Consultations between
different levels and branches of
government
A trade ministry should not confine its consultations to
other agencies of the executive branch at the national
level. Depending on the constitutional arrangements
within a country, it may also be necessary or advisable
to extend those consultations to the legislative branch
and/or to subnational units of government. This is an
area where it is more difficult to make generalizations,
given the diversity of political cultures, traditions, and
constitutions. Much depends on whether a given
country has a presidential or a parliamentary system,
and on the extent of the authority that is exercised by
smaller units of government.
Coordination between the ministries of finance and
trade is no less important today than it was in the
past. Trade taxes, which may be collected as tariffs
on imports and exports as well as consumption taxes
on imports, still account for a relatively high share of
total government revenue in numerous developing
countries.
No matter what the precise level of fiscal
dependence on trade taxes, it is imperative that trade
policymakers work closely with budget planners
in preparing for all negotiations that may lead to a
reduction in tariffs. As things now stand in some
developing countries, budget planners have no way of
incorporating the projected results of trade negotiations
in their plans, nor of providing useful guidance to trade
negotiators regarding the budgetary consequences of
making proposed deals. If the two ministries do not
coordinate on these matters before and during a trade
negotiation the fiscal consequences of a given tariff
cut might have to be considered on a purely intuitive
basis, and after the fact.
Other ministries that might never have paid the
slightest attention to trade must now be consulted.
This point can be appreciated by considering the
many ways that the interests and authorities of the
ministry of health might now be affected by issues
that are on the table in negotiations or might be raised
in litigation. The country’s medical community is the
natural constituency of this ministry. It is doubtful that
most doctors, dentists, X-ray technicians, hospital
administrators, and others who work in this field think
of themselves as exporters of services, or that they
consider their tasks to be in competition with foreign
providers of these same services; it is equally doubtful
that the officials in the ministry of health will think of the
laws that they administer as being the subject matter
of trade negotiations. And yet that is precisely what
may happen if one of the country’s partners asks that
it make a commitment on trade in medical services.
The ministry of health will also have its own views on
the consequences of extending stricter protection to
patents on pharmaceuticals, the concessions that
might be made on tariffs and regulations affecting the
sale of alcohol and tobacco, and the “portability” of
health insurance across borders. Even if these issues
are not explicitly addressed in a trade agreement, it
is also possible that they will arise later in a disputesettlement case.
A coherent trade policy framework is needed because
of the fact that, upon attaining political independence in
1975, [Papua New Guinea] inherited from the colonial
administration a system of government that did not have
such a framework … The lack of a vision and coherent
trade policy has resulted in the development of ad hoc
and often conflicting rules, regulations and practices
affecting trade, and in an even greater disconnect
between trade policy framework and other key economic
(tariff, investment, industrial), sectoral (manufacturing,
agricultural, forestry, fisheries, minerals) and social policy
issues.
Papua New Guinea Trade Policy Framework (2006)
58 TRADE POLICY FRAMEWORKS FOR DEVELOPING COUNTRIES: A MANUAL OF BEST PRACTICES
It is nonetheless worth observing that countries in all
quarters of the globe now find it necessary to consult
more fully with other branches and levels than they
did in the past. This is due not only to the changing
subject matter of trade, but also to more fundamental
shifts in governance. Democracy is more widespread
in the WTO era than had been the case in the GATT
period: 125 out of 195 countries (64.1 per cent ) were
electoral democracies in 2015, up from 69 out of 167
(41.3 per cent ) in 1989.17 The spread of democracy is
one of the most encouraging developments in recent
history, but in some countries it poses new challenges
for trade policymakers. National and even subnational
legislatures are more involved today in the making of
international economic policy, as are a bewildering
array of participants in civil society. The end result is
that the domestic diplomacy of trade policymaking
can be just as challenging for a trade ministry as are
its dealings with its foreign counterparts. Even some
countries with long democratic traditions are only now
extending greater authority to their legislative branches
in matters of foreign policy in general or trade policy in
particular. That is most clearly evident in the case of the
European Parliament, which under the Lisbon Treaty is
now more powerful vis à vis the European Commission
than in the past. The Inter-Parliamentary Union urges
that legislatures in other countries be equally active in
their scrutiny of international economic negotiations.
Any trade policy framework and strategy should emanate
from the aspirations of the nation and the various
stakeholders as to what kind of society and economy
they want to create.
Trade Policy Framework: Zambia (2016)
Consultations also need to include subnational units of
government in those countries where these institutions
have jurisdiction over issues related to trade. This is an
area where policymaking is often more complex in larger
than in smaller countries, irrespective of their levels of
economic development. Whether the units in question
are called states (as in Brazil, India, Nigeria and the
United States), provinces (as in Canada, China, and
Turkey), or some other title (e.g. departments, länder,
or cantons), subnational divisions may have either
exclusive or shared jurisdiction over matters that have
come to be incorporated within the expanded definition
of trade policy. They can be especially active in the
regulation of such services as banking, insurance, and
education. Government procurement is another topic
over which subnational governments may jealously
seek to retain their autonomy, including the power to
extend preferential treatment to local providers. These
levels of government may also have limited authority in
such topics as sanitary and phytosanitary measures,
technical barriers to trade, and sales taxes. National
governments are well advised to consult fully with their
subnational counterparts on any topics that might
require implementation at their level.
