WORLD TRADE WT/COMTD/AFT/W/15 28 October 2009 ORGANIZATION (09-5371) Committee on Trade and Development Aid for Trade SECOND GLOBAL REVIEW OF AID FOR TRADE 6 AND 7 JULY 2009 SUMMARY REPORT The attached summary report of the Second Global Review of Aid for Trade, which took place on 6 and 7 July 2009, is being circulated to delegations for information. _______________ WT/COMTD/AFT/W/15 Page 3 SECOND GLOBAL REVIEW OF AID FOR TRADE 6 AND 7 JULY 2009 SUMMARY REPORT I. OPENING ADDRESS ..............................................................................................................5 II. SESSION 1: AID FOR TRADE – THE GLOBAL OUTLOOK..........................................5 III. SESSION 2: AID FOR TRADE – FROM COMMITMENT TO IMPLEMENTATION ..............................................................................................................8 IV. SESSION 3: AID FOR TRADE – ASSESSING IMPLEMENTATION...........................21 V. SESSION 4: AID FOR TRADE - PRIVATE SECTOR PARTNERSHIP FOR GROWTH................................................................................................................................30 VI. SESSION 5: AID FOR TRADE – MAINSTREAMING TRADE IN NATIONAL AND REGIONAL DEVELOPMENT COMPETITIVENESS STRATEGIES.................43 VII. SESSION 6: AID FOR TRADE – REGIONAL IMPLEMENTATION EXPERIENCES ......................................................................................................................54 A. COMESA-EAC-SADC NORTH-SOUTH CORRIDOR .................................................................54 B. GREATER MEKONG DELTA SUB-REGION..................................................................................58 C. INFRASTRUCTURE AND INTEGRATION CORRIDORS IN LATIN AMERICA...................................61 VIII. SESSION 7: AID FOR TRADE – ASSESSING IMPACT AND EFFECTIVENESS .....63 IX. SESSION 8: AID FOR TRADE – SOUTH-SOUTH COOPERATION EXPERIENCES ......................................................................................................................71 X. SESSION 9: AID FOR TRADE – WAY FORWARD........................................................81 XI. SESSION 10: AID FOR TRADE – LOOKING AHEAD.................................................109 ANNEX – ANNOTATED AGENDA ...............................................................................................113 WT/COMTD/AFT/W/15 Page 5 I. OPENING ADDRESS 1. Opening the Second Global Review of Aid for Trade, Mr. Ban Ki-moon, Secretary-General, United Nations (UN), stated that the Review came at a critical moment. The global financial and economic crisis was having a severe impact on global trade, with a decline of ten per cent predicted in 2009. Unless the crisis was reversed, it would unravel the progress that developing countries had made over the past two decades in reducing poverty. 2. Trade had long had tremendous potential as an engine of sustained economic growth and development. Trade also had to be part of efforts to stimulate recovery. Mr. Ban Ki-moon recalled that the United Nations Conference on the World Financial and Economic Crisis and its Impact on Development had urged countries to meet existing pledges on Aid for Trade. The United Nations had repeatedly stressed Aid for Trade as a crucial component in improving trade competitiveness of developing country producers and exporters. 3. Trade openness alone was not sufficient. Countries had first to have in place a competitive production base, the necessary infrastructure and legal frameworks in order to export. Knowledge also played a key role in enabling countries to take advantage of international rules and opportunities. With these steps, as well as reforms to the global trading regime, trade could achieve a great deal. 4. According to Mr. Ban Ki-moon, the Aid-for-Trade initiative had made good progress in the three years since its launch. The April 2009 G-20 Summit pledge of US$250 billion for trade financing could lead to a significant increase to the US$25 billion that Aid for Trade received in 2007. He noted with pleasure that a number of donor countries and agencies were steering aid towards policies and strategies that would bring practical content to the Initiative and urged other development partners to do the same. 5. The Secretary-General noted, however, that many developing countries had not benefited, even though they received traditional trade-related technical assistance. To them, Aid for Trade remained a concept rather then a practical reality. The Second Global Review would help find ways to increase Aid for Trade without subtracting from the volume of official development assistance and without creating new debts. He encouraged the meeting to find ways to make Aid for Trade more predictable and