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Tariffs' Impact on Developing Economies

The United Arab Emirates submitted a working paper to the Economic and Financial Committee addressing the impact of tariffs as economic weapons on developing economies. The document emphasizes the need for multilateral frameworks to protect vulnerable nations and proposes several initiatives, including the establishment of an observatory to assess tariff impacts, a Trade Shock Stabilization Fund, and enhanced training in trade diplomacy. It also encourages the development of digital trade infrastructure and a non-binding declaration to discourage harmful tariff practices during conflicts.

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6 views2 pages

Tariffs' Impact on Developing Economies

The United Arab Emirates submitted a working paper to the Economic and Financial Committee addressing the impact of tariffs as economic weapons on developing economies. The document emphasizes the need for multilateral frameworks to protect vulnerable nations and proposes several initiatives, including the establishment of an observatory to assess tariff impacts, a Trade Shock Stabilization Fund, and enhanced training in trade diplomacy. It also encourages the development of digital trade infrastructure and a non-binding declaration to discourage harmful tariff practices during conflicts.

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aanshrm
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WORKING PAPER

Submitted by: United Arab Emirates


Committee: Economic and Financial Committee (ECOFIN)
Agenda: Assessing the Use of Tariffs as Economic Weapons and Their Impact on
Developing Economies

Preambulatory Clauses

Acknowledging that global trade systems are increasingly affected by tariff policies shaped
by geopolitical tensions,

Expressing concern over the indirect but severe consequences such tariffs impose on
developing economies—disrupting supply chains, elevating prices, and delaying economic
progress,

Recognizing the limited capacity of vulnerable economies to influence or adapt to sudden


trade policy shifts initiated by larger economic powers,

Reaffirming the importance of inclusive multilateral frameworks that safeguard equitable


trade practices and economic stability for all member states,

Commending ongoing initiatives by nations, including the UAE, to support infrastructure


development, regional connectivity, and resilience among emerging economies through
sovereign and multilateral partnerships,

Operative Clauses

1. Proposes the formation of a UNESCWA-coordinated observatory to regularly


assess the ripple effects of global tariff shifts on low- and middle-income countries,
tracking metrics such as inflation, supply bottlenecks, and development expenditure
shortfalls;
2. Encourages institutionalized consultative mechanisms within the G77, WTO,
and G20, where developing nations can present their vulnerabilities and recommend
safeguards before large-scale tariff actions are taken;
3. Recommends launching a “Trade Shock Stabilization Fund”, supported by
contributions from sovereign funds including those from the UAE, to offer
contingency assistance to countries facing immediate fallout from global tariff
escalations;
4. Advocates the integration of tariff-induced disruption assessments into lending
frameworks of international financial institutions, ensuring that response packages
address both fiscal and trade-related stress;
5. Supports technical training programs in trade diplomacy, led by WTO-accredited
institutions and funded in part by the UAE, to empower developing states in
negotiating and navigating trade uncertainties;
6. Calls for enhanced digital trade infrastructure and cross-border e-commerce
linkages, with investment and logistical facilitation from UAE-based innovation hubs
and free economic zones to reduce over-reliance on traditional tariff-sensitive supply
chains;
7. Invites member states to consider a “Code of Trade Conduct During Conflict”, a
non-binding declaration aimed at discouraging tariff weaponization that harms third-
party developing economies;

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