Helping developing countries benefit from global and regional trade
Trade has a direct effect on poverty: on average, an increase in trade volumes of 10% will raise incomes by 5%. Countries which miss out on the benefits of global trade miss out on opportunities to profit from international expertise, low cost raw materials and much needed technology.
There are many prospects to open up global and regional trade further to benefit developing countries. At present, Africa accounts for just 3% of global trade. African countries trade, on average, just 10% of their goods with each other, compared to 65% between European countries.
The UK is working to reduce the costs and time taken to trade in developing countries by co-operating with governments and economic communities. For example:
- our new African Free Trade Initiative will provide technical expertise to help deal with issues that continue to hold back economic growth across the region
- our Regional East Africa Integration and TradeMark East Africa programmes aim to reduce the average trade transport costs in East Africa by 5-10% through better border management, and agree common procedures across East African countries for transport and logistics
- in Chirundu, a border between Zambia and Zimbabwe, DFID supported the creation of a ‘one-stop border post’ to speed up customs procedures and cut red tape - as a result, it will take 3 hours instead of 3 days to cross the border
We will argue for EU preference schemes and trade agreements to be reformed in ways that enhance opportunities for trade with developing countries.
The UK will continue to lobby within the G20 countries to allow the Least Developed Countries to export their goods without having to pay duties or comply with quotas. This is estimated to be worth up to $7 billion a year for Least Developed Countries’ exports.