How to monitor the trade elements of the 2030 Agenda?

9 November 2015

Can existing institutions be used to ensure proper follow-up and review of the trade commitments made in the UN’s new 2030 Agenda for Sustainable Development?

Trade is reflected throughout the new global sustainable development agenda, both in “Transforming Our World: The 2030 Agenda for Sustainable Development,” and in the outcome document from the Third International Financing for Development (FfD3) conference known as the “Addis Ababa Action Agenda.” These outcome documents are intended to guide and balance social, economic, and environmental objectives over the next 15 years. Follow-up and review of the agenda as a whole is essential, although delicate because the Sustainable Development Goals (SDGs) are aspirational objectives, not legally binding obligations. In themselves, the SDGs will not directly change policy, but the review process might. [Ref 1]

Most of the action needed on sustainable development is national and even local. Follow-up and review mechanisms will allow national and local-level policymakers, as well as civil society, to review both effort and outcomes. And by learning from the experience of others, adjustments can be made.  The purpose of review mechanisms is thus not “evaluation” but the sharing of experiences as a way to facilitate learning and policy improvement. The 2030 Agenda is also universal, as the goals and targets apply to all countries, whatever their level of development. Regional and global review as well as national review will help, as countries in different regions or at the same level of development may face similar challenges, and hence have lessons to share.

Trade is part of the 2030 Agenda in each of the three dimensions of sustainable development, but its diffuse contribution means that follow-up and review will be challenging. [Ref 2] Unlike other aspects of the SDGs and FfD3, international trade is covered by numerous bilateral, regional, and multilateral agreements, which have their own review mechanisms. Some trade-related targets in the SDGs are goal specific, others feature trade as a cross-cutting “means of implementation” (MoI) relevant to the achievement of the framework as a whole. For example, SDG 14 on oceans conservation refers to the WTO fisheries subsidies negotiations, while the final SDG 17 identifies the principles upheld by the WTO and conclusion of the Doha Round negotiations as an overarching supportive effort. The FfD3 outcome includes some trade-related targets similar to those identified in the SDGs as well as several other unique trade issues – such as on regional economic integration – that are useful complements.  The SDGs regrettably focus predominantly on expanding exports; while they recognise, if only implicitly, the importance of maintaining an open trade regime that would allow domestic firms access to low-cost inputs, they do not explicitly address the central role that services play in accessing global value chains (GVCs). The SDGs are also limited in devoting insufficient explicit attention to things like trade costs that are important for participation in GVCs, although some of these elements such as trade facilitation and trade finance are part of the FfD3 outcome.

In themselves, the SDGs will not directly change policy, but the review process might.

A universal, rules-based, open, non-discriminatory, and equitable multilateral trading system, as well as meaningful trade liberalisation, in the words of the FfD3 outcome document, can serve as an engine of economic growth, not least by encouraging long-term private and public investment in productive capacities, reduce poverty, and promote sustainable development. With appropriate supporting policies, infrastructure, and an educated work force, according to the AAAA, trade can promote employment, decent work and women’s empowerment, reduce inequality, and contribute to the realisation of the SDGs.

With this context in mind, trade’s contribution to sustainable development ought to be reviewed as part of the broader policy framework. In a longer paper originally published last June, which includes current thinking on possible trade indicators and where the necessary data is already being collected,  the trade-related elements in the draft SDGs and FfD3 outcome were grouped into six clusters: subsidies and commodities trade; access to water, energy, medicines; economic diversification, GVCs, and trade facilitation; illegal extraction and trade in natural resources, trade in hazardous chemicals and waste; multilateral trading system, regional trade, and investment agreements; and policy coherence for sustainable development. The purpose of the rest of this article is to describe where trade-related review and follow-up mechanisms already exist that could help policymakers compare experiences.

Trade policy review at the WTO

Various peer review mechanisms, ranging from multilateral reviews to regional mechanisms that could review groups of UN members, to regional economic integration organisations, offer forums where policymakers could discuss progress against specific trade-related elements of the 2030 Agenda. The WTO provides an obvious starting point for this survey, given its centrality in the system of rules of the global trading system, its transparency and accountability mechanisms will be critical for review and follow-up of the 2030 Agenda.

