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Elliott was with the Peterson Institute for many years before joining the Center full-time. Her books published there include Can International Labor Standards Improve under Globalization? (with Richard B. Freeman, 2003), Corruption and the Global Economy (1997), Reciprocity and Retaliation in US Trade Policy (with Thomas O. Bayard, 1994), Measuring the Costs of Protection in the United States (with Gary Hufbauer, 1994), and Economic Sanctions Reconsidered (with Gary Hufbauer and Jeffrey Schott, 3rd. ed., 2007). She served on a National Research Council committee on Monitoring International Labor Standards and on the USDA Consultative Group on the Elimination of Child Labor in US Agricultural Imports, and is currently a member of the National Advisory Committee for Labor Provisions in US Free Trade Agreements. Elliott received a Master of Arts degree, with distinction, in security studies and international economics from the Johns Hopkins University, School of Advanced International Studies (1984) and a Bachelor of Arts degree, with honors in political science, from Austin College (1982). In 2004, Austin College named her a Distinguished Alumna.
Earlier this month, evidence emerged that a Nevada woman who died last September had contracted a superbug resistant to all 26 available antibiotics, including colistin, the drug of last resort. If left unchecked, antimicrobial resistance (AMR) could cause up to 10 million deaths a year by 2050 with a cumulative loss of $100 trillion to the global economy. The misuse of antibiotics in human medicine allows bacteria to evolve resistance to many life-saving drugs. But their excessive and inappropriate use in farm animals—which consume 70-80 percent of antibiotics sold in the United States—is another key factor accelerating drug resistance globally.
In a new CGD policy paper, we argue that a global treaty to reduce antibiotic use in animals could help make inroads into that problem. Such a treaty could be modeled on lessons learned from the 1987 Montreal Protocol on Substances that Deplete the Ozone Layer—a milestone in international cooperation often considered one of the most successful global treaties of all time. Researchers project the protocol will prevent over six million deaths from skin cancer in the US alone between 1990 and 2165. We have previously discussed similarities between the AMR threat and the challenge posed by ozone-depleting substances. Here, we outline three core components of a global treaty to curb antimicrobial use in animals:
1. Flexible provisions to reduce use
Governments often use taxes to discourage consumption of ‘global public bads.’ But setting a global tax rate for antimicrobials would be a complex undertaking, and enforcing it in practice would be even more challenging. Instead, we propose setting country-level targets for use, giving countries flexibility about how to meet those targets. As part of national strategies to meet the targets, governments might well decide to tax antibiotic use in animals.
We suggest three complementary approaches for setting targets: banning the use of antimicrobials for growth promotion in livestock; banning or restricting the use of specific drugs that are critically important for human use; and sharply reducing overall use.
The most important consideration in setting targets will be to incorporate flexibility in the treaty structure so they can be revised as more evidence and additional alternatives become available—a key feature in the Montreal Protocol’s success. Flexibility is important given the extent of the knowledge gaps in how, where, and why farmers around the world give antibiotics to their animals, uncertainty around the extent of livestock’s contribution to the overall AMR threat, and specifically how often resistant bacteria from farm animals cause infections in humans.
2. Incentives for countries to participate
Modeled on the Montreal Protocol example, we recommend three ways to incentivize countries, especially low- and middle-income countries, to participate in a global treaty:
Restrictions on meat imports from countries that refuse to join the treaty will encourage universal adoption and help prevent nonparticipants from offsetting progress made elsewhere.
Granting low- and middle-income countries a grace period before they are required to reduce or phase out antibiotics on their farms should lower the costs of implementation.
A fund providing financial and technical support, like the Montreal Protocol’s Multilateral Fund, would help developing countries implement treaty commitments. Support might include advanced market commitments and/or subsidies for vaccines for livestock or agricultural extension programs to help farmers transition to alternatives and improve livestock management practices.
