I . Trade barriers as a threat to Sustainable Development Goals

Welcome Letters

My name is Reedznan Samath and I’m happy to be a chair of ECOFIN committee. As a long time participant of MINTMUN, I'm looking forward to this year more than ever. Hoping to see old and new faces who will tackle the problems of the word with an enthusiastic outlook, afterall this is what Model United Nations are all about. As a chair I hope to foster an atmosphere that is both productive and friendly in our committee.

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Council Overview

The Economic and Financial Committee is the second of the six committees of the United Nations General Assembly. It was formed with the rest of the General Assembly when the United Nations was established after the Second World War in 1945. The committee first met in London in January 1946. Since then, the committee meets once every year in October for a 4-5 week session. ECOFIN is open and equal to all 193 member states of the UN.[1] All resolutions passed in ECOFIN are nonbinding, nonetheless hold immense importance in the international community.

ECOFIN used to address issues of financial sustainability and economic cooperation between countries, that’s why it has been one of the most fruitful in terms of tangible results. From general to specific groups of countries, the committee has paid a great attention to the issue of Least Developed Countries and Landlocked Developing Countries. Moreover, discusses variety of International Measures for preventing financial crisis.

The Economic and Financial Committee is responsible for addressing issues related to economic growth and development with specific regard to macroeconomic policy on international trade and external debt sustainability, securing financing for sustainable development, poverty eradication and globalization and interdependence.

I. Trade barriers as a threat to Sustainable Development Goals

Introduction

Trade barriers are government-induced restrictions on international trade. The barriers can take many forms:

ü Tariff. This is the most common form of trade barriers. Tariffs are generally introduced as a restrictive trade measure from particular countries or import reduce of specific types of goods and services.

ü Embargo. This form of trade barrier limits a foreign country’s ability to export or import. Embargo is usually created as a result of unfavorable political or economic circumstances between nations.

ü Quotas. Countries use quotas in international trade to help regulate the volume of trade between them and other countries. Countries sometimes impose them on specific goods to reduce imports and increase domestic production.

ü National standards of importing goods. Licensing of certain imports to protect a domestic industry from foreign competition, etc.

International classification of import-related non-tariff measure, UNCTAD, 2016

Organizations involved

WTO (World Trade Organization) - an intergovernmental organization that regulates international trade.

UNCTAD (United Nations Conference on Trade and Development) - the part of the United Nations Secretariat dealing with trade, investment, and development issues.

G20 (Group of Twenty) - is an international forum for the governments and central bank governors from Argentina, Australia, Brazil, Canada, China, the European Union, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, and the United States.

G7 (Group of Seven) - is a group consisting of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. These countries have the largest advanced economies in the world.

World Bank - is an international financial institution that provides loans to countries of the world for capital projects.

OECD (the Organization for Economic Co-operation and Development) - an intergovernmental economic organization with 36 member countries, founded in 1961 to stimulate economic progress and world trade.

Useful links

· https: //www.wto.org/english/res_e/res_e.htm;

· https: //unctad.org/en/PublicationsLibrary/presspb2015d9_en.pdf;

· http: //sdg.iisd.org/commentary/guest-articles/non-tariff-barriers-can-connect-trade-to-sustainable-development/;

· https: //journals.openedition.org/poldev/2149

· https: //www.tralac.org/images/docs/9568/trade-and-the-sdgs-making-means-of-implementation-a-reality-commonwealth-trade-hot-topics-april-2016.pdf;

· http: //www.tradeforum.org/article/trade-and-the-challenges-of-sustainable-development/;

· https: //www.chathamhouse.org/sites/default/files/public/Research/Energy, %20Environment%20and%20Development/dec05wto.pdf.

· https: //www.ictsd.org/opinion/the-trade-system;

· https: //financialtribune.com/articles/world-economy/68075/protectionist-policies-a-threat-to-development-goals;

· https: //www.un.org/press/en/2017/ecosoc6838.doc.htm;

· https: //www.economicshelp.org/trade2/benefits_free_trade/;

· https: //www.ictsd.org/opinion/removing-trade-barriers-on-clean-energy-technologies-to-advance-the-sdgs

Introduction to LCDs

Least developed countries (LDCs) are low-income countries confronting severe structural impediments to sustainable development. They are highly vulnerable to economic and environmental shocks and have low levels of human assets. There are currently 47 countries on the list of LDCs which is reviewed every three years by the Committee for Development (CDP). LDCs have exclusive access to certain international support measures in particular in the areas of development assistance and trade.

Countries on the list:

Afghanistan

Angola

Bangladesh

Benin

Bhutan

Burkina Faso

Burundi

Cambodia

Central African Republic

Chad

Comoros

Democratic Republic of the Congo

Djibouti

Eritrea

Ethiopia

Gambia

Guinea

Guinea-Bissau

Haiti

Kiribati

Lao People’s Dem. Republic

Lesotho

Liberia

Madagascar

Malawi

Mali

Mauritania

Mozambique

Myanmar

Nepal

Niger

Rwanda

Sao Tome and Principe

Senegal

Sierra Leone

Solomon Islands

Somalia

South Sudan

Sudan

Timor-Leste

Togo

Tuvalu

Uganda

United Republic of Tanzania

Vanuatu

Yemen

Zambia

Background

Any LDCs are in a position to diversify their production and exports and embark on a phase of sustainable development. The international community should support LDCs in this drive. Recommendations are therefore directed at LDCs first, because they are in the driver’s seat.

