By Berta Gomez
Washington File Staff Writer

Washington -- Efforts to expand world trade with developing and transition economies should focus on facilitating lawful commerce within the countries themselves, says U.S. Under Secretary of Commerce for International Trade Grant Aldonas.

In brief opening remarks to a July 16 workshop on capacity building for trade, development and the environment, Aldonas noted that these countries generally have enormous "black and gray" markets that eclipse their formal economies, and cited research showing that in some of them as much as 88 percent of commercial activity is conducted informally.

"This means that trade isn't going to be the answer" to development, he said. "The ability to exchange legally inside an economy is probably more important."

Barriers to internal exchanges often take the form of inadequate -- or non-existent -- laws and institutions to protect commercial interests, he indicated.

There is a "clear need" for rules and legal systems "so that people can lawfully engage in exchange," Aldonas said. "It all boils down to rights and to the premises that underlie a market economy."

The workshop, co-sponsored by the Carnegie Endowment for International Peace and the United Nations Environment Programme, was designed to evaluate capacity-building services for developing and transition countries in advance of the upcoming World Summit on Sustainable Development (WSSD), scheduled for August in Johannesburg, South Africa.

Aldonas said the WSSD would provide an opportunity to build on the growing consensus in favor of trade as a means of spurring development. But he stressed that policy makers should combine discussion of international barriers to trade with analysis of the internal barriers that keep many people outside the formal economy.

"If global trade doesn't speak to the five billion [5,000 million] people who live on less than two dollars a day, then we've lost that opportunity," he said.