aid f t d i iti ti f aid for trade: initiatives for ...css.escwa.org.lb/edgd/1474/d2s5-2.pdfaid for...

Aid f T d I iti ti f

EGM ON TRANSPORT AND TRADE FACILITATION IN ESCWA REGION

Aid for Trade: Initiatives for DevelopmentpMobilising Aid for Trade – Encouraging CoordinationCoordination

By: Angela StrachanChief, Business EnvironmentInternational Trade CentreBeirut, March 2, 2011

OutlineOutline–Introduction

–Regional Overview

–Examples in Encouraging A4T Coordination

–Obstacles to Trade from the Perspective of the

Private Sector

–Recent findings on Aid for Trade Facilitation

O i i th R M i th R lt–Organising the Response, Measuring the Results

–Conclusion

Who is ITC?

Created in 1964.The joint technical cooperation agency of the United Nations (UN) and the World Trade Organisation (WTO), for business aspects of trade developmentdevelopment

- 100% Trade Related Technical Assistance (TRTA)Private sector focused- Private sector focused

The UN and WTO equally share the funding of the ITC regular budget, and as such our budgets are in Swiss Francs

EXPORT IMPACT FOR GOODEXPORT IMPACT FOR GOOD

We want developing countries to derive sustainable social,i t l d i i t f th i tenvironmental and economic impact from their exports

IMPACTS MDG Goals

Economic growth &related distribution Job creation

of wealth

Social

EXPORT IMPACTFOR GOOD

ITC

OUTPUTS

Social, Economic &

EnvironmentalSustainability

Equal access forwomen, youth &

poor communities

Strategic Framework Alignment

5

g g

Enterprises Trade Support Institutions Policymakers

AdviseStrengthen Get enterprises

Develop strategies and plans for exports

Establish an adequate

Develop andimplement strategies

policymakersg

exporterscompetitiveness

Achieve sustainableexport success

export-ready within sectors / value chains

Build capacity for integrationof business interests

qInstitutional framework

Establish andexport success improve networks

Business and Trade PolicyTSI Strengthening

Exporter Competitiveness

Export Strategy

Trade Intelligence

6

Regional Trade OverviewRegional Trade Overview

Source: ITC’s Office of Arab States

Countries (21) covered by ITC’S Office for Arab States

Target Countries

Arab LDCs • Integrating SMEs in global value chains• Setting‐up and enhancing trade support institutions

Trade Challenges

(5)Setting up and enhancing trade support institutions

• Integrating business into trade policy• Developing products with high value added exports• Developing sectors with export potential

Non oil/gas exporting countries (8)

• Promoting economic and regional integration• Developing intra‐regional trade • Improving business environment • Enhancing trade policy• Promoting public private dialogue on trade policies, trade facilitation

and export strategies(8) and export strategies• Developing sectors with emphasis on services• Strengthening SMEs competitiveness • Strengthening quality and standards management

Oil Exporting Countries (8)

• Promoting export diversification away from oil • Enhancing competitiveness • Promoting regional integration • Developing specialised trade development services/tools – with focus on

trade intelligence • Promoting quality management and other export advisory services• Developing sectoral export strategies with emphasis on services

Trade Needs/Challenges in overview

Needs/Challenges

• Developing intra-regional trade• Removing NTB’s

REGIONALLEVEL

Trade Needs/Challenges in overview

• Removing NTB sLEVEL

• Taking a strategic view of export developmentincluding export and market diversification NATIONAL

POLICY g p• Creating a more favourable business

environment

POLICY LEVEL

• TSI strengthening and capacity buildingTSI LEVEL

B ildi i t ti l titi f• Building international competitiveness of exporters, particularly women and youth

• Business sector understanding of benefits of trade agreements (WTO, FTA, bilateral)

SME LEVEL

Enhancing Intra-regional Trade

Needs/Challenges

Enhancing Intra regional Trade

. Low level of integration: Non-oil exports as percentage of GDP Lowest.

G it d l h hi h f i d t d ithi th i (W ldGravity models show high scope for increased trade within the region (World Bank).

