Tag Archives: Trade

How Do We Support Corporate Compliance in a Democratizing Global Marketplace?

21718091033_3d900790a4_k

Writing on Medium, CIPE’s acting Executive Director Andrew Wilson asks: with technological change and trade deals making it easier than ever to enter the global marketplace, how can we ensure robust compliance with anti-corruption, labor, environmental, and corporate governance standards?

Read the story on Medium and follow CIPE for more stories like this one.

Boosting Integrity in Global Trade

25933574873_de5f7a99ec_c

2016 OECD Integrity Forum

This post originally appeared on the Corporate Compliance Trends blog.

Mutually beneficial exchange of goods and services is at the heart of David Ricardo’s comparative advantage argument and Adam Smith’s The Wealth of Nations. Over the centuries, such exchange through commerce has connected countries around the globe through a web of economic links and lifted millions out of poverty. In the modern era, international agreements under the World Trade Organization (WTO) have done much to lower tariffs and increase trade. However, in many countries, non-tariff barriers continue to impede growth and development. Lack of integrity in border control and customs administration is one such key barrier.

As estimated by the World Customs Organization (WCO), the loss of revenue among its 180 member countries caused by customs-related corruption is at least USD 2 billion in customs revenue each year. India and Russia alone are losing USD 334 million and USD 223 million, respectively. Beyond monetary losses, lack of integrity in customs also presents big risks for global value chains and security concerns when it comes to criminal activity and illicit trade.

Given this global significance, combatting corruption at the border was an important topic of the 2016 OECD Integrity Forum in Paris conducted under the theme “Fighting the Hidden Tariff: Global Trade without Corruption.” Angel Gurría, Secretary-General of the OECD, made a powerful case for trade with integrity in his opening remarks:

“Integrity is not just a moral issue; it’s also about making our economies more productive, our public sectors more efficient, our societies and our economies more inclusive. It’s about restoring trust, not just trust in government, but trust in public institutions, regulators, banks, and corporations.”

Read More…

Pakistan and Afghanistan Work to “End the Blame Game” and Increase Trade Ties

The Afghan-Pakistan border. (Photo: EPA)

The Afghan-Pakistan border. (Photo: EPA)

Afghanistan, being a landlocked country, depends on its trading route with neighboring Pakistan to get its exports to world markets. However, these two countries have an unstable political relationship.

Due to increase in political instability between the two countries in the last couple of months, Pakistan’s top foreign policy adviser Sartaj Aziz paid a visit to Afghanistan in order to reduce the ongoing friction between the two countries.

The foreign affairs adviser to the prime minister visited the Afghan capital Kabul on September 4 for a regional economic conference and also held meetings with the president, foreign minister and national security adviser.

In his statement on state television about his meeting with Ghani, he said,  “The main thing that the both side agreed upon was to restore trust, end the blame game against each other and create a positive atmosphere.”

Read More…

The Real Problem for Intra-African Trade

Photo: BBC / AFP

Photo: BBC / AFP

This post is continuation of a previous article on regional integration in Africa.

Reducing tariffs is a great start for increasing trade within Africa, but important non-tariff barriers (NTBs) must also be reduced in order to boost trade both within and outside of the continent. In fact, the United Nations Economic Commission for Africa found the costs of NTBs in 2010 were higher than the costs of tariffs. The African Development Bank notes that, “while tariffs have progressively fallen, the key challenge to intra-African trade is non-tariff barriers that stifle the movement of goods, services and people across borders.”

What sort of non-tariff barriers exist in Africa? Infrastructure across the continent is poor, discouraging the movement of goods and people. Less than a quarter of roads are paved, and those are often filled with potholes. It’s not uncommon for airfare with a layover in Europe or Asia to be cheaper than direct intra-continental flights. Meanwhile, seaports are crumbling and rail connection is paltry.

