JURISDICTION AND
RESOURCES OF A LEAD
MINISTRY
How should a trade ministry be organized? That
question can be broken down into several smaller
ones, starting with which government agency should
take the lead in this field. These are issues for which
it is difficult to offer a definitive list of universally
best practices, as the differing arrangements that
countries make will vary greatly according to their
constitutional requirements, political traditions and
economic resources. In this section we venture only to
identify the range of distinct experiences, commenting
on the advantages and disadvantages of different
approaches.
1. Which ministry should lead on
trade?
Trade policy is conducted at the busy intersection of
development policy, foreign policy, and fiscal policy,
and it occasionally reaches junctures with other areas
such as social and environmental policy. There are
many different ways that a country might choose
to reconcile the often-competing demands of the
ministries that are tasked with making and executing
policy in these distinct areas.
The most traditional division of labour assigns the
negotiation of trade agreements to the ministry of
foreign affairs, on the rationale that trade policy is
one dimension of foreign policy and the negotiation
of treaties is best left to diplomats. The advantages
of housing this responsibility in the ministry of foreign
affairs include greater coherence between foreign and
economic policy, a lower probability of capture by
domestic interests, and a greater likelihood that the
country will efficiently use its worldwide network of
embassies, missions, and consulates. These outposts
can provide invaluable economic information,
political intelligence, and logistical support for trade
negotiators. This organizational model may also be
attractive to countries that aspire to treat trade as
an instrument of foreign policy,
whether that means
negotiating trade agreements with friendly countries
or directing sanctions at others.
There are also disadvantages to this approach. A
ministry of foreign affairs may place other diplomatic
or security objectives ahead of trade goals in the
hierarchy of objectives. This is precisely why the United
52 TRADE POLICY FRAMEWORKS FOR DEVELOPING COUNTRIES: A MANUAL OF BEST PRACTICES
States Congress removed authority over trade policy
from the State Department in 1962, for example, and
transferred the portfolio to the predecessor agency
to the Office of United States Trade Representative
(USTR). Colombia and Costa Rica are among the
other countries that have adopted similar decisions.
Another problem with housing trade policy in the
foreign ministry is that career diplomats who are
trained to be generalists do not necessarily have the
specialized, technical knowledge required in modern
trade policymaking. When trade negotiations were
mainly about reducing or eliminating tariffs a diplomat
could, with the appropriate instruction, learn the
essentials in fairly short order. The same cannot be said
for today’s more complex issues such as financial and
telecommunications services, investment, intellectual
property rights, and sanitary and phytosanitary
measures, each of which require that policymakers
develop deeper and wider expertise. This problem
has been solved in some countries by integrating
foreign and trade ministries into a single ministry. That
approach is common to certain developed countries
(e.g. in Australia, Canada, and New Zealand) as well
as developing countries (e.g. Brunei, Jamaica, and
Kenya).
In recognition of the potential shortcomings of this
most traditional model, three other variants have been
tried:
• A ministry of trade and industry may take the lead.
This model has the advantage of integrating both
industrial and trade policies into a single framework.
• Trade policy may be the responsibility of the
ministry of economy (sometimes called the ministry
of development), thus acknowledging the link
between modern trade policy and a wider range of
objectives such as the promotion of employment,
diversification, and inclusive growth.
• A third model is cantered on a dedicated trade
institution. Two versions of this approach include the
special case of the United States, where negotiating
is almost all that the USTR does, and the more
typical arrangement in which trade ministries have a
broader set of trade-related responsibilities such as
trade and investment promotion.
Not all trade ministries will fit neatly into one of these
categories.
Some of them bear titles that suggest a
diverse range of responsibilities, such as the Ministry
of Industry, Trade and Labour (Israel) or the Ministry
of Commerce and Supplies (Nepal). The long list of
responsibilities that may be assigned to the trade
ministry can lead to equally lengthy titles, as in the
case of the Ministry of Trade, Investment Promotion,
Private Sector Development and Consumer
Protection (Belize), and the Ministry of Trade, Industry,
Private Sector Development and Presidential Special
Initiatives (Ghana).
Whichever ministry is given the lead, three cardinal
rules should be followed. First, all other ministries
and agencies dealing with the large and expanding
subject matter of trade policy need to be consulted
regularly in any initiative affecting the topics within
their jurisdiction. Second, governments should resist
the temptation to reassign this topic from one agency
to another whenever there is a shift in national policy.
Those changes, even when well intentioned, can
disrupt the work of the officials assigned to deal with
trade. Third, any officials with responsibilities for this
area of public policy — whether they are part of the
lead ministry or in other government agencies —
should be given the tools and training they need to
carry out their assigned tasks correctly and efficiently.
That is the topic to which we now turn