One way that WTO members could enhance the work the secretariat does for them is by asking it to facilitate an integrated discussion of how those mechanisms could contribute to achieving the trade-related objectives of the SDGs and FfD. Moreover, while many existing WTO processes could contribute to review and follow-up, it might also make sense for the chair of the General Council to write to the chairs of all WTO bodies asking how they intend to internalise the SDGs in their work.

For example, the Committee on Trade and Environment (CTE) could play a key role in the review of trade-related SDGs, given its broad mandate and the fact that it is not linked to any WTO agreement. In recent years, it has discussed the trade-related aspects of illegal logging, fossil fuel subsidies, energy efficiency, carbon footprinting and environmental labeling, to list just a few. It could also monitor negotiations on green goods and services, and it could commission an annual report on the environmental dimension of trade-related SDGs, perhaps based on its database of all environment-related WTO notifications.

The WTO Committee on Regional Trade Agreements (CRTA) could use its Transparency Mechanism to consider a horizontal review of sustainable development chapters in regional trade agreements (RTAs). It could also consider whether trade and investment treaties appropriately safeguard domestic policies for sustainable development. The Committee on Trade and Development (CTD)’s Monitoring Mechanism, which analyses the implementation of all special and differential treatment provisions with a view to facilitating integration of developing and least-developed members into the multilateral trading system, could be another important point of reference. 

The most comprehensive platform for trade related peer review is the WTO Trade Policy Review Body (TPRB) since its analytic reports on individual countries and on the trading system can draw on information from other WTO committees, as well as the work of other international organisations and non-state actors, with regular opportunities for discussion by all members of the WTO. The main work of the TPRB is the discussion of the periodic Trade Policy Review (TPR) reports on every member. The four largest traders are reviewed every two years, the next 16 every four years, and the rest every six years. This schedule could be aligned, if not perfectly, with the every-four-years schedule of national reviews of the SDGs. It ought to be possible to have the reviews for most members precede by no more than a couple of years its national review, ensuring that WTO review of the trade-related aspects of the SDGs does not add to the reporting burden on governments, while allowing the national report to benefit from the results of peer review in the WTO.

The second major task of the TPRB is the annual monitoring report reviewing the trading system, members’ policies, and the work of the WTO itself. Various sections of this flagship report, including “recent economic trends,” “trade and trade-related policy developments,” and “transparency of trade policies” could maintain an eye on SDG-related issues and pull-out the 2030 Agenda aspects of all country reporting made available through the TPR process.

While not subject to discussion, the WTO Annual Report, could be used to identify what the organisation has accomplished in areas relevant to the 2030 Agenda. Finally, given the diffuse nature of potential options for review within the WTO, members could place as a standing item on the agenda of the biennial ministerial conference consideration of a synthesis report on the contribution of trade to achieving the SDGs. Such a broad review is important for a global assessment of progress especially as the UN High-level Political Forum (HLPF) charged with leading that process may not have sufficient time to devote to trade in most years.

Other options for review of trade-related elements

The UN Conference on Trade and Development (UNCTAD) provides another possible multilateral avenue for 2030 Agenda review. In addition to discussion in its Trade and Development Commission, UNCTAD review mechanisms include Investment Policy Reviews, the Voluntary Competition Policy Review, and the Global Commodities Forum. The main advantage of UNCTAD’s existing peer review processes is that these are voluntary, exemplifying national ownership of the process, and imposing a more manageable burden on developing countries’ public resources. Given the breadth of UNCTAD’s membership, it provides a wide range of countries with the opportunity to have their policies reviewed.

At the same time, a wider review role for UNCTAD could be supported by improvements to the organisation’s institutional capacity, and by increasing developed countries’ relatively lower level of engagement its work. The UNCTAD secretariat has already begun to consider how the organisation could play a role in review of governments’ trade and sustainable development policies.

The World Bank could also serve as an important source of data and analysis on the trade-related elements of the 2030 Agenda using its immense data collection and analytical capacity. It could play an important potential part in reviewing investments made by international financial institutions (IFIs), for example in infrastructure, in the context of the framework’s new commitments. It could also play a role in convening national and global experts to develop cross-cutting global reviews of the role of trade in relation to particular objectives. This work could build on the existing system of knowledge platforms within the Bank.

