Industrial Competitiveness and Trade

Despite the reductions and elimination of tariffs and quotas that are a decisive element in the trade liberalization process, the growth of developing country exports to developed country markets and the associated developmental impact has been limited. The marginalization of developing countries from global trade is a major concern today. The problem arises from two related weaknesses specific to developing countries. The first is the lack of a competitive supply capability of industrial goods to be traded. The second is related to the serious technical problems faced by developing countries in actually accessing international markets. Products have to comply with a myriad of technical standards and health, safety and environmental requirements set by importing countries. These problems are addressed in the two key WTO agreements on technical barriers to trade (TBT) and sanitary and phyto-sanitary measures (SPS).

Developing countries need to comply with the requirements of the TBT and SPS agreements, and must have the ability both to produce according to the standards and technical regulations set by the client countries, and to prove conformity. Furthermore, their products must prevail in highly competitive markets. Standards and conformity procedures often effectively restrict market entry, even in the absence of tariffs and quotas. Developing countries therefore need to ensure that potential exporters have the necessary supply capacity in place, and that they are provided with critical support services (particularly in the area of standards, metrology, testing certification and conformity assessment) to meet the export criteria. In this way, failures in markets and at the level support institutions can be overcome.

The overall objective of this service module is to strengthen the capacity of developing countries to raise their productivity so that they can compete in the global market and benefit from the trade opportunities presented to them under the open rule-based trading system. To this end, the service module pursues two broad categories of interventions:

• Capacity building in the area of standards, metrology, testing and accreditation to overcome TBT/SPS constraints; and
• Enhancing the competitiveness of developing country enterprises through quality and productivity improvements, and supporting the development of mechanisms to assist them in accessing global subcontracting and supply chains and networks.