OIC target of 20% by 2015. g y

Low Diversification of Exports

Needs/Challenges

Low Diversification of Exports

Diversification levels are below global average

Improving the Business Environment

Needs/Challenges

Improving the Business EnvironmentArab World still has an average rank of 103 in Doing Business Rankings.

Clearing exports through customs 6.3 days against world average of 5.6.

Cl i i t th h t 11 4 d i t d f ldClearing imports through customs 11.4 days instead of world averageof 9 days.

Increases in trade upto 30 % expected by reducing delays at customs (Source: WB/IMF).

Among the highest tariffs in the world but NTMs more trade restrictiveAmong the highest tariffs in the world but NTMs more trade restrictive.

38 « value creating » and 2 « value destroying » legislation in 16countries in 2009 but long way to go (Doing Business Report 2010).g y g ( g p )

12

Aid for Trade (A4T) EncouragingAid for Trade (A4T) - Encouraging Coordination through Regional Programmes

Aid for Trade

ITC’s Aid for Trade Focus

14

Boosting international tradeBoosting international tradeDiversification of exportsMaximizing the links between the export

oriented and domestic elements of a country’s environments

Building countries’ capacity to identify issuesBuilding countries capacity to identify issues and adapt to a constantly changing business environment

3- pronged strategy to connect

15

3 pronged strategy to connect countries to global markets

Helping enterprises to become more competitive and boosting their ability to compete in domestic, regional and international trade

Strengthening the capacity of TSIs at national and regional levels

Helping to make national policy environments more friendly for export business, especially SMES e d y o e po t bus ess, espec a y S Sincluding strengthening the ability of policymakers to integrate their businesses into global economy

A4T - Encouraging Coordination

16

g gthrough Regional Programmes

Opportunities to foster export growth through regional programmes, especially where regional solutions respond to

t d h llcommon trade challengesSupporting South-South TradeRationalizing regional supply chains for international

competitivenesscompetitivenessEnACT – Regional Programme for Arab States PACT 11 – Regional Programme for Africa


17

g gthrough Regional ProgrammesE ACTEnACT:The Enhancing Arab capacity for Trade (EnACT) programme involves Algeria, Egypt, Jordan, p g g , gyp , ,Morocco and Tunisia

Provides trade intelligence and enhances t ti ith fexporter competiveness with a focus on

gender and youthOngoing initiatives drawing heavily onOngoing initiatives drawing heavily on

local/regional expertise to build capacity


18

g gthrough Regional ProgrammesProgramme for Building African Capacity for g g p yTrade – PACT 11

ITC’s largest regional programmeK h t i ti i ti h tKey characteristic – uses innovative approach to

build networks of specialised national and regional TSIs and encourage private-public sector dialogue i d t i i i t d i t i l t daimed at expansion in intra and inter regional trade .Led by African public and private sector institutionsIncludes a gender based programme, ACCESS!Includes a gender based programme, ACCESS!PACT II and ACCESS! are key to ITC’s efforts to

deliver Aid for Trade in Africa


19

g gthrough Regional ProgrammesPACT 11:

Tailor ITC’s interventions to support Regional Economic Committees (RECs) to build regional capacities for boosting regional and global trade

Enhance sector specific competitiveness and market links

Coaching businesswomen to become successful gexporters

Encouraging dialogue between RECs to achieve better coherence in their approaches to trade and development pp pand trade promotion


20

g gthrough Regional Programmes

PACT 11

RECs toNational TSIs for delivery ofRECs to

become effective

champions of i l t d

Regional TSI Networks for PPP

for delivery of targeted and

effective market and products

support servicesregional trade development

with the RECs and to coordinate trade development and promotion across

support services to enterprises in priority sectors

promotion across the region

Obstacles to Trade from the Perspective of the Private Sector:

(a) Non-Tariff Measures Survey(b) A4T R i f h B i P i(b) A4T Review from the Business Perspective

Source: ITC Market Analysis and Research Section

(a) BACKGROUND TO ITC’s WORK IN NON-TARIFF MEASURES

ITC Client Survey 2008

ITC’s Programme on NTMsgObjective: Assist countries to better understand the non-tariff obstacles

companies face – to identify need for concrete actions that help to overcome these obstaclesovercome these obstacles

