Aid for Trade

1
Aid for Trade

• Progress on the Initiative in 2007 and Report on
  the Mandate to ECA
• Stephen N. Karingi
• Chief, Trade and International Negotiations
  Section, UNECA

2
Introduction

• An important development-oriented outcome to date
  in the Doha Round process.
• Africas common position of 2006 incorporated in
  the AFT initiative.
• African Ministers of Trade have emphasised that
  for effective operationalisation, Ministers of
  Finance involvement is critical.

3
Why Aid for Trade? Recap

• Africa still lags behind despite recent growth
  rates.
• Africas global integration remains an imperative
  if it is to benefit from opportunities generated
  by globalisation.
• Improved productive capacities, competitiveness,
  low transactions costs, good infrastructure, and
  regional integration are essential for Africas
  global integration.
• Aid for Trade is an important catalyst for
  integration.

4
Why AFT? Its scope respond to Africas challenges

• Constraints to trade policy regulations.
• Trade development business services finance and
  investment.
• Trade related infrastructure e.g. roads
• Building productive capacity for diversification.
• Meeting adjustment costs to trade reforms

5
The ECA mandate

• COM 2007 endorsed the initiative due to the
  relevance of its scope and objectives.
• It viewed it as a critical component within the
  global development partnership.
• COM 2007 mandated ECA (with AUC AfDB) to
  support African governments define new mechanisms
  for utilising AFT.

6
Progress on the AFT in 2007

• Key highlight was the African and Global Reviews
  of the AFT.
• The African Review in Dar-es-Salaam was organised
  by UNECA, ADB, WTO and Government of Tanzania.
• Broad participation.
• 34 African Ministers of Finance and Trade.
• Key donors and international agencies.
• Private sector.
• More than 400 participants.

7
Objectives of the African Review Meeting

• Underline trades central importance to
  achievement of Africa's development goals.
• Identify key priorities for strengthening
  capacity and increasing trade.
• Emphasise the importance of comprehensive trade
  strategies (regional as well as national).
• Highlight the need for increased and effective
  financing and
• Secure political commitment on the way forward.

8
Key issues discussed in African review

• Integration to global economy a central
  objective
• Will generate necessary resources for social
  priorities.
• Small size of national and even sub-regional
  markets make international trade indispensable.
• While indispensable, openness not sufficient
• Stronger supply-side capacities lower trade
  costs improved connectivity to markets needed.
• Internal barriers such as poor infrastructure,
  inefficient customs, unreliable supply chains
  high energy costs impede competitiveness.

9
Key issues discussed in African review (continued)

• Africa needs access to modern infrastructure
  for transport customs and standards testing
  laboratories.
• Regional approaches critical to optimal results.
• Political leadership and commitment the key.
• International community should play supporting
  role

10
Cross cutting themes out of the African Review

• Harness public private partnerships.
• Leverage regional development banks.
• Increase and improve financing.
• Ensure coherence and cooperation.

• Country leadership.
• Focus on regional projects.
• Identify few key priorities.
• Improve trade logistics.
• Mobilize private sector.

11
What it will take for the initiative to succeed
in Africa

• Leadership key to success of the Aid for Trade
  Initiative
• Appropriate delivery mechanism also key to
  success
• Need to focus on priorities identified by
  stakeholders
• For Africa these include
• Effectively dealing with infrastructure
  constraints
• Trade facilitation issues
• Building capacities of Regional Economic
  Communities (RECs)
• Participation and involvement of the private
  sector
• Building effective public/private sector
  partnerships

12
Key recommendations by African countries on next
steps

• Broad-based ownership in understanding and
  implementation of AFT.
• Completion of the mapping out of African trade
  constraints eligible for AFT.
• African AFT action plan.
• African AFT network.
• Development of national and regional plans.
• Progress report in Autumn 2008.

13
2008 Aid for Trade Roadmap

• Objective
• Increase developing countries ownership
• Shift emphasis to monitoring implementation and
• Develop performance indicators and strengthen
  self-evaluation.
• Strategy for 2008 AFT roadmap at three levels
• Global monitoring
• National and sub-regional reviews
• Regional Aid for Trade Networks
• Global Review in 2009
• Report regularly to Committee on Trade and
  Development.

14
ECAs strategy for Aid for Trade in Africa

• In order to advance AFT, there is need to
  identify clear clusters of activities in line
  with the broad priorities from the AFT African
  regional review.
• Success will depend on strength and breadth of
  partnership with other actors in Africa.
• National and sub-regional ownership of
  action-plans and mapping out of priorities
  critical.

15
Clusters of ECA Activities

• Coordination
• Working with WTO, AfDB and AUC the ECA to assist
  in creation of proposed Aid for Trade Network.
• Capacity building for trade
• ECA to help in countries and regional economic
  communities mapping out their priorities and
  develop Aid-for-Trade action plans.
• Monitoring and evaluation
• Together with AfDB and AUC, the ECA to help in
  preparing the Progress Report in 2008 for Africa.