CMI REPORT
WILL INTERNATIONAL TRADE REDUCE POVERTY
R 2007: 16
plan within the time frame of this study.2 Such a tool may be important for a government in a poor country that wants to take a firm grip on the challenge of how to utilise trade opportunities to foster economic growth and reduce poverty. We suggest therefore that an action plan be prepared as a follow-up to this study. The structure of the report is as follows. Section 2 contains an overview of developing countries’ shares of world trade, the composition of the trade and their trade policies. In section 3, we provide an overview of the most important interlinkages between trade, growth and poverty reduction as discussed in the literature. We differentiate between the short-term and long-term perspectives in order to capture the essential differences between the forces that come into play in the trade liberalisation process. In section 4, we discuss the challenges involved in using aid to reduce trade barriers. Finally, section 5 concludes.
2 We thank NORAD for financial support. The TOR are presented in Appendix 1. This report is a revised version of the background report to NORAD of 11 January 2007 “Trade, growth and poverty reduction: An introduction to the main challenges within trade and development”.
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