RESOURCES

LINKING AFRICAN SMALL PRODUCERS TO LARGE DISTRIBUTION NETWORKS: ENHANCING CAPACITY OF MOZAMBICAN PRODUCERS TO SUPPLY THE SOUTH AFRICAN MARKET. United Nations Conference on Trade and Development, February 2008. The export of non-traditional agricultural products from Africa has the potential to contribute to economic growth and poverty reduction. This study is based on interviews with various government departments and agencies, small and large growers, input suppliers, exporters, processors and donor agencies, as well as on a covering of the relevant literature. It gives an overview of the changes taking place in the Mozambican horticulture subsector and how opportunities to trade with the larger markets within South Africa can be exploited. It explores the potential for strengthening exports of horticultural products from one African country, Mozambique, and possible measures in support of this sector. Within this context, the opportunities for small farmers to supply South African importers are evaluated. Meetings with South African supermarkets and importers as well as standards and sanitary and phytosanitary (SPS) bodies were also held to determine constraints facing Mozambican exporters. Some recent reports were also reviewed. The fieldwork and literature review confirmed market opportunities and identified a number of technical issues that constrained farmers in Mozambique, particularly those from the family sector, from being able to supply South African supermarkets. The paper is available online at http://www.unctad.org/en/docs/ditccom200617_en.pdf.

BLUE COLLAR BLUES: IS TRADE TO BLAME FOR US INCOME INEQUALITY? By Robert Z. Lawrence. Peterson Institute, January 2008. International trade accounts for only a small share of growing income inequality and labor-market displacement in the United States. Lawrence deconstructs the gap in real blue-collar wages and labor productivity growth between 1981 and 2006 and estimates how much higher these wages might have been had income growth been distributed proportionately and how much of the gap is due to measurement and technical factors about which little can be done. While increased trade with developing countries may have played some part in causing greater inequality in the 1980s, surprisingly, over the past decade the impact of such trade on inequality has been relatively small. Many imports are no longer produced in the United States, and US goods and services that do compete with imports are not particularly intensive in unskilled labor. Rising income inequality and slow real wage growth since 2000 reflect strong profit growth, much of which may be cyclical, and dramatic income gains for the top 1 percent of wage earners, a development that is more closely related to asset-market performance and technological and institutional innovations rather than conventional trade in goods and services. The minor role of trade, therefore, suggests that any policy that focuses narrowly on trade to deal with wage inequality and job loss is likely to be ineffective. Instead, policymakers should (a) use the tax system to improve income distribution and (b) implement adjustment policies to deal more generally with worker and community dislocation. For more information, please refer to http://bookstore.petersoninstitute.org/book-store/4143.html.

SPILLOVERS ACROSS NAFTA. By Andrew Swiston and Tamim Bayouni. IMF, January 2008. This paper examines linkages across North America by estimating the size of spillovers from the major regions of the world-the United States, euro area, Japan, and the rest of the world-to Canada and Mexico, and decomposing the impact of these spillovers into trade, commodity price, and financial market channels. For Canada, a one percent shock to U.S. real GDP shifts Canadian real GDP by some ¾ of a percentage point in the same direction- with financial spillovers more important than trade in recent decades. Thus, a large proportion of the reduction in Canadian output volatility since the 1980s can be accounted for by the "Great Moderation" in U.S. growth. Before 1996, domestic volatility in Mexico swamped the contribution of external factors to the business cycle. After 1996, the response of Mexican GDP is 1½ times the size of the U.S. shock-"when the U.S. sneezes, Mexico catches a cold". These spillovers are transmitted through both trade and financial channels. The paper is available online at http://www.imf.org/external/pubs/cat/longres.cfm?sk=21535.0.

HOW DOES VIETNAMS ACCESSION TO THE WORLD TRADE ORGANIZATION CHANGE THE SPATIAL INCIDENCE OF POVERTY? By Tomoko Fujii and David Roland-Holst. The World Bank, February 2008. Trade policies can promote aggregate efficiency, but the ensuing structural adjustments generally create both winners and losers. From an incomes perspective, trade liberalisation can raise gross domestic product per capita, but rates of emergence from poverty depend on individual household characteristics of economic participation and asset holding. To fully realize the growth potential of trade, while limiting the risk of rising inequality, policies need to better account for microeconomic heterogeneity. One approach to this is geographic targeting that shifts resources to poor areas. This study combines an integrated microsimulation-computable general equilibrium model with small area estimation to evaluate the spatial incidence of Vietnam's accession to the World Trade Organization. Provincial-level poverty reduction after full liberalization was heterogeneous, ranging from 2.2 percent to 14.3 percent. Full liberalization will benefit the poor on a national basis, but the northwestern area of Vietnam is likely to lag behind. Furthermore, poverty can be shown to increase under comparable scenarios. The paper is available online at http://www-wds.worldbank.org/external/default/main?pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&theSitePK=523679&entityID=000158349_20080219100712&searchMenuPK=64187283&theSitePK=523679