The necessitous state of the ‘Bottom Billion’, as has been denominated in reference to the economically weaker nations by Professor Collier of Oxford University, has become an issue of noteworthy pertinence to both the WTO and the global community.
The Bottom Billion have not seen any significant success in terms of globalization. In this context, climate change brings about further issues. Despite the various formidable obstacles that have been brought about by climate change, there also emerge new trading opportunities which pave the way for further development. The disparaged nations will gain ingress to these emerging avenues.
The complementarity between climate change and the trading issues faced by the landlocked countries has become an issue of noteworthy pertinence, considering the fact that the production of goods emits a significant amount of greenhouse gas, which is also a bi-product of transportation. This also stems from the effort of the manufacturers to sustain in the production business under the agenda of climate change diminution.
As a result of this, charges are imposed on importation cost in order to compensate for the losses suffered in a bid to preserve the climate, thereby affecting trade relations, particularly involving the land locked countries, given their geographically disadvantaged location.
Making equitable utilization of the trading opportunities might prove challenging considering the lack of adequate technology available to the Bottom Billion. Data available with respect to the endowment of trade relations pertaining to expansion and adaptation of environment-friendly technology, along with devising measures in order to make them accessible to the developing nations and at the same time ensuring a sustainable market for these products, requires more research. Identification of possible avenues within the private sectors requires special attention as ownership rights with respect to the latest technologies primarily remain vested with the private companies. Such avenues might include foreign direct investment, agreements concerning royalties and certain other forms of collaborative agreements which would be expedient in the exchange of technology. A higher rate of competition brought about by globalization also contributes to the challenges faced by the Bottom Billion, creating a situation wherein such countries are forced to compete with more advanced developing countries. Exchange of new technologies can be brought about by Bilateral and Multilateral Technical Assistance Programmes, which would thereby ensure new trading opportunities. Both national and international policies should provide equal significance to the ways in which effective ability can be better deployed. One such area of concern is the proficiency in matters of export supply, where expansion and dynamism of the value chain become essential factors. All these factors necessitate a poverty curtailment strategy at the domestic level along with strategies to promote economic expansion. However, this can only be brought about with the help of international assistance to create an environment which encourages value-addition, thereby increasing employment opportunities and assisting in the exchange of technology transfer.
Landlocked developing countries suffer from an additional ‘trap’[1] as they face extremely high transport costs, which acts as a restraint to trade. Their status as developing countries makes them unable to incentivise neighbouring countries to aid them in cutting such costs.
Recently, the Doha Round, which lays down suggestions to facilitate a market for environment-friendly products, has seen a progressive change in the field of trade facilitation, the primary area of focus being the promotion of import of climate-friendly goods. A WTO agreement[2] with respect to the issues faced by landlocked countries will provide the such countries with the necessary help required to overcome the issues associated with the reduction of transportation costs. Since these negotiation agreements are in the nature of a single undertaking, the most feasible option of analysing progress with respect to the promotion of trade and delivering the same to the necessitated states is by coming to a swift conclusion regarding the available data.
Trading aids provided by the WTO and multilateral and bilateral investment treaties, which facilitate the free flow of trade by taking an active role in the deployment of trading finance and ensure an effective pellucid emergency support system, are essential for infrastructural development. This has also facilitated the mobilization of international trading aid towards these countries, thereby leading to an increased level of production.
The underlying interest of the developed countries in investing in bilateral and multilateral treaties is their self-interest, since these treaties provide a useful means of fulfilling their entailment for foreign goods. The arrangement of these investments is primarily vested with the benefit of the foreign investors and the political interest of the concerned developed nations, which is associated with good governance, although the core interest remains per capita financial gain.
Yet another major problem associated with transportation in the landlocked countries is that the concerned countries cannot exercise complete control over the export market. In this regard, the aspect relating to regional areas requires special observance as the implementation process of the projects concerning the North-South zone provides a link among the Eastern and the Southern regions of Africa and four out of these countries are landlocked.
These projects will ensure successful trading from these landlocked countries, not just confined from factories to borders, but also beyond, including transportation to transit nations, thereby ensuring a notable reduction in the transportation cost, which would further promote competition in the market.
These proposed changes, however, do not provide solutions to all the issues which pose drawbacks to trade relations concerning the Bottom Billion. The most significant aspects to be highlighted here are the infrastructure in such countries and the volume of goods that these countries are able to export.
This being said, it is essential to construct a market which would, in terms of location, be closer to such countries as this would help reduce transportation costs, thereby facilitating trade investment. With regard to this, despite the significant escalation that regional trade agreements have undergone, the importance of promoting the liberalization of multilateral markets remains constant.
Whereas on one hand the Doha Development Agenda will be a progressive move towards the promotion of trade, on the other hand, the fortification of the multilateral accord will be a hindrance in the implementation of policy issues not covered within the scope of the concerned negotiation agreements. An increase in disbelief within countries with different economic structures might result in disagreements between nations due to issues which may arise regarding concord at the international level.
Although climate change is an issue of importance in the present context, yet there remain certain other matters which require equal attention such as the the distribution of raw materials and their prices, food, issues pertaining to population growth and most importantly, addressing a way of bringing about concord between regional and multilateral trade agreements.
This post has been authored by Monalisa Sarkar, a Second Year student of the West Bengal National University of Juridical Sciences.
Endnotes:
[1] Paul Collier, The Bottom Billion 103 (2007).
[2] WTO Trade Facilitation Agreement, https://mpoverello.com/2014/12/09/important-implications-of-the-wto-tfa-on-landlocked-countries/.
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