This document provides an overview of a class on international business and trade. The class rules require students to keep their microphones muted but cameras on, and to use the chat box to greet any visitors. The objective is for students to better understand international business dimensions and opportunities in global markets, with a focus on exports and examples from local and foreign experiences. A video on the role of trade in economic growth and poverty reduction is assigned for students to watch. The document then discusses how open trade policies can promote economic growth for all.

1. WELCOME TO BACC7
International Business and Trade
4:00-5:00PM
Regular Class Conference
Class Rules:
1. Open Cam, Close Mic
2. For concerns, please raise
hands (@zoom) to be
recognized
3. Say your greeting with our
visitors via chat box

2. Stronger Open Trade
Policies Enable
Economic Growth for
All

3. Please Watch the attached video entitled “the
Role of Trade in Supporting Growth and
Reducing Poverty” by World Bank Group

4. OBJECTIVE:
• Generally, the subject aims to provide students with a better
understanding of the dimensions in international business, familiarize
them with the technical aspects in assessing and identifying business
opportunities in the light of increasing competition in world markets,
and appreciation of the implications of globalization to business and
the enterprise particularly small and medium export oriented
enterprises. The emphasis, is on exports, examples are taken from
local and foreign experiences will be used to illustrate and highlight
the areas covered in the topic.

5. “To ensure that trade continues to
provide jobs and benefit the poor, the
world must do more to bring low-income
countries into the global trading system.”
World Bank Group

6. Trade is central to ending global poverty. Countries that are open to
international trade tend to grow faster, innovate, improve productivity
and provide higher income and more opportunities to their people.
Open trade also benefits lower-income households by offering
consumers more affordable goods and services. Integrating with the
world economy through trade and global value chains helps drive
economic growth and reduce poverty—locally and globally. The
WBG’s (World Bank Group) engagements in countries including
Bosnia and Herzegovina, Macedonia, and Indonesia have made trade
across borders easier, made logistics services more reliable, and
streamlined procedures for clearing customs. These projects and
others help create a global trading system that is more open, reliable
and predictable for all.

7. Challenge
• Although globalization and trade present new opportunities, it is
not without challenges. Developing countries may struggle to
compete on a global scale for many reasons.

8. What are the Challenges?
• Inefficient or inadequate systems of transportation, logistics, or
customs;
• Poor connectivity in telecommunications, financial markets or
information technology;
• Complicated regulatory environments that discourage new
investments;
• Anticompetitive behavior by major market players or cartels that
stifle innovation, productivity, or market growth.

9. Scenario
• The increasing complexity of trade has serious implications for
the world’s poor, who often are disproportionately disconnected
from global, regional – or even local – markets. Poverty is often
concentrated in geographic areas that are poorly connected to
active economic centers. Firms and communities in these areas
miss opportunities to develop skilled, competitive workforces;
they are not integrated in global production chains and are less
able to diversify their products and skills.

10. • There are also distributional consequences of increasing trade.
While on aggregate, economies gain enormously from
increasing trade, as competition increases and many good jobs
are created in export sectors—the wages of workers in import-
competing industries may suffer or some workers may lose their
jobs.

11. Approach
• The WBG is supportive of an open, rules-based, predictable
multilateral trading system, with the goal of helping countries
participate in and enjoy the benefits of such a system.

12. Key strategies in this agenda
includes:
• Trade facilitation, logistics, and border management: helping
countries integrate into global value chains (GVCs) through
targeted reforms and investments;
• Trade agreements: advising countries on their technical details
and supporting implementation of commitments made through
these agreements;
• Emphasizing trade and competitiveness at the core of national
development strategies

13. • Aid for Trade: Among multilateral institutions, the Bank Group is
the largest provider of “Aid for Trade,” a multilateral initiative
designed to assist developing countries, especially low-income
countries, spur growth by integrating into the world economy.
• Markets and competition policy: encouraging growth and shared
prosperity by opening and transforming markets.

14. • In 2017, trade volumes grew by 4.3%, the fastest rate in 6
years. Behind increased trade levels are countries whose GDP
is growing, companies who are trading goods across borders
and citizens who can access goods and services at lower
prices. To further enhance global trade, the World Bank works
with governments to address trade obstacles by designing and
implementing policies that maximize competitiveness, increase
connectivity, and facilitate trade. In line with twin goals of
eradicating extreme poverty and increasing shared prosperity,
the World Bank Group helps its client countries improve their
access to developed country markets and enhance their
participation in the world economy.

15. Results
• Trade advisory and support work spans 111 Bank lending
projects in 57 countries, 219 Bank advisory tasks in 64
countries, and 56 IFC Advisory projects in 35 countries
including through the World Bank Trade Facilitation Support
Program (TFSP) and the Umbrella Facility for Trade (UF).
• The WBG’s global, regional, and country trade engagements
have boosted trade competitiveness, inducing predictability in
trade operations, lowering a variety of trade costs, opening and
creating markets, and prioritizing inclusive trade integration.