3.Requirements around reporting, monitoring, and enforcement
Directly measuring and monitoring the use of antimicrobials on millions of farms worldwide would be challenging. We propose following the Montreal Protocol model once again and monitoring “apparent consumption”: production plus imports minus exports of antimicrobials for use in agriculture, disaggregated by drug class. To facilitate the ultimate goal of improving data on antimicrobial use on farms worldwide, technical and financial support for developing countries, discussed above, should be used to bolster data collection and surveillance systems. And after initial rounds of support, future assistance could be made conditional on fulfilling basic reporting requirements.
To get the ball rolling, treaty negotiations could begin with the 20 countries that account for 75 percent of global antimicrobial use in animals. Given the urgency of the AMR threat, initial steps toward treaty-making should begin as early as possible.
It is true that the uncertain political climate in the United States (and across much of Europe) could make this a challenging time for international treaty-making. But going back to the Montreal Protocol example, Ronald Reagan signed on to the treaty in 1988 with unanimous Senate approval, marking what he himself described as “a monumental achievement.” As much as protecting the ozone layer prevents millions of US cancer deaths, negotiating a global treaty to help avoid millions of US deaths from drug-resistant microbes is in the clear self-interest of the United States. It would be a proud legacy for any president.
While the misuse of antimicrobials in human health is a key factor accelerating the emergence of drug resistance, we should not overlook the role of agriculture. This paper makes the case for a global treaty to reduce antimicrobial use in livestock.
Uncertainties abound for the United States’ developing country trade partners in the wake of Donald Trump’s election as president. As I chronicled previously, the US presidential campaign featured plenty of tough rhetoric on trade. At the end of the day, I do not expect President-elect Donald Trump to follow through on some of his harshest campaign trail threats. As I explain here, I think it is unlikely that we’ll see new tariffs of 35-45 percent on imports, or fundamental changes in trade agreements like NAFTA. In fact, it is unclear whether the president has the legal authority to deliver on some of Trump’s trade policy promises. In other cases, the economic and political costs would be daunting for the United States itself.
Still, developing countries have reason for concern. Candidate Trump directed most of his trade threats against developing countries, notably China and Mexico. Most other developing countries were not explicit targets, but they are unlikely to escape unscathed if US trade policy turns more protectionist. These countries could be sideswiped by more aggressive implementation of contingent trade remedies. The “escape clause,” for example, permits increased import tariffs if a domestic industry, such as steel, can show injury due to trade. And without congressional action, and presidential support, the Generalized System of Preferences could lapseagain at the end of the year, leaving developing countries facing tariffs on a broad range of goods. There is some good news for Africa, though, in that the African Growth and Opportunity Act was extended for a full ten years in June 2015.
Even if the worst threats remain just that, they create an atmosphere of uncertainty about the future of US trade policy. That ambiguity alone could deter foreign investors and undermine opportunities for economic growth in developing countries. Trump and the economic officials that he has appointed thus far have also expressed a preference for bilateral trade negotiations. But that approach is likely to have limited economic benefits for either party. Larger trade partners will not accept deals that disproportionately benefit the United States. While smaller partners are more vulnerable to asymmetric demands, big “wins” in those cases would have minimal effects on the US economy.
A narrower US focus on bilateral negotiations, to the exclusion of any progress at the World Trade Organization (WTO), could also further weaken that organization as a bulwark against creeping protectionism. The greatest risks would arise if the incoming Trump administration ignores any WTO panel rulings against its trade policies that may emerge. A turn away from the multilateral system would raise costs for US exporters, since other countries could retaliate, but it would leave smaller, poorer developing countries without any protection against bullying and discrimination.
The focus of this year’s Birdsall House Conference on Women was “beyond aid approaches to promoting gender equality.” Arancha Gonzalez, the Executive Director of the International Trade Center (ITC), was there to talk about the role of trade in that quest. Her argument, with which I agree, is that trade negotiators do have a role in promoting gender equality, but it is “not about having trade rules specifically crafted for women [such as rules of origin]… What we want are trade policies that are sensitive to where the women are in your economy” (at about the 5 hour, 10 minute mark of the webcast).
