6:51 AM Jul 4, 1994
SOME INCREASE IN THIRD WORLD EXPORTSGeneva 4 July (TWN) -- Imports into the four major industrialized country markets (Canada, EU, Japan and the United States) are likely to rise by about $28.5 billion (1988 dollars) or 4.6 percent of the dutiable imports from the World in 1988, of which imports from the developing world would be about $7.1 billion or 3.1 percent of dutiable imports of 1988, according to UNCTAD This preliminary estimation is provided by UNCTAD secretariat in a report for its Ad Hoc Working Group on Expansion of Trading Opportunities for Developing Countries which began Monday. In an analysis of the tariff cuts under the Round in the markets of the four Quad countries, the report says that given the higher level of pre-Uruguay Round tariffs that faced the developing countries,, the post-Uruguay Round overall trade-weighted averages facing imports from developing countries is higher than those facing imports from all sources. When the GSP rates applicable to developing countries in the four markets are taken into account, trade-weighted tariff averages on imports from developing countries go down significantly, but so do the overall extent of tariff reductions on imports from developing countries. The net result is of post-Uruguay Round trade-weighted tariffs on imports by Canada and the USA from developing countries being higher than on imports from all sources even when the GSP is taken into account. The UNCTAD calculation of the effect on imports from developing countries as a result of the Uruguay Round tariff cuts has been made on a net basis -- taking into account the trade creation and trade diversion effects (because of reduced tariff margins as a result of loss of preferential margins). The trade diversion effect for developing countries is greater in the case of the European Union. In Agriculture, the UNCTAD review suggests that aside from a few cases, the reductions carried by the Quad countries are unlikely to entail any big increases in market access opportunities for agricultural products of developing countries in the immediate future. In Textiles and Clothing, given the nature of the agreement and the autonomy of importing countries in selecting product lines for integration out of the annex in the agreement which contains many product lines not now subject to restrictions, the UNCTAD report says, the importing countries having restraints could use "this inflated volume to avid integrating actually restricted product areas at the earlier stages" and many developing countries would hence not benefit from meaningful trade liberalization in this sector in the near future. In terms of policy options, the report notes that the recent experience of some Far Eastern economies which had achieved rapid expansion of exports, as well as earlier experiences of developed countries, showed that successful export-oriented growth was dependent on a combination of macro-economic policies including exchange rate policies and micro-economic policies including trade and investment policies as also use of selective interventionist policies and measures to influence the direction and level of investment, to increase profitability of exports and provide incentives for accumulating technological capability. These instruments including production subsidy, export subsidy, investment-related measures such as export requirement and domestic-content requirement measures, technology transfer clauses etc would be more difficult in future. In terms of industrial expansion and exports the new rules on subsidies and countervailing measures as well as on anti-dumping would restrict scope for use of subsidies by developing countries. The new rules on subsidies could potentially be a major constraint on a wide menu of policy choices that other countries have used in the past.