16. Prominent results from IBRD operations
include: (International Bank for Reconstruction and Development)
• Bosnia and Herzegovina: A Bank operation supported reforms
to facilitate cross-border trade. The project helped simplify
government processes for issuance of export-import licenses,
made it easier to obtain permits, and reduced approval costs.
By closing, the project resulted saved businesses an estimated
$1.26 million in compliance costs, a reduction of approximately
4 percent. The reductions in trade-related administrative costs
helped strengthen the business environment and reduced the
costs of doing business in the country. By reducing trade
barriers for businesses, this project enhanced Bosnia and
Herzegovina’s trade competitiveness and facilitated economic
integration with the neighboring European Union market.

17. • Macedonia: the WBG supported government efforts to improve
the efficiency of trade logistics services (two projects under a
programmatic approach). The operation included measures to
make inspections more efficient to foster cross-border trade and
to support the transport industry to be export-ready by
incentivizing fleet upgrades to comply with EU emission
standards. Results include a 70 percent reduction in physical
border inspections, with reduced transit times for both exports
and imports. Furthermore, the compliance rate of new vehicles
with Eurozone standards was 100 percent.

18. • Indonesia: to support trade facilitation, the WBG leveraged
provisions of development policy lending (DPL) combined with
investment project financing (IPF). The DPL supported work to
implement procedures, customs, and formulation of reduced
and simplified non-tariff barriers. Results include a reduction in
the number of days needed to export and import: between 2009
and 2012, time to export was reduced from 21 to 17 days and
time to import was reduced from 27 to 23 days. The IPF
operation financed investments and technical assistance for the
Directorate General of Customs and Excise to strengthen client
services through improved customs operations and trade
facilitation.

19. Bank Group Contribution
• The Bank is working with governments to tackle trade-related
challenges, with financing commitments by end-2017 totaling
over $22.5 billion ($12.6 billion IBRD and $9.9 billion IDA), up
from just $3.3 billion in 2004.
• The Umbrella Facility for Trade trust fund (UF) was launched in
April 22, 2017. The UF is an IBRD-led Tripartite trust fund that
has been developed to support analytical and knowledge work
on global and regional trade issues in IBRD and IDA countries.
Over the next six years, the UF will support four key areas of
the WBG’s trade work, specifically:

20. • trade competitiveness and diversification;
• trade facilitation and transport logistics;
• support for market access and international trade cooperation;
and
• managing shocks and promoting greater inclusion (e.g. trade
and poverty; trade-gender linkages).

21. • The UF has received contributions from DFID, SECO, Sida, the
Netherlands and Norway. The total envelope over six years is
currently estimated to be US$41 million.
• The Trade Facilitation Support Program (TFSP), which includes
support through an IFC-led Tripartite trust fund, was launched in
June 2014 with support from nine development partners –
Australia, Canada, EU, Norway, Netherlands, Sweden,
Switzerland, UK, USA –totaling US$35 million. The TFSP
provides implementation support for IBRD or IDA countries
seeking assistance in aligning their trade practices with the
World Trade Organization Trade Facilitation Agreement (WTO
TFA), which entered into force in February 2017.

22. Partners
• he World Bank Group works with a wide range of stakeholders,
including donor and client countries, the private sector, CSOs,
multilateral institutions and regional economic communities
among others. Among the partners are trade champions that
are leaders in promoting an open, rules-based international
trading system.
• The private sector is increasingly interested in ensuring that free
trade is protected and helps support business opportunities
including entry and growth for SMEs and MSMEs as well as
participation in global value chains.

23. • Donors contribute to WBG trust funds that support trade and
investment climate. Among them are DFID, Agence Francaise
de Developpement, UNIDO, the Asian Development Bank,
Islamic Development Bank, USAID, JICA, the Gates
Foundation, WTO, OECD, IMF, Switzerland’s State Secretariat
for Economic Affairs, the Swedish International Development
and Cooperation Agency, Australian Aid, European
Commission, Government of Canada, Norwegian Ministry of
Foreign Affairs, UKAID, and the Norwegian Ministry of Foreign
Affairs.

24. • The Umbrella Facility for Trade trust fund has received
contributions from DFID, SECO, Sida, the Netherlands and
Norway.
• The Trade Facilitation Support Program (TFSP), which includes
support through an IFC-led Tripartite trust fund, received
support from nine development partners – Australia, Canada,
EU, Norway, Netherlands, Sweden, Switzerland, UK, USA –
totaling US$35 million.

25. Moving Forward
• Countries are increasingly turning to the World Bank Group for
advice on trade and, more widely, on investment climate reform to
ensure competitiveness. The WBG has an opportunity to contribute
by sharing the technical evidence that helps developing countries
make sound policy decisions on trade and investment climate-
related issues that will be critical for future growth and poverty
reduction. In February 2017, the World Trade Organization’s Trade
Facilitation Agreement entered into force, spearheading a global
effort to reduce trade costs and help countries better connect to the
global economy. This milestone presents an opportunity for the
World Bank Group to further assist countries to design practical
reform strategies – and their implementation – to pursue poverty
reduction and shared prosperity.

26. END OF CHAPTER V