  De WTO werkt aan een evaluatie van Aid for Trade, een programma dat er voor moet zorgen dat ontwikkelingslanden maximaal kunnen profiteren van verdere liberalisering van de wereldhandel. Het Armerikaans IATP komt met een eigen evaluatie van Aid for Trade, en die is niet mals: Er is nog altijd geen eenduidige definitie van wat Aid for Trade nu precies is. Het is niet duidelijk wie nu precies welk geld gaat ophoesten. Deelnemende organisaties als de OECD, het IMF, de Wereldbank, UNCTAD en UNDP hebben allemaal een ander lijstje met prioriteiten. En ook een fatsoenlijke monitoring en evaluatie ontbreekt.
Om het even kort door de bocht te zeggen: Aid for Trade lijkt niet meer dan een mooie slogan die aan een scala van verschillende ontwikkelingsprojecten wordt opgehangen, maar die verder niet genoeg met elkaar te maken hebben om een consequent programma te maken. Het IATP vindt de gedachte achter Aid for Trade sympathiek, maar denkt dat het noodzakelijk is dat daar ook een consequent beleid uit voortkomt. Afgaande op de evaluatie van de WTO lijken ze in Geneve ook in te zien dat Aid for Trade nog wel wat verbeteringen kan gebruiken. Maar dat kunnen natuurlijk ook holle slogans zijn. Lees hier de volledige tekst van het IATP.
THE HITCHHIKERS GUIDE TO "AID FOR TRADE"
everything you need to know to prepare for the upcoming Global Review
By Carin Smaller, TIP/IATP CONTENTS I. THE STORY SO FAR: reviewing the regions and gathering information II. THE GLOBAL REVIEW: what to expect III. OUTSTANDING ISSUES: definitions, priorities, implementation, monitoring and evaluation IV. PLAYING WITH NUMBERS: how to get more from a shrinking pot? V. A BIG DILEMMA VI. IMPORTANT DATES TO REMEMBER VII. DOCUMENTS I. THE STORY SO FAR: reviewing the regions and gathering information In February 2007, the WTO’s Aid for Trade Taskforce set out a Road Map for 2007 (see link below). The Taskforce is a group comprising developed and developing country WTO members and chaired by Ambassador Mia Horn af Rantzien of Sweden. The main tasks included: to establish an Advisory Group (which reports to Director-General Pascal Lamy); to improve the Organization for Economic Cooperation and Development’s Development Assistance Committee’s (OECD-DAC’s) Global Monitoring of Aid for Trade (the DAC is the principal body through which the OECD deals with co-operation with developing countries); to hold three Regional Reviews, one each in Africa, Latin America, and Asia; and, to conclude the year with a Global Review in Geneva. In March 2007, Pascal Lamy established the Advisory Group which is comprised of the multilateral agencies on trade, finance and development, including the World Bank, the International Monetary Fund (IMF), the OECD, the UN Development Programme (UNDP), the UN Industrial Development Organisation (UNIDO), the International Trade Center (ITC), UNCTAD, and the regional development banks. The Advisory Group’s role is to plan and guide Aid for Trade activities. The WTO’s role is to ensure effective monitoring and evaluation. As a result, the direction of the Aid for Trade Agenda at the global level is now firmly in the hands of the multilateral agencies, particularly the WTO Secretariat, World Bank, IMF, OECD, and the regional banks. WTO members are taking a more back seat role. Donor countries are growing increasingly silent over the question of money to Aid for Trade. Some recipient countries are playing a proactive role, for example Mauritius developed a specific Aid for Trade strategy for which it is seeking funds, and the governments of Peru, Tanzania and the Philippines played active roles at the regional reviews that they hosted. But the majority of developing countries are not playing a role at the global level. At the WTO, developing country delegations are overloaded with the ongoing Doha negotiations. There is insufficient capacity to take on Aid for Trade as well. And yet, part of the reason for bringing Aid for Trade into the WTO, was to enable governments (both the donors and the recipients) to have more say over how aid is distributed. In the future, the Task Force should take steps to ensure more effective and meaningful participation by governments, particularly developing country governments. The OECD-DAC spent the year collecting data on Aid for Trade flows and evaluating donors and recipients. The WTO and OECD-DAC initiated a process to set up a new reporting system which aims to capture all spending on Aid for Trade. The results are impressive. They found, ‘Aid for Trade commitments amounted to $25 billion annually or roughly 40 percent of all ODA.’ [Official Development Assistance]. And this includes only concessional aid, which means that all other multilateral trade-related lending to middle-income countries (virtually all of Latin America, most of Asia and many of the larger economies in Africa!) is not included in the calculations. If it were, Aid for Trade numbers would be far greater. (See link to the report below) The OECD-DAC has also asked donors and recipients to complete a questionnaire on Aid for Trade (see links below). The questionnaires are intended to give a better overview of where Aid for Trade money is being spent, who is giving it and for what projects. The questionnaires are supposed to help the OECD decide which donors are most ready to give Aid for Trade and which recipients are most prepared to receive it. In September and October 2007, the three Regional Reviews were held in Peru, Tanzania and the Philippines. The aim of the reviews was to emphasize the importance of trade to development, to gather and assess Aid for Trade needs and gaps in the region, and to mobilize political and financial commitments to Aid for Trade, with a view to feeding into the Global Aid for Trade Review, to be held in Geneva 20-21 November. The regional meetings were attended by representatives from the WTO, the World Bank, the regional development banks, and trade and finance Ministries. There was some attendance by the private sector and very little attendance by civil society. The main discussions were around identifying needs and gaps in the regions. Participants came to the meeting with their own set of needs for Aid for Trade, and these were discussed in various roundtables, sub-regional working groups and other side events. Pascal Lamy made concluding remarks at each of the regional reviews, including a conclusion on priorities. At the Latin American and Caribbean review he identified assistance for negotiation capacity building, trade facilitation and standards as the priorities. At the African review he identified infrastructure development, trade facilitation, standards and trade finance. No priorities were set at the Asian review. It is unclear what the process was for identifying priorities at the national level or how Pascal Lamy selected the priorities at the conclusion of the reviews. II. THE GLOBAL REVIEW: what to expect? The Global Aid for Trade Review has three main objectives: (1) to gather all the information from 2007 (including current Aid for Trade spending flows, results from the questionnaires, and reports from the regional reviews); (2) to develop a new Road Map towards implementation of Aid for Trade; and (3) to establish better monitoring and evaluation of Aid for Trade, including qualitative assessments. (See link to program below) The Global Review will start with a technical program on 19 November. The agenda includes a discussion on monitoring and evaluation of the quantity and quality of Aid for Trade, followed by a series of workshops on how to mainstream trade into national development strategies, trade facilitation, infrastructure, adjustment costs, trade financing, private sector participation, and regional initiatives. The High-Level segment will take place from 20-21 November with reports from the heads of all the multilateral trade, finance and development agencies on results from 2007 and proposals for the way forward. The OECD will release their report on global trends in Aid for Trade and launch their new WTO-OECD monitoring system. The heads of the regional development banks will report on the regional reviews. WTO Members will be invited to make comments and ask questions. The Global Review will conclude with a General Council debate on Aid to Trade in which WTO members will be invited to debate the findings from the previous day and to provide their feedback on proposed next steps in the Aid for Trade agenda. III. OUTSTANDING ISSUES: definitions, priorities, implementation, monitoring and evaluation DEFINITIONS: The WTO Aid for Trade Taskforce recommended that Aid for Trade cover six broad categories: trade policy and regulations, trade development, trade-related infrastructure, building productive capacity, trade-related adjustment, and other trade-related needs. (See ‘Can Aid Fix Trade’ Assessing the WTO Aid for Trade