easier to access, especially for the poorest countries, but noted that beneficiary countries must also do their part. 6. The United Nations had expertise in trade and development and was well-positioned to provide capacity-building, advisory services and analysis to support Aid for Trade. In conclusion, Mr. Ban Ki-moon stated that at this time of profound uncertainty and growing need, the UN looked forward to working with partners on the promising, Aid-for-Trade initiative. II. SESSION 1: AID FOR TRADE – THE GLOBAL OUTLOOK 7. Mr. Pascal Lamy, Director-General, World Trade Organization (WTO), expressed his thanks to UN Secretary-General Ban Ki-moon for his opening remarks and noted that his presence sent a very strong signal of commitment from the whole UN family towards Aid for Trade. 8. The Director-General noted that much had been achieved since the launch of the Aid-for- Trade initiative in 2005. It had entered a new phase and was living up to its promise of moving from making trade possible, to making it happen. In the past 18 months, implementation had been stressed in national and regional events, the monitoring framework had been refined and developing country members had shown a much higher degree of engagement. WT/COMTD/AFT/W/15 Page 6 9. The regional review meetings held in Zambia, Jamaica and Cambodia had underlined the commitment of partners and donors to cooperate and coordinate in the pursuit of common goals. Tangible progress had been made in turning commitments into implementation action. 10. Secretary General Gurría and his team at the OECD had done an excellent job in putting together the flagship report on Aid for Trade. The 2007 edition had been groundbreaking; the 2009 version should be prize-winning such was the depth of its analysis and the clarity of its presentation. The report painted an up-beat picture of trade being prioritized by partner countries in national development strategies; of donors offering more and better Aid for Trade, of new partners becoming engaged in South-South cooperation. The increases in Aid for Trade had been achieved without reducing resources to other development priorities such as health, education or environment. 11. The Director-General recalled that the global trading environment had worsened dramatically since the First Global Review in November 2007. Global trade growth of six per cent in 2007 had been replaced by a projected 10 per cent contraction in 2009. It was one of the biggest challenges that the multilateral trading system had faced since its inception. The crisis had a human face. Poverty alleviation targets, notably the Millennium Development Goals (MDGs), had become more challenging to achieve. If Aid for Trade was urgent in 2007, it was essential today. It was the investment that would allow many developing prepare to exit the crisis by enhancing their trade capacity. 12. Trade finance had been identified as a major constraint during the regional events held in 2007 prior to the current crisis. Since then the situation had worsened significantly. In this context, the Global Trade Liquidity Program was a very tangible answer to address supply-side constraints and was in harmony with the mandate given by Ministers in Hong Kong. Another key initiative was the Enhanced Integrated Framework (EIF) for least-developed countries (LDCs). After months of hard work by all stakeholders, the Director-General noted that the EIF was fully operational and that the first two projects, for Yemen and Sierra Leone, had been approved for funding. 13. The G20 process had highlighted the importance of sticking to commitments to scale up aid. It had also struck a note of optimism in its reaffirmation of commitments to meet the MDGs and to achieving Official Development Assistance (ODA) pledges, including commitments on Aid for Trade, debt relief, and the Gleneagles commitments, especially to sub-Saharan Africa. Collectively, it had to be ensured that this commitment did not fade. This was the reason why the theme for the Global Review was "Maintaining Momentum". The prize was better trade performance on the part of developing countries, and in particular, the LDCs. This trade performance had, in turn, led to economic growth which lifted people out of poverty. An early and successful completion to the Doha Round would enhance market access opportunities for the countries that needed it most. Aid for Trade would ensure that these market access opportunities were seized, in particular by the poorest Members of the WTO. A collective objective was to demonstrate what was known to be true: that Aid for Trade was worth doing and worth doing well. 14. The Director-General made it clear that it was up to Members to make this happen by integrating trade into national development