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Non-trade standards

Trade interests of the tsunami affected countries

Trade issues for the tsunami affected countries

Authors: H.J. Lee; K. Logez
Publisher: Organisation for Economic Co-operation and Development , 2005

Full text of document

In the context of suggestions that trade could be a more useful instrument to assist the recovery of affected countries than aid transfers alone, this paper examines the economies of the affected countries and identifies their overall trade interests and market access concerns. In addition, it summarises EU and US trade measures which aim to help the recovery.

The paper highlights that:

  • it can be seen that major OECD countries have imposed relatively high tariffs on agricultural goods, textiles and clothing, and footwear, which constitute goods of particular interest to some of the affected countries
  • however, it is also true that affected countries have benefited from preferential schemes provided by the OECD members
  • according to a simulation undertaken for this study, an additional preferential tariff reduction of 50% for goods exported from the affected countries to five selected OECD markets would bring the former group of countries gains of US$ 7.9 billion altogether
  • the simulation also shows that the exports of Sri Lanka, the Maldives and Bangladesh would rise substantially in most markets, while the affected African countries hardly benefit or even lose, due to erosion of their current preferential benefits

The paper also highlights the following trade measures which the EU and the USA have announced or are considering to help recovery:

  • the EU and the USA have recently finalized revisions of their GSP schemes, which will benefit the affected countries
  • under the new US GSP program, Thailand and Indonesia in particular would enjoy additional duty-free treatment for approximately $500 million worth of their exports to the US markets
  • on 25 April 2005, USITC also announced that it would conduct changed circumstances reviews on the anti-dumping against shrimp imports from Thailand and India, determining by 21 November
  • the EU promised to consider a review of contingency protection measures in effect on goods from the affected countries, with the possibility of suspending them.

While noting that these trade measures will benefit the tsunami-affected countries, this paper concludes that they may have limitations in delivering benefits to the affected people and region.