Regional review

The UN Regional Commissions, such as the UN Economic Commission for Europe (UNECE) and Economic Commission for Latin America and the Caribbean (ECLAC) are also currently thinking about their roles in supporting the implementation and review of the 2030 Agenda, and assessing their capacity to undertake this augmented role.

Many regional economic integration bodies such as the Asia-Pacific Economic Cooperation (APEC) group also already conduct peer reviews of members’ trade and trade-related policies, as does the African Peer Review Mechanism (APRM). Like the UN regional commissions, these organisations could potentially provide a good environment for further discussion, among peers at a regional level, of the contribution of trade-related policies to sustainable development. A potential disadvantage of these organisations, however, is that not all of their secretariats have the capacity to support a follow-up and review process.

The regional development banks, in concert with the World Bank, could also play a role in reviewing the trade-related elements of the 2030 Agenda. Data collection, analysis, and peer review may be easier to mobilise at regional level, perhaps following the model of the European Bank for Reconstruction and Development in conducting policy reviews at country level.

In this context we consider the Organisation for Economic Co-operation and Development (OECD) and International Energy Agency (IEA) to be regional bodies since their membership is far from universal. But these two organisations will nonetheless be invaluable in reviewing the progress of their members to achieving the 2030 Agenda. Peer review is deeply embedded in the work of the OECD, drawing on the secretariat’s considerable capacity for data gathering and analysis. For several of the trade-related elements of the SDGs mapped above, in particular the elements related to agriculture, fisheries and fossil fuel subsidies, OECD and IEA data is probably the most reliable available. Review of the coherence between OECD members’ aid and trade policies will be especially important.

The semi-annual, multi-stakeholder Global Aid for Trade Review provides a regular forum for reviewing Aid for Trade flows, while the coherence of aid and trade policies could be reviewed at a regional level in the OECD Development Assistance Committee, or in meetings of the OECD Policy Coherence for Development Focal Points. Members of the OECD may wish, moreover, to create a mechanism for periodic peer review of each member’s national SDG reports.

Bringing it all together

We have mentioned a great many reports and institutions in this article. Our longer paper provides a sketch of the architecture that might support this process. In light of the inevitable complexity and distinct areas of expertise in each trade-related review forum, an additional option could be the creation of an inter-agency “trade and 2030 Agenda” group – perhaps building on the work that several trade organisations undertook as part of the UN Technical Support Team that helped the SDG negotiations – to prepare a synthesis report as needed for the national reviews and an annual synthesis for the regional and global levels. While many UN entities have a trade-related role, the body with the most significant review capacity is the WTO. One option might therefore be to ask the WTO to coordinate such a task force. The aim of such a thematic report on the trade-related elements prepared for the HLPF would be to keep attention on the trade opening “forest” as opposed to all the “trees.” As with all the other reports discussed, it should be a public document, the foundation for an open and participatory process for review and follow-up of the sustainable development agenda.

This paper is adapted from a longer working draft Options for follow-up and review of the trade-related elements of the post-2015 agenda and financing for development published jointly by ICTSD and IISD in June 2015. The longer paper has an extensive list of the work of other scholars and organisations on which we draw. A revised paper based on the final SDG and FfD3 outcomes is forthcoming. [Editor's note, ICTSD is the publisher of Bridges Trade BioRes]

Alice Tipping, Senior Programme Officer, International Centre for Trade and Sustainable Development (ICTSD)

Robert Wolfe, Professor, Queen’s University and Senior Associate, International Institute for Sustainable Development (IISD)

[Ref 1] For further details on the mandated 2030 Agenda review process see paragraph 90 in “Transforming our world: The 2030 Agenda for Sustainable Development.” Draft resolution referred to the United Nations summit for the adoption of the post-2015 development agenda by the General Assembly at its sixty-ninth session. September 2015. (A/70/L.1) For details of the review process prescribed by FfD3 see “Addis Ababa Action Agenda of the Third International Conference on Financing for Development (Addis Ababa Action Agenda).” Draft resolution submitted by the President of the General Assembly. July 2015. (A/69/L.82)

[Ref 2] For more details on the trade outcomes of the 2030 Agenda see “World leaders set to adopt post-2015 sustainable development agenda.” Bridges Trade BioRes. ICTSD. 18 September 2015. 

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