Agenda,’ below for more information). However, donors and agencies continue to use different definitions of what counts as Aid for Trade. This makes it difficult to assess whether pledges of Aid for Trade have been realized and to monitor what spending is included under Aid for Trade. The EU pledges, for example, are limited to trade policy and regulations, and trade development. The U.S. and Japan include trade facilitation and infrastructure as well. The existing WTO/OECD-DAC database only includes trade policy and regulation, trade development, and some kinds of investment in productive capacity. The World Bank does not include investments that improve productivity and it records only that portion of a project that is trade-related (see study below). The new WTO/OECD reporting system plans to cover the whole Aid for Trade Agenda as recommended by the Taskforce but this will remain a challenge given the different definitions used by the major donors. PRIORITIES: The priorities identified by the WTO Director-General, Pascal Lamy, at the regional reviews are strongly in line with the WTO’s Agenda, particular with regard to trade facilitation. The priorities are somewhat different to the priorities articulated by governments as members of the LDC, African and ACP Groups at the WTO’s Committee on Trade and Development (with the exception of infrastructure, which is a priority for all concerned). The LDCs say Aid for Trade should focus on enhancing ‘competitiveness, diversifying agricultural, industrial and services capabilities, improving infrastructure and strengthening supply-side capacity.’(1) The African Group says Aid for Trade should primarily target supply-side constraints and also include funding for adjustment costs, implementation and negotiation capacity building.(2) The ACP Group says Aid for Trade must provide support for trade-related economic adjustments, technical assistance and enhancing supply-side capacity.(3) These governments identify adjustment costs as those relating to preference erosion, the end of the textiles and clothing quotas, loss of tariff revenues, rising food prices, export earnings shortfalls and social costs (including loss of jobs). The priorities identified at the regional reviews differ from the policy advice given by UNCTAD. For instance, the 2006 LDC Report states: ‘There is a need for a paradigm shift which places the development of productive capacities at the heart of national and international policies to promote development and poverty reduction in the LDCs.’(4) It is unclear how the priorities identified by Pascal Lamy were agreed to, who decided them and what they will be used for. This may become more apparent at the Global Review. Whatever is decided, it is essential to establish a transparent and meaningful process for identifying priorities (whether they be national, regional or international). For aid to have any chance of success, priorities should be set by recipient countries through a broad and effective consultation with all affected stakeholders and relevant Ministries. Without this, the argument of country-ownership is nothing more than a mere rhetoric. IMPLEMENTATION: There is still no clarity about how Aid for Trade will work in practice. The WTO has made it clear that no new mechanisms will be established and that the WTO does not intend to become an aid agency. And yet countries are already being asked to develop Aid for Trade strategies as part of their national development strategies, to set up national Aid for Trade Committees and to participate in the regional and global reviews. If Aid for Trade is going to offer anything additional to existing schemes and initiatives, there needs to be a clearer understanding of what additional elements are needed, how the programs are going to work, who is going to be in charge, where the money is coming from and how it can be accessed. MONITORING AND EVALUATION: There is also no clarity about how the monitoring and evaluation mechanisms will work. The joint WTO-OECD reporting system which monitors Aid for Trade flows is a good start towards better understanding how much money is being spent and on what programs. The questionnaires are more dubious. It is not clear if or how the OECD plans to use the results to inform future aid spending. In ‘Aid for Trade: twenty lessons from existing aid schemes,’ trade analysts Marti and Rampa argue that given the large amounts of money being spent on Aid for Trade initiatives, they should be ‘subject to regular evaluation and improvement through formal monitoring and review processes.’ The authors propose a strong monitoring function with a set of performance indicators that would be jointly identified by recipients and donors. (See link below) IV. PLAYING WITH NUMBERS: how to get more from a shrinking pot? When Aid for Trade was launched, WTO members asked the Director-General to find appropriate mechanisms to securing additional financial resources for Aid for Trade. Funding is not yet secured. It puts the whole Aid for Trade agenda into question. A number of developing countries, particularly the LDCs, the African Group and the African, Caribbean and Pacific (ACP) Group, understood that ‘additional’ meant new money over and above the levels of ODA that have been projected and pledged for 2010. It is now confirmed that there will be no additional money over and above existing ODA pledges but rather that the Director-General should seek to get a bigger share of ODA for trade. This means that the Aid for Trade agenda is nothing more than the reshuffling of existing funds from other development sectors to funding trade-related infrastructures and activities. More worrying, if the WTO Director-General is able to convince donors to put additional money to Aid for Trade, there is a real risk that other sectors, like health and education, may find they receive a much smaller share of the pie in the future. Pledges to increase Aid for Trade were made at the Hong Kong WTO Ministerial Conference and the G8 Summits in Gleneagles (in 2005) and St. Petersburg (in 2006). In Hong Kong, Japan pledged US$10 billion over three years, the U.S. pledged US$2.7 billion a year by 2010, and the EU pledged ‘2 billion (US$2.6 billion) a year by 2010’.(5) In St. Petersburg, G8 leaders said they expected spending on Aid for Trade to increase to a total of US$4 billion a year.(6) But the WTO/OECD reporting system currently puts Aid for Trade spending at US$25 billion per year (40 percent of all ODA). So the US$4 billion pledge made at the G8 summit is not going to go very far. Furthermore, the G8 pledges are not being honored, and overall ODA levels fell in 2006. V. A BIG DILEMMA Two years have gone by since Aid for Trade was launched; the picture does not look good. There is still no clearly accepted definition, no guidelines for accessing funds, a questionable list of priorities, no effective monitoring and evaluating mechanisms, and no additional money. Worse, the WTO/OECD information-gathering exercise shows that there is an enormous amount of money already going into trade-related assistance. More than half of the money, US$13.8 billion, is being spent on LDCs and other low-income countries. The rest, US$10.8 billion, is being spent on middle-income countries. There is little to show for the investment. There are insurmountable problems associated with the design and operation of aid mechanisms. A June 2006 report from the Integrated Framework Task Force found significant shortcomings in Aid for Trade programs, including a lack of financial and human resources, low levels of implementation, disjointed governance structures, inadequate donor responses and very weak country ownership.(7) Evaluations of other trade-related assistance highlighted serious weaknesses including unsystematic or incomplete needs assessments; weak project management; fragmented technical assistance interventions with insufficient linkages to broader development programs; and weak linkages to poverty reduction.(8) Despite the range of programs, many developing countries and particularly LDCs have not had the help they need. Existing programs fail to address some of the most urgent challenges facing developing countries, especially those related to development objectives, including the need to increase productivity in their agriculture, manufacturing and services sectors and to increase employment. So why did the WTO get involved? What does the WTO hope to accomplish? Aid for Trade was meant to be a complement to the Doha Agenda. The WTO had hoped that it might help provide the finances that developing country members need to implement their WTO commitments (both existing and future). If the Doha Agenda is ever concluded, there will be significant costs, including those associated with the implementation of Trade Facilitation and from the huge losses in tariff