Knowing in which sectors women-owned businesses cluster can help policymakers identify where their offensive and defensive interests lie so that trade negotiations do not disadvantage women. It would also help in designing capacity-building and other programs to ensure that female-owned businesses can take advantage of new trade opportunities. At the CGD conference, and in an earlier speech in Canada, Gonzalez focused on problems arising from smallness, which is a general problem because of the high fixed costs of international trade. But it is a particular problem for women-owned businesses because they are disproportionately small, and not by choice. The ITC niche among international organizations is to help developing countries promote the inclusion of SMEs in international trade, and it puts particular emphasis on women and trade.
For Gonzalez, the recent Chile-Uruguay bilateral trade agreement is the “gold standard” in addressing gender issues—mainly because it is the first trade agreement to do so explicitly and in a separate chapter. I could not find an official English translation and my grad school Spanish is pretty rusty. But from what Gonzalez said about it, and what I could glean from the original text, Chapter 14 on Gender and Trade does not require a whole lot from the parties. Chile and Uruguay reserve the right to set their own policies on gender matters and to finance them subject to their own priorities and budget constraints. The parties also excluded the trade and gender chapter from the dispute settlement provisions that apply to other parts of the trade agreement, and most of the language is hortatory rather than legally binding.
Nevertheless, the chapter underscores the importance of gender equality, and of preventing discrimination on any basis, in ensuring that trade and growth are inclusive and sustainable. It encourages the parties to undertake cooperative activities to promote female participation in their national economies, as well as in international trade. And it creates a Gender Committee to oversee those activities, as well as to promote dialogue and information exchange.
American trade agreements since 2000 have all included chapters aiming to protect worker rights, but nondiscrimination in employment and remuneration was added only in 2007. (See my chapter on labor in this World Bank handbook for the full history.) And that is usually the only reference to gender issues. Though it now looks unlikely to pass anytime soon, if ever, it useful to compare the Chile-Uruguay agreement to the Trans-Pacific Partnership, which President Obama touted as the model for 21st Century trade agreements. The TPP has a separate (3-page) chapter on cooperation and capacity building that mentions gender equality as an example of a possible area of interest, but that is all I could find in a quick text search. There is also a nonbinding chapter on development that briefly mentions women and economic growth. References to women’s rights are even rarer in the most recent EU trade agreement text (with Vietnam).
With trade policy in both the United States and European Union facing a backlash, momentum could well move in a southerly direction. Hopefully the Chile-Uruguay agreement is an example that others will follow to ensure that trade and growth are inclusive, and that women workers and business owners have equal opportunities to benefit.
The American economy is 44 times larger than that of the average country with which it has a free trade agreement. And it is more than 200 times larger than half of them. US trade negotiators have always had the edge in setting the terms of these agreements. As a result, these deals, by and large, reflect US priorities and preferences. Our trade partners sign because—even where not completely balanced—the net benefits are still positive. In fact, to make these trade agreements more fair from an international perspective, in many cases, would require rebalancing in favor of our trading partners, especially smaller developing countries.
But from a domestic standpoint, it is not enough that the overall net benefits are positive. There are losers from trade and the losses for those individuals and their families can be serious and long-lasting. The fact that technology is at least as much to blame as international trade is cold comfort. The argument that trade liberalization is good policy for everyone is premised on some of the gains being used to compensate the losers. For the most part, that hasn’t happened. Americans who have watched the effects on their hometowns as manufacturing has moved overseas, those who have experienced layoffs, and many more who are anxious about the potential future effects of globalization, voted overwhelmingly for Trump. We witnessed a similar backlash against trade and globalization in the United Kingdom during the Brexit referendum.
Still, in all likelihood, trying to renegotiate trade agreements already tilted in favor of the United States would yield little in the way of new gains. Repudiating them would be even worse, raising prices for US consumers and driving US firms that increasingly depend on global supply chains to offshore more of their activities. It is many of Trump’s core supporters who would pay the highest price under that approach.
If President-elect Trump wants to provide meaningful relief to these supporters, he should work with Congress to strengthen the safety net for dislocated workers and pursue active labor market policies that help workers adapt to rapid economic change associated with globalization and new technologies—something I recommended for the next president, eight years ago. And, yes, we need to make sure that China is complying with international trade rules, though we don’t have a free trade agreement with China.
