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    Getting the Framework Right

     

     
     
    International Trade Forum - Issue 4/2006, © International Trade Centre

    © Istockphoto/ E. Turudu

    Country ownership, a stronger voice for business and non-governmental organizations (NGOs) and stronger institutional backing are essential lessons from a valuable process to coordinate trade assistance in the world's poorest countries.

    Despite some shortcomings, the Integrated Framework for Trade-Related Technical Assistance for Least Developed Countries (IF) is recognized as a sound basis for trade capacity building and coordination among assistance providers.

    First mandated at the 1996 WTO Singapore Ministerial Conference and subsequently endorsed at a High-Level Meeting on least developed countries (LDCs) in October 1997, the IF has been at the heart of the Action Plan for LDCs to help these countries participate more effectively in the world trading system.

    The IF process was revamped in 2000. As a result, a diagnostic tool for trade development is now part of the process. The IF has also been integrated within the structure for Poverty Reduction Strategies.

    By the end of 2006, Diagnostic Trade Integration Studies (DTIS) and national validation workshops will have been completed for 24 countries. Another nine countries are either starting or in the process of drafting their trade studies and ten countries have a technical review under consideration.

    What are the recognized ingredients of success? At a minimum:

    • A coherent trade strategy that is closely integrated with a country's overall development strategy.
    • Effective mechanisms for intra-governmental policy coordination, for consultation among the three key sets of stakeholders: government, the business sector and civil society.
    • A network of trade support institutions.
    In addition, the IF process should be anchored by firm country ownership and be backed by strong political commitment.

    First lesson: Country ownership and coherence

    The government must be able to provide the right leadership when both formulating and implementing trade development policies. Throughout the entire process, the political commitment, support and participation of the country's top decision-makers are needed - from preparation to successful completion of the diagnostic study, to the implementation of the technical assistance matrix, to integration of pro-poor trade policies and programmes in the key document, the Poverty Reduction Strategy Paper (PRSP), and, for some countries, to their successful accession to the WTO.

    • Tap into local knowledge. The government has an important role as the local partner. Its contribution, in the form of time and local knowledge, is crucial. More often than not, technical missions have been comprised of highly qualified international consultants, most of whom regrettably had never been in the countries they were supposed to advise and thus lacked insight into the local realities.
    • Reconcile trade and development cultures. Mainstreaming trade into development policies is difficult without a coherent policy framework. Ultimately, mainstreaming trade means giving greater visibility to linkages between trade and other related economic policy areas. Capacity building provided to the government should aim at helping it reconcile two distinct cultures, namely, trade and development. Trade involves highly centralized, legal negotiation and implementation of WTO and other trade agreements. Development is decentralized and demand-driven, and based on a country-owned process. Development culture supports a host of complementary policy reforms outside the purview of the WTO and costly investments in trade-related institutions, infrastructure and human resources.
    • Coordinate the role of finance. Financing is also critical in mainstreaming efforts. Without it, efforts to mainstream trade will dissipate. Over the long term there is a need to develop and consolidate mutually supportive policies that connect trade, development and finance communities. This requires effective coordination across government institutions and development partners (donors and agencies), as well as partnership between the government and private sector participants in the economy.

    Second lesson: A multi-level partnership

    Partnerships are important; trade matters to so many different groups that they all need to be involved.

    Achieving support from all key stakeholders - government policy-makers, bureaucrats, business sector actors, development partners and civil society - requires an inclusive process that engages the stakeholders all along the various stages of the cycle.

    • Consultation is easier said than done. Identifying key issues and broad approaches to trade-sector strategy is not necessarily the most difficult part of the exercise. What is more demanding is to create a plan of action that is the result of a true process of consultation among all stakeholders, one in which each partner is able to contribute ideas and inputs.
    • Bring in business. Institutionalizing systematic consultations between private and public sector institutions can have positive, long-term effects. Private enterprises are well placed to identify trade-related problems and bottlenecks.
    Capacity building for the business community, many of whom work with trade support institutions, has proven critical. Trade support institutions, through their access to government decision-makers and their active participation in coordination meetings with the government, can ensure that constraints faced by private enterprises are understood and taken into consideration when designing a coherent development strategy. At the same time, trade support institutions can ensure that authorities draw on the untapped resources and potentialities of the private sector as appropriate.

    • A role for NGOs. In recent years, civil society organizations have been very active in shaping the trade development process despite the lack of a formal dialogue mechanism. Apart from contributing to negotiating positions and supporting (technically and financially) specific trade events, NGOs are shedding their adversarial skin. They have gradually earned the respect of former opponents in society and government.

    Third lesson: Bridge demand and response

    The third lesson from successful IF initiatives is the need for a solid implementation mechanism championed by a focal point and supported by a dedicated core team. Resources are needed to strengthen the capacity of the focal point to drive the process, including the creation of a national implementation unit and the provision of both secretariat resources and adequate capacity-building support in trade-related issues.


     

    What is the Integrated Framework?

    The Integrated Framework of Trade-Related Technical Assistance is an international initiative in which six agencies dealing with trade (International Monetary Fund, ITC, UNCTAD, United Nations Development Programme, World Bank and WTO) coordinate their efforts with donors and least developed countries to respond to LDCs' trade development needs.

    Most LDCs are part of this process (43 out of 50).

    The Integrated Framework is being "enhanced" as part of the Aid for Trade process and could serve as a model for other aid for trade initiatives.

    WTO agreed to make the Enhanced Integrated Framework operational by the end of 2006.



    Siphana Sok (sok@intracen.org) is Director of ITC's Division of Technical Cooperation Coordination.