Trade liberalisation policies are both an integral part of structural
adjustment policy packages designed and implemented by the IMF and
the World Bank, as well as a central component of regional and bilateral
trade agreements between countries in the North and South. Past
trade policy reforms in developing countries aimed at integrating
these economies into the world economy through the promotion of
an export-growth and diversification development strategy, including
growth in industrial capacity and competitiveness. Structural adjustment,
through its trade policy components, thus favoured 'Growth through
Export' policies. In addition to measures that support the export
sector, the trade reform packages typically included the removal
of protection and support for companies producing for the domestic
market, with the intend to remove those that operate inefficiently
and non-competitive and thus divert resources from export production.
To foster export, in many cases quantitative restrictions were lifted,
import tariffs reduced and flexible exchange rate policies were
Similarly, in recent years regional and bilateral free trade agreements
have been promoted by major economies in the North, including the
EU, on the basis of their potential benefits to developing countries.
FTAs generally aim at the reciprocal liberalisation 'across the
board' in line with WTO obligations with the intention to create
market access for a large range of goods. In addition, some FTAs
also include provisions on a range of so-called 'trade-related issues'
such as services, investment, competition, public procurement and
trade facilitation. One of the latest examples of an ambitious trade
agenda are the ongoing negotiations between the EU and the 77 countries
in Africa, the Caribbean and the Pacific (the so-called ACP group)
for new trade agreements. Although these negotiations are taking
place under the overarching Cotonou framework objectives to foster
poverty eradication and promote sustainable development in ACP countries,
they focus heavily on the establishment of new reciprocal free trade
agreements between the ACP and the EU (Weed
et al. 2002).
This collection of evidence sets out to review existing literature
and case studies investigating the impact of trade liberalisation
policies on several sectors and the poorer parts of the population.
The results presented here support the widespread experience that
theoretical welfare claims are often grossly exaggerated and cannot
be substantiated to the full extend. In addition, frequently considerable
costs are associated with trade liberalisation and free trade agreements
in developing countries: Trade liberalisation policies raised both
socio-economic and environmental problems in countries of the South.
The working paper contains a survey of more recent sectorial and
country case studies, both covering the ACP group of states as well
as other developing countries, that were conducted to examine the
effects of trade liberalisation policies on society and the environment.
Most of the ACP country studies cover African countries, since only
few are available both from the Caribbean and the Pacific. Additional
material is reviewed from other developing countries. Studies originate
from a broad variety of sources including the FAO, UNEP, national
research institutions, development and environment NGOs, and the
final report of the 'Structural Adjustment Participatory Review
International Network' exercise.
I. Macroeconomic Effects of Trade Liberalisation
- External Trade
- Manufacturing Sector
- Agricultural Policy
II. Social and Environmental Effects of Trade Liberalisation
- Food Security
III. Abstracts of Sectorial and Country Case Studies
- Sectorial Studies
- Regional and Country Studies in the ACP
- Other Regional and Country Studies
IV. Summary and Policy Recommendations