Presidents Barack Obama and Bill Clinton paid lip service to the need to do more for the losers from globalization. But in the face of opposition from congressional Republicans on fiscal and other grounds, they did not push for it. Nor was the business community willing to pay a little more in taxes to help deal with the downsides of trade agreements they strongly supported. President-elect Trump has a unique opportunity to, finally, make US trade policy more inclusive and fair. But he should start by getting our own house in order.
In September 2015, world leaders agreed on a new development agenda, Agenda 2030, that would leave no one behind and that would eliminate extreme poverty and hunger. What are the most effective ways of reach those objectives? Is agriculture still the most effective way to reduce poverty, in a rapidly changing world with a growing demand for food and rapid urbanization in many developing countries? More broadly, what is the role of rural economies – including but beyond agriculture, rural societies, and rural landscapes in turning the agenda into reality?
This post is part of CGD’s work looking at the UK’s role in delivering shared prosperity beyond Brexit. We’ll be looking into further ideas in the coming weeks.
Unless the UK government takes action to prevent it, Brexit could penalize some of the world’s poorest countries. Currently, UN-designated least developed countries (LDCs) receive duty-free, quota-free access to the UK market for virtually all goods under the Everything But Arms (EBA) program. Committing now to provide the same access to LDCs immediately upon Brexit, and to improve it thereafter, would be good for the UK and good for development. This is a practical policy proposal; it’s easy to implement and wouldn’t compromise the UK’s negotiations with the EU or the process of gaining World Trade Organisation approval for the UK’s approach to trading relations as an independent member. Whether the UK will be part of the EU customs union is unclear. Committing now to extend full market access to LDCs will shield them from harm, regardless of the outcome.
How would this work?
Taking the example of footwear: by default imports from outside the EU customs union are subject to a tariff of between 3 and 17 percent. The EU’s Generalised System of Preferences charges lower tariffs on many imports from all developing countries, while the EBA goes to zero tariffs for (virtually) all imports from countries on the UN’s list of LDCs. This means that leather shoes produced in Ethiopia, for example, are subject to a 0 percent tariff. The same shoes produced in the USA would be subject to an 8 percent tariff and therefore be, all else equal, 8 percent more expensive. This gives LDC exporters an advantage over their competitors in other countries, helping them increase exports and create jobs.
Good for development
The EBA scheme provides LDCs’ otherwise disadvantaged exporting industries with a small, much-needed advantage, but it could be even more effective as a development tool. Some countries still struggle to gain EBA access for some goods, because they can’t source enough of the inputs for those goods internally or from other EBA countries to satisfy the scheme’s complex rules of origin. Nontariff barriers resulting from EU regulation, for example of product safety, can be difficult to overcome. Most importantly, LDCs struggle to provide the stable business environment needed to attract investment and suffer from slow, expensive internal transport and other costs.
Still, EBA helps. Some LDCs rely heavily on EBA trading preferences to the UK for their exports. Gambia sends 14 percent and Bangladesh 10 percent of their exports to the UK. If EBA preferences abruptly ceased to apply to those exports, businesses in some of the poorest countries in the world would suffer. Moreover, the UK could expand the benefits to more countries by simplifying the rules for gaining entry and providing more aid for trade to LDCs.
Good for the UK
Reducing tariffs on imports makes goods in the UK cheaper. This is great for people who need a new pair of shoes, but it’s also great for people who need imports of basic commodities or simple manufactured items to produce more complex manufactured items for re-export. Reducing tariffs on imports of goods can hurt domestic firms that compete with imports. However, LDCs are not, by and large, serious competitors for UK producers. Declaring that market access to the UK would continue even in the event of the UK leaving the customs union would also show a commitment to openness and continued leadership in the effort to foster sustainable development around the world. Moreover, providing duty-free, quota-free market access for LDCs would be consistent with WTO rules and would not require negotiation with or approval from other WTO members.
