Overseas Development Institute, Project Briefing No 12, May 2008
Trade agreements can alter trade. Trade can have an impact on development. And development can make it possible for countries to reduce poverty. None of these relationships is automatic. The immediate
effects depend on a country’s existing economy
and policies, but the final effects depend on the right changes in policy. This paper will focus on the first link, from trade agreements to trade, but begins by justifying this in terms of the second, from trade to development.
Trade agreements can help countries implement
existing development strategies and create opportunities for more ambitious goals. But in many cases the trade barriers they remove are not the only, or even the principal, obstacle to using trade effectively to promote development. To secure the potential gains from trade for development,
therefore, the response to trade agreements
must be strengthened by complementary measures. Which measures are most useful or easiest to implement depends on the type of agreement, the size of the potential benefits and the conditions in the countries making it.
This paper suggests a framework to identify ways in which a country can translate new trade opportunities into real trade gains, with a particular
focus on Latin America.
Author(s): Sheila Page