TRADE AND NEW EVIDENCE POVERTY OF IMPACTS IN …

TRADE AND POVERTY

NEW EVIDENCE OF IMPACTS IN DEVELOPING

REDUCTION: COUNTRIES

JOINT PUBLICATION BY THE WORLD BANK GROUP AND THE

WORLD TRADE ORGANIZATION

Disclaimer

The designations employed in this publication and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the World Bank, its Board of Executive Directors, or the governments they represent, or the World Trade Organization concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. The responsibility for opinions expressed in this publication rests solely with their authors, and publication does not constitute an endorsement by the World Bank or the World Trade Organization of the opinions expressed. Reference to names of firms and commercial products and processes does not imply their endorsement by the World Bank or the World Trade Organization, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval.

This volume is a co-publication of the World Bank and the World Trade Organization.

Attribution--Please cite the work as follows: World Bank Group and World Trade Organization, 2018. Trade and Poverty Reduction: New Evidence of Impacts in Developing Countries. World Trade Organization: Geneva.

Acknowledgements--This publication has been coordinated by Marcus Bartley Johns (WBG), Paul Brenton (WBG), Roberta Piermartini (WTO), Mustapha Sadni Jallab (WTO) and Robert Teh (WTO). The coordinators would like to thank Sandra Rossier for her assistance in the preparation of the publication. The production of the publication was managed by Anthony Martin and Edmundo Murray. Design and layout of the publication were undertaken by Corporate Visions, Inc.

Copyright ? 2018 World Trade Organization

ISBN (paper): 978-92-870-4521-8 ISBN (electronic): 978-92-870-4522-5

Cover images: Bigstock and Flickr World Bank

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TRADE AND POVERTY REDUCTION: NEW EVIDENCE OF IMPACTS IN DEVELOPING COUNTRIES

CONTENTS

3

Foreword

4

Trade and Poverty Reduction: New Evidence of Impacts in Developing Countries: Introduction and Overview

18

Is Tunisian Trade Policy Pro-poor?

36

Gender Welfare Effects of Regional Trade Integration on Households in Ghana

58

Exporting, Importing and Wages in Africa: Evidence from Matched Employer-Employee Data

84

The Poverty Impact of Modernising Dar es Salaam Port

98

Agricultural Logistics in Lagging Regions: Evidence from Uganda

120

Trade Openness and Vulnerability to Poverty in Viet Nam under Doi Moi

148

Glass Barriers: Constraints to Women's Small-Scale, Cross-Border Trade in Cambodia and Lao PDR

174

Are the "Poor" Getting Globalised?

1

TRADE AND POVERTY REDUCTION: NEW EVIDENCE OF IMPACTS IN DEVELOPING COUNTRIES 2

TRADE AND POVERTY REDUCTION: NEW EVIDENCE OF IMPACTS IN DEVELOPING COUNTRIES

Foreword

In 2015, the World Bank and the World Trade Organization published a flagship report on the role of trade in the effort to end poverty by 2030. Over the past three years, the two organizations have collaborated in various ways to advance that goal, from supporting implementation of the WTO Trade Facilitation Agreement; to assisting the poor, including women and small-scale traders, to take advantage of trade opportunities; to supporting trade reforms in the world's poorest countries.

The latest report in this collaboration comes during an uncertain time for global trade. There is a trend away from trade openness, and the unstable trade policy environment has developed into one of the key risks facing the global economy. It is essential that we do not lose sight of the significant implications for the poorest and most vulnerable. Trade is a key driver of global growth and poverty reduction. An open global economy has created opportunities for hundreds of millions of people to lift themselves out of extreme poverty.

This new volume brings together contributions from researchers that detail the challenges and opportunities in maximizing the impact of trade openness for the poor. It shows the need to continue to focus on reducing high trade transaction costs faced by poor workers and consumers in developing countries, and it explains how the benefits of trade can vary between rural and urban families, and between women and men. The papers in this collection also demonstrate the value of different research methods to understand links between trade and poverty, while also highlighting areas for further research and for testing new analytical methods.

The collected analysis has important implications for policies and future research. It highlights how trade openness has clear, positive impacts on poverty reduction. For example, trade can benefit the poor by reducing the price of what they consume and increasing the price of what they sell. As producers, the poor can gain by selling their output in overseas markets where they can get a better return. Trade can also benefit the poor because it allows producers of domestic goods to respond to adverse shocks to domestic supply chains by shifting sourcing abroad. Trade can also help particular groups. For example, one of the case studies in this book finds that exporting firms in Africa tend to pay women workers more than non-trading firms.

For some sectors and groups, however, the research shows serious challenges. One example is lower incomes due to import competition. Another is the risk that various "behind the border" barriers ? like limited competition in transport and distribution, weak infrastructure, or a lack of information on new opportunities ? will negate the benefits of export opportunities or lower-cost imports.

Understanding these issues is essential for designing complementary policy reforms to help maximize the overall positive gains of trade openness for the poor. This requires more policy-relevant research, as well as an effort to address data constraints in areas such as services trade or the impact of non-tariff measures.

With recent World Bank forecasts indicating that the pace of poverty reduction is slowing, there is an urgent need to intensify reforms and increase investments that help the extreme poor. Maximizing the benefits of trade openness for everyone, especially the poorest and most vulnerable, will be critical to driving inclusive, sustainable economic growth and finally ending extreme poverty on the face of the earth.

Jim Yong Kim President World Bank Group

Roberto Azev?do Director-General World Trade Organization

3

The Role of Trade in Ending Poverty

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