policies.

A major lesson of development (donor) experience is that country ownership and leadership
at the highest levels is critical in ensuring concrete and sustained follow-up in removing
constraints to trade expansion. A cooperative approach that allows for policy flexibility
accompanied with formal consultations on results and identification of the preconditions for
benefiting from WTO membership could help mobilize and sustain such engagement.

      An enabling-cum-consultation-cum-transparency mechanism could extend beyond a
       narrow focus on policies that potentially violate WTO rules. A more regular
       cooperative interaction on trade policies and constraints to trade integration could
       help improve communication between the development and trade communities. The
       background analysis and discussions could help identify where development
       organizations might assist governments attain the preconditions for benefiting from
       implementation of a specific set of WTO disciplines. Should the case for putting into
       place a process of consultation and information exchange on the effects of policies be
       generalized, i.e., not be limited to instances of invocation of policy flexibility? (See
       also possible action item #4 below)
      If there is a consensus that an effective horizontal SDT mechanism would be
       beneficial, a number of issues arise that require analysis/discussion. These include the
           o Who would participate in the process? How should civil society and the
             private sector from the countries concerned be involved?
           o What institution should be tasked with undertaking the analytical work to
             inform discussion of effects of policies? Can this be done in the context of an
             expanded TPRM? Article IV surveillance by the IMF? By independent civil
             society groups along Transparency International lines?
           o What should be the periodicity of such interactions? Is it necessary that this be
             done annually or should it be less frequent?
           o What constitutes a “strong trade agenda/policy set” for trade integration?
      Should the focus in the coming months be on advocating the adoption of an
       agreement in principle to consider the adoption of a horizontal SDT mechanism,
       leaving fleshing out of specifics to a work program that extends beyond Hong Kong,
       or should a fully fleshed out set of options be commissioned?

3. Aid for Trade
A Doha reform package can be expected to generate sizeable gains to both developed and
developing countries. However, the consequent trade reforms will require adjustment, both to
the economic and social costs, and to undertake concomitant policy reform. Taking advantage
of improvements in market access will entail additional domestic policy reform to facilitate
trade as well as trade-related capacity building. As discussed at the Oxford meeting,
strengthened grant-based financing mechanisms targeted predominantly to the poorest
countries to improve trade supply capacity and redistribute some of the gains from trade
liberalization to those countries that stand to gain the least could do much to enhance the
development relevance of the Doha Round. There is an important link here between the global
public good derived from the WTO rules based system and the development needs of
countries: some development issues both benefit and require the obligation of the entire global
community. The global trade regime as a global public good has and can further have a strong
impact on development, poverty reduction, and arguably global stability.

An expanded allocation of aid to support trade on a multilateral basis can help those countries
that are unlikely to benefit much from a global set of trade reforms in the short term—such as
countries that will experience an erosion in preferential access to markets—as well as

attenuate concerns regarding the costs of implementation of new (and old) rules. The latter has
become an issue in the WTO because the ‘adjustment burden’ of any new rules will mostly
fall on developing countries, as they will reflect the status quo in industrialized countries
(‘best practice’). Longer transition periods—the approach used in the Uruguay Round—are
now recognized as an inadequate response.

Gains from trade liberalization are conditional on an environment that allows the associated
movements of labor and capital across sectors to occur, that encourages the needed investment
in new sectors of activity and that provides vulnerable households with access to assistance if
they are subject to serious adverse shocks. Insofar as these conditions are not met,
complementary actions will be needed prior to and in conjunction with the trade reforms.
Some governments will have the capacity to redistribute some of the local gains, while others
may confront much greater constraints.