EBA is not enough
Building on EBA-like preferences would help to make the UK a world leader in development-friendly trade policy. The LDC category is unavoidably arbitrary and excludes many very poor, commodity-dependent countries, such as Nigeria, that do not meet the criteria for vulnerability. So, the UK should also look for ways to support countries that are poor, but not on the LDC list. That could be by offering a more generous general preference program, or by expanding the list of countries eligible for duty-free, quota-free market access, as one of us proposed in a CGD working paper. That said, committing to extend this access to LDCs immediately upon Brexit taking effect is a good start. More than that, it’s a win-win, and so supporting the idea is just good common sense.
This post is part of CGD’s work looking at the UK’s role in delivering shared prosperity beyond Brexit. We’ll be looking into further ideas in the coming weeks.
If the UK leaves the EU customs union, it will need new trade policies for poor countries as well as with major trading partners. This post kicks off a discussion of what that policy should look like by assessing which country currently has the best trade-for-development policy in the World. Three main points stand out:
CGD’s ‘Commitment to Development Index’ (CDI) appears to be the only existing systematic attempt to rank countries by how good their trade policies are for development.
New Zealand & Australia rank highest in the 2016 CDI in this area, with the lowest tariffs for all poor countries.
The most useful specific preference schemes for the very least developed countries are the EU “Everything But Arms” scheme and, with caveats, the US “Africa Growth and Opportunity Act.”
Given the Prime Minister’s ambition of the UK being a “global leader on free trade,” this blog post looks at the countries have the best trade for development policy in the world, and the main areas the UK would need to address to achieve that status.
The Commitment to Development Index (CDI) judges countries on 3 criteria:
Tariffs & subsidies for developing countries
Red tape on imports
Restrictions on services
2. The lowest average tariffs for all developing countries
New Zealand ranks best overall on the CDI, primarily because it has the lowest tariffs & domestic agricultural subsidies. All countries have important protectionist weaknesses in their policies—so an independent UK has a golden opportunity to become a “global leader in free trade” for development.
Many developing countries are offered exemptions or reductions in these tariffs, and we return to this below.
Though New Zealand and Australia perform best overall, there are important differences by type of product. Like many others, both have high tariffs on textiles, which has been an important route to industrialisation for many poor countries.
Import tariffs on goods from developing countries
Overall Protection (Tariff Equivalent)
Agricultural Subsidies (Tariff Equivalent)
Total Agricultural Protection (Tariff Equivalent)
Textile and Clothing Tariffs
Source: Roodman, CDI (2013), based on CEPII 2007 data.
3. Red tape: non-tariff barriers & restrictions on services
There are many other important barriers beside tariffs. The CDI makes use of the WB ‘Doing Business’ indicators that measure the cost and time of getting a container through customs. Denmark ranks best: there is no cash cost for border or documentary compliance, and procedures takes less than an hour. The Netherlands rank best on the OECD Services Trade Restrictions Index—providing opportunities for the provision of services by non-nationals.
4. Preferential lower tariffs for the least developed countries
Most rich countries also offer special preferential (duty-free, quota-free) access to specific groups of countries. Perhaps the best of these schemes are the EU scheme for least developed countries (EBA), since it eased its rule of origin a few years ago, and Canada’s scheme.
Summary of Key Preferential Access Programmes for LDCs
Source: Elliott (2015), Trade Preferences for the Least Developed Countries: Opportunities Not Panaceas, & Laird (2012), A Review of Trade Preference Schemes for the World's Poorest Countries.
The EU EBA excludes the fewest products (only arms), has relatively flexible ‘rules of origin’ for supply chain inputs, and is a permanent scheme with no time limit. Canada’s preference scheme excludes a few more agricultural items (everything but chickens, eggs, and cheese), but has more flexible ‘rules of origin’ that allow zero tariffs on products that have substantial imported inputs, so long as those inputs come from other beneficiary developing countries.
The US AGOA scheme also offers coverage for 99 percent of products (with some important exceptions) and liberal rules of origin, and is important due to the size of the US market. The scheme also offers preferences to a different set of countries—providing opportunities for lower-middle income countries in Africa such as Kenya and Ghana that are not LDCs, but at the expense of access for Asian LDCs.
