How Can Trade Help Africa Achieve the Sustainable Development Goals?
BRIDGES AFRICA
The UN Sustainable Development Goals (SDGs) commit developed and developing countries alike to an ambitious agenda of progress across the full spectrum of development issues. Rightly, there is no trade goal: trade is a means to an end, not an end in itself. But it is recognised as an important “means of implementation,” although subsequent work on targets and indicators has left much to be desired from the perspective of trade economists.
Trade and development: An alternative perspective
The standard argument long put forward by economists linking trade with development runs through the channel of income. Trade openness promotes specialisation by comparative advantage and supports productivity gains at an economy-wide level. To the extent that these gains translate into higher incomes, they provide countries with the necessary means to move forward on other aspects of development, such as health and education.
However, the literature linking trade and income growth is highly controversial. On balance, most trade economists agree that openness is a necessary but not sufficient condition for development gains. Some development specialists in other fields are skeptical even of that claim.
That is why in a new book on trade and the SDGs, Ben Shepherd and I have chosen to focus on the non-income linkages between trade and development.[1] In other words, we look for instances where trade can help reduce the prices and increase the availability of goods or services that are important from a sustainable development perspective. The book brings together a group of leading trade experts to discuss in what ways good trade policy, which supports efficiency in resource allocation, can also be good development policy. As African countries integrate further into the world economy, such an alternative approach to exploring the trade and development nexus is important, as it suggests that in addition to promoting income growth and structural change, trade can also create important development benefits in a range of other areas.