From a global equity perspective, what matters is not just the capacity of developing country
governments to engage in redistribution and improve the livelihoods of poor households, but
that much of the gains from global reforms will accrue to developed countries. Providing
sizeable international transfers has historically been of considerable importance in helping
persuade countries to adopt more open, market-oriented policies. Liberalization measures in
the EEC significantly helped to create a favorable economic environment that contributed to
growth and welfare, but these policies were combined with economic assistance to the weaker
countries and regions (through the Structural and Cohesion Funds – accounting for around 35
percent of total budget), which helped to shape positive popular perceptions of integration.
The post-war Marshall Plan was instigated in part to support a multilateral integration strategy
and thereby facilitate a global economic recovery. In the period 1948 to 1952 around $13
billion was made available, representing several percentage points of US GDP.

Multilateral trade integration will bring substantive net aggregate benefits to rich countries,
some of which can be transferred to developing countries as aid. Doing so could greatly
enhance the development relevance of the WTO. There are a number of ways donor countries
could draw on a small increment of the total gain associated with a successful Doha outcome
to help meet adjustment and integration needs in developing countries. These include direct,
additional contributions from ODA budgets (perhaps motivated by the above mentioned
gains); leveraging future aid commitments through an international financing facility type
mechanism; an implicit transfer of part of the tariff revenue collected on products that are
liberalized, capturing an increment of the consumer gain through a levy on specific consumer
products; and reallocating some of the subsidies and income support now going to agriculture
for development assistance. These options do not necessarily imply direct earmarking of
revenues—they are all examples of ways through which countries can link the aid and trade
agendas by committing additional aid on the basis of expected trade reform-related gains, and
motivating this on the basis of recognition of the benefits associated with redistributing some
of these to poor countries.

The operational framework for allocation of aid for trade must place assistance for trade
reform, adjustment and competitiveness within the broad context of a country’s development
program. Whether trade capacity and trade policy reforms should be given greater priority is a
decision for governments. To determine this requires that trade be considered when designing
national development strategies. The institutional mechanism to identify priorities and allocate
additional aid for trade could build on the Integrated Framework for Trade Related Technical
Assistance. The Integrated Framework (IF)—a collaborative effort involving six multilateral

agencies (the IMF, the International Trade Centre, UNCTAD, UNDP, WTO and the World
Bank), seventeen bilateral donors, and LDC governments—has already become a well-
established mechanism to mainstream trade into a country’s development programme and
provides a programmatic approach to assistance for adjustment and integration. The linkage of
the IFIs with the UN agencies (trade development) and the WTO (trade rules) is a clear
advantage. In terms of an effective operational structure, building on the existing Integrated
Framework would make considerable sense. The mechanism is already established, has been
piloted, and subject to external evaluation. It has established eligibility criteria. It has broad
based donor and recipient support. Proposals for new mechanisms and institutions would take
considerable time to gain multilateral support (if at all), would also need to be undertaken in a
phased approached (i.e. piloted), and evaluated. The IF is not a new institution or mechanism
but benefits from strong partnerships and has the potential to bring in other key stakeholders
(and notably the private sector).

   Is there agreement that any meaningful increase in aid for trade will only come about if
      a “horizontal” approach is applied—i.e., one that centers on national priorities, with
      trade issues determined by local circumstances as opposed to WTO
   Does it make sense to link the case for additional development assistance for trade to
      the expected gains accruing to rich countries from the Doha Round outcome?
   As discussed in the Page/Kleen SDT report for Sweden and at the Oxford meeting,
      given that aid may be fickle and the horizontal SDT option entails some risks of
      transforming the WTO into a development agency; is a preferred option (albeit second
      best) to enhance use of preferences (a positive agenda for preferences), and establish a
      specific compensation mechanism for inevitable preference erosion?
      Specific IF related issues:
          o The IF process is in part an attempt to move the funding gravity away from the
              IFIs and to a country owned process - however against this arises issues over
              conditionality. Any increased development assistance will require
              accountability both ways. To what extent should there be an emphasis on
              market access and linkage to WTO commitments as part of the needed
              accountability? Or should this be explicitly rejected? If so, what accountability
              criteria and mechanisms should be put in place?
          o Clearly it will be necessary to extend the IF beyond the LDCs if the IF is to be
              the basis for determining trade priorities. What should be the eligibility criteria,
              i.e., LDCs plus who?
          o To date the IF has relied on Consultative Group and Roundtable pledging
              sessions to implement adjustment needs and capacity building. Should this
              change? Specifically, should a case be made for (temporary) earmarking of
              funding for national trade agendas?