Best trade for development policy
So to sum up, who is the best trading partner for developing countries?
Australia and New Zealand offer the lowest tariffs and agricultural subsidies. Canada and the EU offer generous preferential access for the poorest countries, while the US provides duty-free access for most products from a broader range of poor African countries. Still, all of these approaches have flaws that the UK could improve upon to better drive development and mutually beneficial trade. This analysis also hasn’t considered “aid for trade” (or trade facilitation), which is important for helping low income countries take advantage of market access opportunities.
The Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership, if completed and implemented, will cover a large portion of global trade and investment, but they will exclude the majority of developing countries. American and European negotiators also want these deals to be “gold standard” agreements that establish the new rules of trade for a new century. The biggest concern arising from these mega-regional agreements is that they will undermine the rules-based multilateral trading system.
President Obama delivered his 2014 State of the Union speech Tuesday, January 28. Before the speech, we polled CGD experts to find out what they hoped to hear from from the president's address. Check out their oratorical contributions below and read about the development-related decisions and policies they would like to emerge in support of the rhetoric.
You may not be surprised that development didn’t feature prominently in the president’s speech. However, we were pleased to hear references to inequality, the economic benefits of immigration, climate, and trade, if not necessarily with the development lens offered by CGDers below. We were also thrilled to hear the shout-out to Power Africa (oh, and to Mad Men).
President Obama will deliver his 2014 State of the Union speech Tuesday, January 28. We polled CGD experts to find out what they’re hoping to hear when the president addresses Congress and the nation. Check out their oratorical contributions below and read about the development-related decisions and policies they would like to emerge in support of the rhetoric.
“Last year I called for an end to extreme poverty in the world by 2030. That end is in our sights. But inequality is rising not only here in the United States, but in China and India, in Europe and in Africa. To achieve real progress in tackling this pernicious challenge, we need to put the fight against inequality on our global agenda, as well as our domestic one.”
The president is justifiably concerned with growing inequality and declining social mobility in the United States. In the developing world, inequality remains a serious problem and one increasingly associated with a worrying cycle in which high concentrations of economic wealth corrupt political systems, and in turn feed rent-seeking by privileged insiders. Protests this year in Turkey, and in Brazil and Chile (countries where inequality is falling but remains very high), and the rise of resurgent extreme right parties in Greece and Spain signal citizens' growing frustration with economic policies that seem to sustain rather than fight that cycle— whether intentionally or not. The president can send a critical message, at no cost in budget terms, about American democratic values and commitment to inclusive growth around the world -- simply by referring to inequality as a global political as well as economic challenge. Follow-up should include revisiting the position of the United States on the framing of a post-2015 development agenda, as well as revitalizing support at the upcoming G20 summit for toughening up measures on tax cooperation and reduction of cross-border tax abuses already agreed to by the G-8 last year.
“The US economy was built by the hard work of immigrants and today immigration is more important than ever. But Silicon Valley does not run on engineers alone. It also runs on nannies, janitors, farm workers, and dish washers. Immigration reform that creates safe, legal pathways for low-skill migration will contribute to the recovery and continued sustained growth of our economy, prevent future crises of unauthorized immigration, and foster global development in ways that go beyond traditional aid.”
Over the next decade the US economy will need more than 5 million new low-skill workers for jobs like health aids, nannies, food services workers, and landscapers—jobs that require less than a high-school education, and can’t be off-shored or mechanized. Over this same period, just 1.7 million Americans will enter the labor force, only a small fraction of them without a high school diploma. The country needs a way for economically essential migration to take place legally. Filling those essential jobs is critical for our economic recovery and continued economic growth, because they directly complement higher-skill workers and make all of us more productive. This is why immigration reform that includes a robust temporary low-skill worker program, like the W-Visa program in the immigration bill passed by the Senate last year, is good for the American middle class. Meeting American firms’ demand for these low-skill workers will prevent future flows of unauthorized immigration, and expanding opportunities for temporary work in the US will have development benefits that far out size what traditional aid can offer—and at no fiscal cost to US taxpayers.
