Launching Ceremony of World Trade Index Report 2008

Opening remarks by Mr. Zhu Xian, Country Director, World Bank

World Bank Dhaka Office, Dhaka

July 14, 2008

 

Distinguished Participants, Ladies and Gentlemen:

It is indeed a privilege for me to speak at the launching ceremony of a very important report on international trade. The report provides an analytically sound data base for understanding the trade policy regimes currently prevailing in different countries of the world. 

 

            As we all know, in this day and age, the question is not whether a country wants to be a part of globalization. More pertinently, the question is how a country can harness the highest possible benefit from participating in global trade by improving her international competitiveness.   Governments need to adapt their trade reform agenda to the changes in their external environment or else they risk falling behind their competitor countries.  Here lies the importance of the current report on World Trade Indicators 2008 that provides a wide range of information on three aspects of international trade: trade policy, institutional environment, and trade performance.

 

It is important that these three aspects of trade are evaluated in intertemporal, cross-sectional, and intra-regional contexts. 

 

i.                     In the intertemporal context, it is important to know whether the trade indicators are time variant, and if so, what their implications are. For example, the overall trade restrictiveness of a country may decline over time but at a lower pace than the competing countries. This would mean that the country’s trade performance has in fact deteriorated as it failed to catch-up with other countries.

 

ii.                   Cross-country context is important for assessing the quality of a country’s trade policies compared to her strategic competitors.

 

iii.                  In the intra-regional context it is important to know how a region is performing compared to other regions or trade blocks, and also how a country is performing compared to her bordering countries within the same region which are her close partners and sometimes also rivals in international trade.  

 

The World Trade Indicators 2008 will be very useful for the policy makers as it provides the data needed for analyzing the trade policy issues in these three contexts.

 

It is well known that trade restrictiveness varies across regions. Despite significant progress made in the last decade and a half, the South Asian region has still the most restrictive tariff policies followed by the Sub-Saharan Africa, Middle East and North Africa. Within the South Asian region, Bangladesh’s trade restrictiveness is among the highest.

 

In addition, South Asian countries, like Bangladesh and India, tend to maintain high level of protection in relation to one another, often more than their level of protection with respect to the rest of the world. Not surprisingly, the interregional trade is less than 2% of GDP in the South Asia region compared to more than 20% for East Asia. I would, therefore, like to urge the policy makers of countries in the region to think about lowering protective barriers against each other as well as the rest of the world.

 

I would also like to draw your attention to another issue. In the discussion of trade policy, most of the time our focus remains limited to trade restrictions on imports. This year, the world has seen a new form of protectionism in response to the global food crisis.  In order to protect their own consumers, food surplus countries have introduced a variety of export restrictions.  This has a very serious implication.  About 147 countries of the world, including Bangladesh, are net food importers and three-fourth of these countries are low income countries.  Restrictions on grain exports have severely aggravated the impact of the global food crisis on the poor in countries that are net grain importers.  There is a global public good problem here that we all must find a way to resolve. 

 

Reduction of trade restrictiveness as well as the improvement of trade transport and logistic services is at the core of appropriate trade policy for Bangladesh in order to thrive the intense global competition the country is currently exposed to.

 

World Trade Indicators 2008 presents the data that can be used as a benchmark to measure country's progress as well as its position with respect to other countries. It provides a sound and consistent basis for informed policy making, including negotiations.

 

Once again I congratulate the authors of this report for their hard work. I would like to thank you all again for participating in this tour of the WTI data base which Mr. Gianni Zanini will next take you through.