4. Measuring policies that affect trade and investment: towards full transparency
In this era of rapid globalization, we remain surprisingly ignorant about policy barriers to
international integration. Economists have succumbed to the “lamppost syndrome”, and
measured with great sophistication what they can easily measure –barriers to goods trade.
Even here the focus is mostly on statutory MFN tariffs and explicit quantitative restrictions
on imports or exports. We have little data and few good measures of the types of nontariff
policy barriers that are increasingly used by countries—such as antidumping and safeguard

actions and excessively burdensome product standards. Matters are much worse when it
comes to information on policies affecting services trade, foreign investment, and the
movement of people. Services now account for over 40 percent of international transactions,
although data limitations imply we do not really know the magnitude of the flow. We know
even less about the origin and destination of services trade and investment flows and policies
affecting these. The WTO is no help because GATS commitments are based on a positive list

An effort to begin to remedy this gap in our knowledge of how open countries are to
international integration is urgently needed. The lack of data has made it difficult to examine
the relationship between policies and performance, and to identify priorities for domestic
reform and international cooperation. Questions that we could begin to address include: How
far can the gains from globalization be reaped by liberal trade and investment alone while
migration remains virtually prohibited? What are the implications of the coexistence of
relatively liberal regimes for goods trade and investment with relatively restrictive regimes
for services trade and investment – as seems to be the case in China, India and Malaysia?
What are the implications of allowing foreign investment in markets that still restrict trade –
in Africa and Asia? What are the implications of restrictions on foreign ownership (typical in
Asia) and restrictions on new entry (typically in many developing countries), and how do the
two interact? What are the implications of liberalizing the permanent entry of skilled
personnel while restricting even the temporary entry of unskilled personnel? What are the
areas where there are the biggest payoffs from global cooperation – trade in goods and
services, investment, migration – and where are the political economy battles worth fighting?
Better data on underlying policies are a precondition for better policy advice and
understanding of the process of globalization.

Better data are also needed for the more “pedestrian” but very important objective of
monitoring policies. This is especially relevant in light of the global commitment to take
action to attain the MDGs. The IMF, World Bank and UN agencies are all tasked with
monitoring progress on this front and documenting the policies that are implemented by
governments—North and South—to pursue the MDGs. Work done to prepare the trade
chapters of the Global Monitoring Report 2004 and 2005 has revealed that the large gaps in
our information on policies affecting international integration impede our ability to compare
country “performance” and assess the direction and magnitude of policy changes on an
annual basis. If we are to be able to take monitoring of integration-related policies seriously,
there must be a great improvement in data collection.

An effort to remedy the data gaps will involve several steps.

1. Defining the conceptual framework
There are two key challenges. First, to place the different modes of integration (trade,
investment and migration) into a comprehensive framework. Such a framework must be
general enough to allow for substitutability between modes (as in the standard Heckscher-
Ohlin model) as well as the complementary relationship suggested by more recent
developments in trade theory. Second, to develop methods to identify relevant policies and to
quantify the different barriers implied by policies for each of these “modes” of integration. In
trade, there is the issue of non-tariff measures, including mandatory standards or regulations
for goods and services and the use of instruments of contingent protection. In FDI, there is
the question of finding a common metric for restrictions on entry and restrictions on

ownership. In migration, identifying and quantifying the range of quantitative, fiscal and
administrative barriers poses a major challenge.