“I am calling on Congress to pass legislation that will ensure continued US leadership in the IMF, a vital partner to America’s economic interests. Congressional inaction undermines US interests in an institution that plays a critical role in combatting deeply damaging financial crises globally, helps to ensure a level playing field for US workers and companies around the world, and works with us to root out the financial seeds of terrorism.”
The United States badly needs a win on the international economic stage. In a year when the global community decided to go big in support of IDA, the World Bank’s fund for the poorest, the United States decided instead to go big on the Global Fund to Fight Aids, Tuberculosis, and Malaria. As a result, a substantial chunk of the United States’ NPR-style matching pledge to the Global Fund went unmatched, and the champions of IDA this time around were countries like the UK and China (China!). But nowhere in the international economic sphere is the United States more visibly out of step with the rest of the world than on IMF reform, where the US is singlehandedly holding up a hard-won agreement due to congressional inaction. Just a few months ago, President Obama weighed in personally on behalf of the Global Fund, making a direct appeal to other donors. It’s time for him to put his voice to the need for Congress to act on the IMF.
“American taxpayers deserve to know the government spends their hard-earned money. My Administration has taken steps to make accessing data on government spending faster and easier, but we can do more. I will instruct the Office of Management and Budget to publish the full text of all government contracts and task orders online at USAspending.gov, in a fully searchable database, and to develop new guidelines consistent with the Freedom of Information Act that will provide specific guidance on commercial and national secret exceptions.”
US taxpayers fund government contracts with the private sector that are worth hundreds of billions a year. They have a right to know what they are paying for, and there is plentiful evidence that greater transparency in the contracting process can lead to better outcomes in terms of price and quality. A number of other countries from Colombia to Slovakia to the UK already publish government contracts online. In the United States, you can access government contracts using a Freedom of Information Act request, but it can be a long, painful process and the rules governing what counts as ‘commercial secrets’ within a contract are vague enough that the released, redacted document is sometimes more black marker than text. The US should join a growing global movement towards contracting transparency-–and an Executive Order could make it happen.
“Stopping the loss of tropical forests is one of the most urgent, affordable, and feasible actions the international community can take to avert catastrophic climate change. The United States will provide meaningful rewards to those countries and companies that demonstrate success in reducing deforestation.”
Greenhouse gas emissions from tropical deforestation are our emissions too: forests are being cleared to make way for production of the food, fuel, and fiber that US citizens consume. But there are practical solutions to decouple production from deforestation, including policies being put into place by the governments of forest countries to improve law enforcement and forest management, and commitments from private companies to rid their supply chains of deforestation. The United States should join Norway and Germany in allocating aid funding to reward governments that successfully reduce deforestation with “Cash on Delivery.” As part of its contribution to the Tropical Forest Alliance, the US should ensure that the Lacey Act--designed to prevent the import of illegally-produced forest products-- is fully funded and aggressively implemented, and that federal procurement standards are “greened” to create markets for products certified as deforestation-free.
“We will ensure that our anti-tobacco policies are supported—not subverted—by our trade policies, and strengthened by our investments in aid.”
The United States invests billions each year to address some of the most pressing health challenges around the world, but more can be done to ensure that US policies on international trade back up this commitment to global health. Globally, deaths from tobacco use each year exceed the number of deaths from HIV/AIDs, TB, and malaria combined. At home, the United States has enacted smart policies and made tremendous progress against tobacco-related deaths--efforts that should be ‘exported’ and replicated around the world. Failure to stand up to the big tobacco bullies will make it more difficult for these countries to enforce anti-tobacco policies like package warnings and advertising restrictions, and will undermine the United States standing as a leader in global health. Further, the United States should do more to ensure that organizations like the World Bank and the IMF that have a mandate to modify taxes and subsidies, support countries in increasing tobacco taxes and cutting tobacco subsidies, saving both lives and money.