“Thick borders” are also an issue, created by burdensome administrative procedures for clearing goods for import and export. Lines of trucks at the border lead to waits measured in days due to excessive bureaucratic red tape and burdensome administrative procedures. A report by Transparency International (TI) and TradeMark East Africa (TMEA) found that drivers at Rwanda-Tanzania customs stations spent an average of 72 hours obtaining customs clearance. World Bank economist Paul Brenton found that a truck serving supermarkets across a Southern Africa border may need to carry up to 1600 documents to comply with different countries’ requirements for permits, licenses, and other required paperwork.

Read More…

Can Regional Integration Help Africa Reach Its Economic Potential?

Headquarters of the South African Development Community in Gaborone, Botswana. (Photo: Wikimedia Commons)

Headquarters of the South African Development Community in Gaborone, Botswana. (Photo: Wikimedia Commons)

Much of the discussion at last year’s landmark U.S.-Africa Leaders Summit in Washington, DC, focused on transatlantic trade and investment between the U.S. and African countries – for example, the need to renew the African Growth and Opportunity Act, which aims to promote trade with the U.S. by removing tariffs on a number of African exports. Another theme that was prevalent throughout the summit, however, was the need to open up borders, reduce barriers, and increase trade between African nations.

It’s becoming quite common to talk about the rise of Africa and the potential return on investment in a continent often compared, demographically and economically, to countries like China and India. In fact, even developing sub-Saharan Africa is slightly richer than India on a per capita basis, and the continent as a whole has a larger GDP. The economic potential of Africa’s billion people, as both workers and consumers, is only beginning to be tapped.

These statistics are accurate and encouraging, but they can also be slightly misleading. Africa is not a single country, like China or India. It is 54 different countries with 54 different sets of borders and laws creating 54 fragmented, often tiny markets. Doing business in China or India means over a billion people as potential customers or employees. But there is no equivalent “African market.” Investing in Cameroon does not give you much access to Algeria or Zimbabwe, or any country in between. High tariffs, bureaucratic red tape at the borders, and poor infrastructure all make it hard for goods, capital, and workers to move freely through the continent.

Undeniable progress has been made in regards to tariffs, with the establishment of regional trade blocs such as the Southern African Development Community (SADC), Economic Community of West African States (ECOWAS), and the East African Community (EAC). Yet there is still much that needs to be done to unite the continent and also to integrate it with the rest of the world.

Read More…

Reports Show Weak Progress on Economic Reform in Pakistan

The World Economic Forum lists a weak judiciary as one of the issues holding back economic reform in Pakistan. (Photo: Pakistan Today)

The World Economic Forum lists a weakening judiciary as one of the issues holding back economic reform in Pakistan. (Photo: Pakistan Today)

In Pakistan, the process of economic reforms has been painfully slow – a fact underlined by stalled or slipping progress on several international indices. On the World Bank’s 2015 Doing Business, Pakistan fell from 107th out of 185 countries to 128th. The World Economic Forum’s Global Competitiveness Index brought Pakistan down to 129th in 2014-15 from 124th in 2012-13. And the Fraser’s Institute report kept Pakistan at 124th out of 167 countries — the same spot it earned in 2013.

The World Economic Forum published its Global Competitiveness report this week, showing similarly weak progress. Three large South Asia Countries were ranked – India at 55th, Bangladesh at 107th and Pakistan at 126th. As compared to the last report, India jumped 16 places, Bangladesh by 5 and Pakistan slipped by one.

Read More…

Could Armenia Be One of the Biggest Beneficiaries of the Iran Nuclear Deal?

Iran-Armenia border crossing. (Photo: Press TV)

Iran-Armenia border crossing. (Photo: Press TV)

The much-analyzed nuclear deal with Iran to lift international sanctions is, if approved, expected to have a substantial impact on the Iranian economy by enabling the country to increase its oil and gas exports and by creating new possibilities for foreign direct investment (FDI). Many observers hope that the deal will allow for increased interaction with multinational companies and could help build more constructive relations between Iran and the international community.

However, one aspect of the story has not been widely covered: how the nuclear deal could have a massive economic and social impact on the region at large, including Central Asia and South Caucasus. One country which could make considerable gains from the nuclear deal is Armenia, which shares a border with Iran.

Read More…