Tear down this wall: non-tariff measures and regional integration: Greater transparency and elimination of barriers hold the promise of deepening economic integration among countries and fostering greater trade, jobs and income growth.

AuthorHamilton, Pamela Coke
PositionGLOBAL VIEW

There has been no more opportune political moment to advance regional integration than the one presented by the current crisis in the multilateral trading system. Rising trade tensions, the backlash against trade in some corners of the developed world and the continuous attack on the multilateral trading system magnify a long-overdue need: establishing better regional integration, especially in the south.

In the current decade, according to UNCTAD data, average intraregional trade in developing countries in Asia reached 53.5% of total trade but only 18.3% for Latin America and the Caribbean and just 14.4% in Africa. This contrasts sharply with intraregional trade in the European Union (EU), which has been as high as 60.7%. This level of integration has allowed the continent to create economic opportunities to foster prosperity and the interconnectedness to preserve peace.

Regional integration should not be understood as a second-best option, nor a choice to pursue when international negotiations get stalled. It is complementary and a legitimate objective on its own. It can help countries achieve what interregional trade has thus far failed to deliver.

TRADE OPPORTUNITIES

For instance, many African countries produce a limited range of goods with exports geared more towards developed countries. The limited intraregional trade in manufactured goods, inputs and services significantly restrict the enabling of African production networks. This in turn hinders structural transformation, limiting the creation of more and better jobs, which is arguably the most effective way to fight poverty.

Increased intraregional trade can give countries the opportunity to export more and to diversify their economies in goods and services with higher value added. It can also be a major catalyst for development, helping countries, particularly the least developed ones, to achieve the United Nations Sustainable Development Goals (SDGs).

Regional integration remains a tangible and unexploited area of opportunity in the south, particularly in Africa and Latin America. Many factors may underlie this reality, ranging from trade tariffs to lack of infrastructure and finance to cumbersome custom procedures, among others. However, an often-overlooked factor is non-tariff measures (NTMs). These are policy measures other than customs tariffs that can have an effect on international trade flows, for example technical specifications required on traded electronic goods to...

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