“We know trade is vitally important to our economy, but it is also a critical tool to reduce global poverty. As the United States continues to make progress negotiating with our trade partners across the Pacific and the Atlantic, we must ensure that these agreements benefit US workers and consumers but do not undermine our efforts to promote development in low-income countries or weaken the multilateral trade system that is so crucial to global prosperity.”
Negotiations across the Pacific and with the European Union will no doubt dominate the US trade agenda this year. The greatest risk for smaller, poorer countries is that these “mega-regional” deals will weaken the World Trade Organization and leave those countries with no refuge from discrimination and bullying by more powerful trader partners. Some poor countries, particularly Bangladesh and Cambodia, could also see their exports fall as a result of more favorable market access granted to competitors that are included in these deals, such as Vietnam.
To guard against the risk of undermining multilateralism, President Obama needs to be equally committed to ensuring that ongoing negotiations and development of a work program at the WTO are successful. In particular, US negotiators should push for a food security package that reduces or eliminates rich country agricultural subsidies, reforms food aid, and develops new rules that give developing countries the tools they need to pursue food security goals without distorting global markets. And, to mitigate the potential for trade diversion, President Obama should work with Congress to reduce barriers to trade with the world's poorest and most vulnerable countries.
“My Administration will work closely with Congress to extend trade legislation with Sub-Saharan Africa, negotiate new investment treaties, and significantly expand our efforts to promote more US investment in this important region, particularly in the power sector. Increasing our engagement will yield benefits to US businesses and put more Americans to work. And I look forward to finding additional opportunities for partnership this coming August, when I will host the first ever US-Africa Summit with leaders from 47 African nations.”
This past week, the White House formally announced that President Obama will host leaders from 47 African nations in early August. The summit agenda will focus heavily on promoting trade and investment ties with the region. These interests reflect the continent’s rapid economic growth over the last decade and widespread improvements in macroeconomic management and governance (despite pockets of instability and ongoing challenges in places like South Sudan and the Central African Republic). In the interim, the Administration and Congress will be considering a number of important programs and policies. First, both branches will be determining whether (and how) to extend the African Growth and Opportunities Act, which provides preferential US market access for qualifying countries. Second, the Administration will continue efforts to conclude bilateral investment treaty negotiations with the East African Community. Third, the Administration will continue implementation of its Power Africa Initiative, which seeks to expand electricity access for 20 million households. A presidential reference to these three efforts will be important for either getting them over the finish line (in the case of AGOA and the US-EAC BIT) or putting pressure for early and concrete results (for the Power Africa Initiative).
Beyond this, the US government should also take further steps to promote greater trade and investment ties with Sub-Saharan Africa, including: (1) unleashing the Overseas Private Investment Corporation; (2) expanding select USAID programs focused on unlocking private capital for development, such as the Development Credit Authority; and (3) announcing a new strategy for improving the impact and coherence of US trade capacity building programs.
Attention presidential transition teams: the Rethinking US Development Policy team at the Center for Global Development strongly urges you to include these three big ideas in your first year budget submission to Congress and pursue these three smart reforms during your first year.
The Syrian regime of Bashar Assad has killed thousands of people since protests began last year. The Arab League, United States and European Union have condemned the violence and imposed strong sanctions against Syria’s oil sector and central bank, but they have not adequately hindered the regime. It’s time to try a new tool that would strengthen existing sanctions: preemptive contract sanctions.
Antoine Bouët, David Laborde Debucquet and Elisa Dienesch
This paper examines the potential benefits and costs of providing duty-free, quota-free market access to the least developed countries (LDCs), and the effects of extending eligibility to other small and poor countries.
Opening markets to trade with poor countries was a key part of the eighth Millennium Development Goal and its global partnership for development. Countries recognized that development is about more than aid and that the poorest countries needed to be more integrated with the global economy to help them create jobs and opportunities for growth. In 2005, the World Trade Organization embraced this goal and developing country members agreed that those of them “in a position to do so” should also open their markets to the least developed countries (LDCs). Since then, most developed countries have removed barriers on at least 98 percent of all goods for LDC exporters, while China and India adopted less expansive programs to improve market access for these countries.