Setting Strategies That Influence Trade Policy

By Kostecki, Michel M. | International Trade Forum, January 1, 2002 | Go to article overview

Setting Strategies That Influence Trade Policy


Kostecki, Michel M., International Trade Forum


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Businesses in developing countries, not just developed ones, have been able to advocate successfully to improve their competitive position in international markets. This article provides real-life examples and a road map to help businesses shape effective advocacy strategies.

Business advocacy in trade policy comprises a range of different activities. The following examples show how a "strategic" effort by companies and industry associations can lead to results affecting international trade:

* The Brazilian Bar's Committee on the General Agreement on Tariffs and Trade was able to influence the Uruguay Round negotiations on trade in legal services by providing intellectual leadership in the debate on the issue and coordinating with other bar associations within MERCOSUR, the South American common market involving Argentina, Brazil, Paraguay and Uruguay.

* A leading international auditing firm significantly contributed to the brainstorming process preceding the liberalization of trade in accountancy and consultancy services as a result of the. Uruguay Round. It also helped fund the work of various private and public bodies worldwide to promote liberalized trade in these services.

* The Ceylon Chamber of Commerce is involved in monitoring trade policy development of interest to Sri Lanka's exporting companies.

* New York-based photo supplies manufacturer gained United States Government support to press for Japan to remove alleged anti-competitive restrictions on film sales, a conflict that reached the WTO dispute settlement body.

* A small cosmetics producer in Jordan was able to obtain reduced import tariffs on its inputs when it complained to the Jordanian High Office dealing with such matters.

* The Canadian Dehydrators Association (CDA), operated by 30 firms that export quality feed products for livestock, obtained lower tariff barriers in several countries in Asia and Africa by arguing that CDA's products were necessary for the local livestock industry that intended to export quality meat. To put the point across, the CDA director regularly visited ministers of the countries concerned to present them with the evidence and arguments. The material was presented on a computer diskette, ready for internal use. The ministries used the research in internal government debates on trade policy reforms. The CDA representative would also give presentations to local livestock producers to mobilize their support for tariff reduction. In the event, several countries unilaterally lowered their import tariffs on CDA exports.

So business advocacy and action to influence trade policy play an important role in most economies - and work. We should not assume that smaller firms are deprived of options to influence the international trade situation. And business advocacy can improve the competitive position of exporters in foreign markets.

The business-government relationship is of particular relevance now that multilateral trade negotiations, decided at Doha in November 2001, are under way. Obviously, business has to play a role in working out trade strategies and government negotiators need to be in permanent contact with business representatives during the whole negotiating process.

Advocacy objectives

Although the activities to achieve them vary, the objectives for advocacy in trade policy of businesses can be classed in the following three categories.

* Improved competitive position in foreign markets. Firms often push for improved access to foreign markets and support regulations that improve their competitive position in those markets (e.g., rules for the protection of intellectual property rights or mutual recognition of standards). Companies can use direct advocacy abroad, as with the case of the Canadian Dehydrators Association, or request government-sponsored efforts.

* "Shelter" Companies often lobby for trade policies that protect them from foreign competitors through tariffs, quotas and other protective measures (such as special privileges and government support). …

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