revenues. But paying for the costs of further trade liberalization is not how Aid for Trade was envisaged when it was launched in 2005. And much of the recent research and policy advice coming from the FAO, UNCTAD, and even the World Bank, is raising questions about the benefits of trade liberalization to low-income countries and instead emphasizing the importance of using an array of policy measures to help develop productive sectors, address supply-side constraints, and increase employment. Going ahead with the Aid for Trade agenda in the current climate would be disastrous. For now, donors and recipients should invest their energy in improving the effectiveness of existing aid schemes. WTO members should get back to the task of creating a better multilateral trading system. The latest framework offer for new trade rules put forward by the Chairs of the agriculture and industrial goods (also known as NAMA) negotiations do not provide governments with the tools they need to build strong economies, increase employment, and respect environmental constraints: it is time to build a new framework. If WTO members are able to build a better framework for the multilateral trading system then Aid for Trade could be a useful and important addition. REFERENCES 1 see www.wto.org WT/AFT/W/22 2 see www.wto.org WT/AFT/W/21 3 see www.wto.org WT/AFT/W/8 4 UNCTAD, The LDC Report 2006, July 2006, Overview, p3 5 see www.wto.org WT/AFT/1 6 see http://en.g8russia.ru/docs/16.html 7 see www.wto.org WT/IFSC/W/15. An OECD evaluation in 2000 also found that the IF had limited pay-off because of lack of clear priorities, ill-defined governance structures and a low other of funding. (see www.wto.org WT/LDC/SWG/IF/1) 8 See www.oecd.org COM/DCD/DEV(2006)1 for a summary of a series of evaluations conducted by the U.S. Agency for International Development (USAID), the U.K. Department for International Development (DFID), the Netherlands and the North-South Institute, Canada. VI. IMPORTANT DATES TO REMEMBER 19 Nov Technical Program of Aid for Trade 20-21 Nov Aid for Trade Global Review End Nov revised Agriculture and NAMA modalities texts 19-20 Dec General Council VII. DOCUMENTS Aid for Trade Road Map 2007: http://www.tradeobservatory.org/library.cfm’refID=97796 EU Aid for Trade Strategy, February 2007: http://www.tradeobservatory.org/library.cfm’refID=97633 OECD-DAC Donor Questionnaire: http://www.oecd.org/dataoecd/15/26/39120395.pdf OECD-DAC Partner Country Questionnaire: http://www.oecd.org/dataoecd/16/17/39124158.pdf Aid for Trade: harnessing the global economy for economic development, World Bank and IMF http://siteresources.worldbank.org/DEVCOMMINT/Documentation/21510688/DC2007-0019(E)AidforTrade.pdf Aid for Trade: twenty lessons from existing aid schemes, South Centre and ECDPM: http://www.southcentre.org/publications/occasional/DP80-ECDPM-Aid-for-Trade-20-lessons.pdf Tentative Program for Aid for Trade Global Review: http://www.wto.org/english/tratop_e/devel_e/a4t_e/programme_global_review_e.doc CIVIL SOCIETY VIEWS ON AID FOR TRADE Can Aid Fix Trade’ Assessing the WTO’s Aid for Trade Agenda www.tradeobservatory.org/library.cfm’refid=89070 L'aide peut-elle réparer le commerce’ http://www.tradeobservatory.org/library.cfm’refID=97865 The Doha Development Agenda and Aid for Trade: Finding the Policy Link, International Gender and Trade Network: http://www.igtn.org/pdfs/aidfortrade2-1.pdf Aid for Trade: another missed opportunity to make trade work for development’ The Fair Trade Advocacy Office: http://www.fairtrade-advocacy.org/documents/FINEcontributiontoAidforTradeDebate.pdf **The Geneva Update is now available in French and Spanish. To subscribe please contact csmaller@iatp.org or go to www.tradeobservatory.org and click on the language of your choice** **Las Actualidades de Ginebra están ahora disponibles en francés y español tambien. Para suscribir, contactar csmaller@iatp.org o visitar el sitio www.tradeobservatory.org y elegir el idioma de su preferencia** **La Mise à Jour de Genève est maintenant disponible en français et en espagnol. Pour vous inscrire, veuillez contacter csmaller@iatp.org ou vous rendre sur www.tradeobservatory.org et cliquer sur la langue de votre choix** Carin Smaller Trade Information Project Institute for Agriculture and Trade Policy, Geneva Office 15 rue des Savoises Geneva 1205 ph: +41 22 789 0734 fax: +41 22 789 0733 csmaller@iatp.org www.iatp.org www.tradeobservatory.org |
