VALUE OF TRADE POLICY
FRAMEWORKS
A TPF can help countries meet these needs by
providing a sense of the big picture in which trade
policy forms a part, while also filling in many of the
details of that landscape. The document is intended
to examine the specific circumstances of a country’s
trade and development problems, focusing on both its
challenges and opportunities, and to prioritize the steps
to be taken internationally and domestically in order to
remove the impediments to its full participation in the
trading system. Those domestic steps will typically be
just as important, and often more so, as any deals
reached with the country’s trading partners. While
exporters may still face tariff and non-tariff barriers
for some of its exports to important foreign markets,
they will often find that local constraints — whether
infrastructural, institutional, or societal —
can be the
most significant obstacles to their competitiveness.
A TPF can identify the most important barriers and
inefficiencies at home and abroad, and put forward
plans to address them.
The primary beneficiary of a TPF is the country under
examination, but these reports may also be seen as
detailed case studies in the relationship between trade
and development. Taken as a whole, the body of TPFs
also provide a useful resource for those developing
countries that are not themselves subject to this
exercise. These analyses present information on how
countries in similar circumstances have dealt with their
challenges. By examining both what has worked and
what has not, TPFs can collectively help to identify best
practices for trade and development. This does mean
devising some universally valid trade strategy. Each
country will have its own special mix of history, factor
endowments, geographic position, political culture
and so forth, and it would misguided to attempt to
devise a catch-all set of policy prescriptions that gloss
over those differences. But while all countries may be
said to be special, none of them are entirely unique.
There are important respects in which any one country
will be similar to many others, and the experiences of
their peers — both positive and negative — can offer
useful guidance.
TPFs often point to success stories in other developing
countries, offering models that a country may seek
to emulate. The TPF for Jamaica was informed by
the lessons learned from the tourism strategy of the
Dominican Republic, for example, and the TPF for
Rwanda pointed to the success of Kenya in flower
exports. Similarly, the TPF for Tunisia drew upon
the experience of other countries in advising on the
consequences of signing the Information Technology
Agreement (ITA); this included some countries that
had joined the Agreement (i.e. Costa Rica, India and
Thailand), and others that did not (i.e. Bangladesh and
Kenya).
Beyond those tactical lessons, TPFs can also address
the perennial, strategic issues of trade and development.
For over two centuries, the key question in this debate
has concerned the proper sequence for countries to
follow in the opening of domestic and foreign markets.
At what stage in its development should a country
move to lower or eliminate its barriers to imports and
begin the transition from a State-led to a market-led
economy? To simplify, should a country (1) seek to
retain a large role for the State for as long as possible,
promoting domestic industry while restraining imports
through, inter alia, high tariff barriers,
or (2) should it
open its market and reduce intervention at an early
stage of its economic development, or (3) should it
calibrate its market-opening steps with the pace of its
development, such that it becomes progressively less
interventionist as its economy gains in sophistication,
prosperity, and diversity? There have been proponents
and practitioners of all three positions since the late
eighteenth century, and there is no consensus position
as to which approach has historically best served the
interests of developing countries. The TPFs cannot
resolve that debate once and for all, but they can make
a valuable contribution to it by providing examples of
what has and has not worked in the experiences of
specific developing countries.