Investment and private sector engagement across SDG sectors are highly variable across developing countries. The extent to which policy action to increase private sector investment is required therefore differs by country and country grouping. Emerging markets face entirely different conditions to vulnerable economies such as LDCs, LLDCs and small island developing States (SIDS), which are necessarily a focus of the post-2015 SDG agenda.

In LDCs, for instance, ODA remains the largest external capital flow, at $43 billion in 2012 (OECD 2013a), compared to FDI inflows of $28 billion and remittances of $31 billion in 2013. Moreover, a significant proportion of ODA is spent on government budget support and goes directly to SDG sectors like education and health. Given its importance to welfare systems and public services, ODA will continue to have an important role to play in the future ecology of development finance in LDCs and other vulnerable economies; and often it will be indispensable.

Nevertheless, precisely because the SDGs entail a large-scale increase in financing requirements in LDCs and other vulnerable economies (relative to their economic size and financing capacity), policy intervention to boost private investment will also be a priority. It is therefore useful to examine the degree to which private sector investment should be targeted by such policy actions.

Definitions of key terms

Investment – distribution of money in the expectation of some benefit in the future.

ODA ( Official development assistance) - is a term coined by the Development Assistance Committee (DAC) of the Organization for Economic Co-operation and Development(OECD) to measure aid.

FDI ( Foreign direct investment) - an investment made by a firm or individual in one country into business interests located in another country.
DFQF - Duty-free Quota-free.

Possible Solutions

Reduce trade costs: High transactional and transportation costs negatively affect Developing Country and LDC competitiveness. Adoption of trade facilitation measures including full implementation of the WTO Trade Facilitation Agreement will make it possible for smaller enterprises to join international markets and ensure that international trade is truly inclusive and aligned with the SDG principle that no-one should be left behind.

Focus on export diversification and level of processing: Exports from developing countries and LDCs in particular still hinge on raw materials that present high volatility. Diversification remains therefore a high priority. To assist with their diversification efforts developing countries and LDCs will need to continue benefiting from preferential market access conditions and productive capacity building.

Build Supply side capacity and trade related infrastructure through Aid for Trade: The international community needs to continue to mobilize resources for developing countries and LDCs to build supply capacity, strengthen trade-related infrastructure, and add value to exports. This should be done through targeted, focused and predictable Aid for Trade support.

Boosting the services sector: The services sector provide inclusive development potential given their large share in GDP and employment. In fact, this sector is particularly important due to its impact on the integration of developing countries in Global Value Chains especially if they lag behind in the physical infrastructure required for trading in merchandise goods.

Rules of origin and utilization of preference schemes: The specificity, design and application of rules of origin can make it difficult for LDC exporters to benefit from preference schemes. Strict rules of origin (or regional cumulation) were justified on the ground that they help in promoting integrated production structure in the recipient country. Seeking coherence in the rules of origin for both RTAs and preference schemes would help business deal with the complexities of structuring their production to take advantage of market opportunities created by these arrangements.

Committee missions

Our aim is to bring together leaders from governments, donors, international organizations, business and academia to foster trade action in Least Developed Countries (LDCs) and inspire deeper collaborations and commitments in support of further LDC integration into global and regional trade. 2018 is a turning point for LDCs and trade, with a growing trade gap between developed nations and the world’s poorest countries and increasing instability in the world economy. The momentum we generate this year must lead to further integration of LDCs into trade at multiple scales into the future. At the Forum, leaders and practitioners from around the world will share what they have achieved on trade development in LDCs to date, with Aid for Trade complementing national initiatives, and will commit to doing more to ensure LDCs integrate and benefit from global trade. It will culminate in a call to action to leverage trade to combat poverty and inequality and to create a more inclusive trading system.

Useful links

· www.un.org;

· www.un.org/en/ga/second/;

· http: //unbisnet.un.org;

· https: //library/un/org

· http: //unctad.org/en/Pages/DITC/GSP/GSP-Preferential-Market-Access.aspx;

· https: //sustainabledevelopment.un.org/index.php? page=view& type=30022& nr=129& menu=3170;

· https: //www.un.org/ldcportal/new-investment-support-programme-for-the-ldcs/;

· https: //www.wto.org/english/tratop_e/devel_e/teccop_e/eifglobalforum18_e.htm;

· https: //unctad.org/en/PublicationChapters/wir2014ch4_en.pdf;

· https: //unctad.org/en/PublicationsLibrary/ditctab2015d3_en.pdf

[1] http: //www.un.org/en/ga/second/

[2]https: //www.ictsd.org/sites/default/files/research/International%20Trade%20and%20Sustainable%20Development%20Post-2015%20Development%20Agenda%20Briefing%20Series.pdf

[3] https: //www.tralac.org/images/docs/9568/trade-and-the-sdgs-making-means-of-implementation-a-reality-commonwealth-trade-hot-topics-april-2016.pdf

[4]http: //www.un.org/esa/ffd/wp-content/uploads/2016/01/Trade-as-an-engine-for-development_ITC-UNCTAD-WTO_IATF-Issue-brief.pdf