Proposed solution: commission recognized experts in each field to think through these issues
and develop credible (feasible) methodologies that will be able to generate a comparable
measure or index that can be used for descriptive and monitoring purposes, as well as define
what specific type of data should be collected—including legislation, decrees, etc. This effort
would extend to specialized international organizations such as WTO (trade), WTO
(tourism), ILO, OECD, etc. as well as non-governmental organizations and networks with
analytical capacity such as the NBER (US) and CEPR (EU) in high-income countries, and
networks of academics and analysts in developing countries (AERC, LATN, ERF, EERC,

Thus, the objective of this exercise is to both improve quantification of the impact of policies
along the lines of the World Bank overall trade restrictiveness index (OTRI—developed by
Anderson and Neary), but also to identify what the input set should look like; what policies to
focus on, and how to feed information on the existence and enforcement of these policies into
the quantitative methodology. The OTRI approach (see the 2004 Global Monitoring Report)
and similar efforts are needed from an analytical perspective, i.e., let the data tell us how
much policies matter. But it is also necessary to have available simple conceptual indicators
(along frequency or coverage lines) for measures affecting FDI, migration, and services. This
would be valuable for policy makers/researchers who want to understand intuitively what the
effect of a particular measure is likely to be.

2. Data collection
In the light of the results of step 1, templates/questionnaires would be developed which
identify the key measures, laws, instruments on which data is needed. Implementation of
these templates would need to be undertaken on a pilot basis, revisited, and then rolled out for
all countries. Operationalizing this will initially require survey-like techniques, and could be
undertaken initially following the World Bank Doing Business model—targeted, and limited,
surveys undertaken for a large number of countries at one point in time.

Ensuring that this effort result in a durable policy-tracking mechanism will require a different
model, however, unless an organization is found that is willing to replicate the endeavor on
an annual basis. A possibility could be integration into the Article IV consultation framework
of the IMF and/or integration into the WTO’s Trade Policy Review Mechanism—although
the latter is much less frequent.

Given the importance of local information, independence and objectivity, the recurring effort
to regularly update the initial database needs to rely on local expertise—e.g., law firms and
research institutes or networks—that work with a central entity or hub that ensures timely
delivery of data and is responsible for quality control and administration (provision of funds,
due diligence, etc.). This model could be regarded as an extension of the various research
capacity building efforts donors have been supporting—DFID, Netherlands, IDRC, etc.
Critical is that the effort is institutionalized as this is needed for continuity—thus the
commitment and credibility of the “hub” entity is important.

3. Quantification and analysis
Bring 1 and 2 together, and take a first step in identifying patterns, as well as links between
policy and performance using instruments such as the OTRI for trade in goods and analogous
techniques for services trade and migration.

4. Dissemination
The underlying data collected through this effort is a global public good that should be made
available to all researchers free of charge through the web, as well as integrated into existing
databases such as TRAINS/WITS (UNCTAD, ITC, World Bank) and GTAP (Purdue
University). Results of analysis would also be posted, as well as published in journals,
working paper series, etc. New data would be posted for a period of time for comment from
governments and stakeholders before being integrated into the database.

   To what extent could/should such an effort be linked to policy flexibility and related
      suggestions for enhanced transparency/information on policies and impacts?
   To what extent should this be anchored in an existing international agency?
   Should the WTO/OECD model of relying on governments to provide and clear
      publication data be pursued or is this instead something to be avoided to ensure
      independence and avoid possible deadlock?
   Could (part of) this be done on a recurring basis through IMF Art. IV consultations
      and/or the WTO TPRM?
   What should be the periodicity of this effort? The IMF/World Bank Global
      Monitoring exercise is annual—is this appropriate for trade and investment-related
      policies? Structural reform and policy changes related to trade integration take time to
      implement and have longer lead times to impact suggesting a three-year review may
      be adequate.
   If there is agreement that this a good use of an expanded “aid for trade” envelope,
      how should we proceed in determining how to implement and build support for this
      proposal? Should this be a “deliverable” before Hong Kong?


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