Support to Developing Countries in Economic Impact Analysis of Trade Negotiations

Evaluating the impact of international trade agreements has always been an arduous task, requiring specialist skills in economic research and modelling. However, the proclivity of modern trade diplomacy to delve deeply behind national borders into complex issues of domestic regulation and the ever expanding substantive remit of trade agreements greatly enhance the need for informed impact assessment and a refinement of the quantitative and qualitative metrics used to this end. Responding to this need, DFID’s Trade Advocacy Fund has just concluded a Framework Agreement with a consortium of BKP Development (lead firm), DNA Economics, and the World Trade Institute at the University of Bern.

The consortium will provide rapid-response, short term, economic impact analyses of trade agreements being negotiated by Least Developed Countries (LDCs), Low Income Countries (LICs), Lower Middle Income Countries (LMICs) and Regional Economic Communities (RECs). The services provided under the Framework Agreement will broaden the evidence base, inform the negotiating stance of LDCs, LICs, LMICs and RECs’ in trade talks and increase the capacity of developing country trade officials to advocate for agreements which reflect and secure their country’s development, growth and poverty reduction objectives.

Three types of services are covered by the Framework Agreement, all of which focus on economic impact analysis: (i) studies to analyse the anticipated economic impact of trade negotiations in which beneficiaries are engaged; (ii) tailor-made training to negotiators and policy-makers in beneficiary countries/regions on the conduct and use of trade-related economic impact analysis; and (iii) ad-hoc policy advice and support for the utilisation of economic impact analysis for trade negotiations.