Business perspective in focus• Exporters (and importers) have to deal with NTMs and other obstacles

on a day-to-day basis – they know best which challenges they face and to which extent they are affected

Main tool: Direct empirical research through company level surveysMain tool: Direct empirical research through company level surveys• Surveying directly the business sector enables to assess the impact of

non-tariff obstacles on products and sectors

Implemented in close collaboration with national and international partners

NTM Surveys – Methodology

Global methodology, adjusted to country-specific requirements Implemented by local survey specialist, in collaboration with Ministry of Trade business associations Chamber of Commerce etcTrade, business associations, Chamber of Commerce, etc.Focus on exporting and importing companiesAdditional interviews with other relevant stakeholders, e.g. business associationsRepresentativeness by sector (excluding services, minerals and

arms) and company size: All export sectors that cumulatively account for more than 90% of country’s export value and selected importsI l t ti 2 t hImplementation: 2-step approach:

400-1000 phone screens 150-300 face-to-face interviews per country

Importing country/Market(top 20 export destinations for

Ugandan export value, Share in total

Ugandan export

Number of reported

complaints about

Export value of Ugandan affected

Share of affected products in the value of Ugandan export to this

NTM cases reported in the survey of Ugandan exporters and corresponding trade data,for top 20 Ugandan export destinations, broken down by region

Ugandan products) USD (*) Ugandan export complaints about this market

products, USD (**) Ugandan export to this market

AfricaSudan 157,066,535 11.8% 51 70,476,613 44.9%Kenya 118,054,232 8.8% 59 51,124,302 43.3%DRC 100,046,098 7.5% 25 30,594,081 30.6%, , , ,Rwanda 83,284,389 6.2% 110 27,545,528 33.1%Burundi 42,718,942 3.2% 28 15,132,939 35.4%Congo 42,231,387 3.2% 7 46,187 0.1%United Republic of Tanzania 30,594,091 2.3% 20 1,087,705 3.6%South Africa 10,710,972 0.8% 8 14,320 0.1%Sub total Africa 584 706 646 43 8% 308 196 021 675 33 5%Sub-total Africa 584,706,646 43.8% 308 196,021,675 33.5%

AfricaUnited Arab Emirates 177,887,225 13.3% 6 119,797 0.1%Singapore 22,515,163 1.7% 0 0 0.0%China 14,406,211 1.1% 18 350,038 2.4%Sub-total developing countriesSub total developing countries outside Africa 214,808,599 16.08% 24 469,835 0.2%

Sub-total developing countries 799,515,245 59.84% 332 196,491,510 24.6%

Developed countriesSwitzerland 86,618,601 6.5% 10 79,221,211 91.5%Netherlands 66,506,134 5.0% 40 30,477,476 45.8%, , , ,Germany 65,093,340 4.9% 21 57,177,212 87.8%United Kingdom 53,265,627 4.0% 52 39,034,002 73.3%Belgium 52,787,915 4.0% 7 27,283,006 51.7%France 32,708,525 2.4% 10 28,212,641 86.3%Spain 26,647,552 2.0% 8 17,971,571 67.4%United States of America 19 588 130 1 5% 20 7 353 283 37 5%United States of America 19,588,130 1.5% 20 7,353,283 37.5%Italy 13,239,898 1.0% 10 10,265,539 77.5%Sub-total developed countries 416,455,722 31.2% 178 296,995,941 71.3%

Other 120,200,644 9.0% 85 6,185,817 5.1%Total 1,336,171,611 100.0% 595 499,776,022 37.4%(*) Data source: UNSD Comtrade, 2007.

(b)Uganda A4T Survey

26

• Project aimed to identify connection between Aid for Trade j yflows and Ugandan trade flows

• Result chains were mapped from a business perspective in terms of • Key determinants of competitiveness, • A4T flows into these areas• Improvement of services in these areas• Change in actual export performance

• Analysis used to understand and and overcome disconnect in A4T taxonomy between business sector and A4T

idproviders

Methodology of Uganda A4T Review27

• In 2010, ITC and the Uganda Export Promotion Board (UEPB) undertook a detailed survey of 20 trade associations/institutions and 100 enterprises to assess theassociations/institutions and 100 enterprises to assess the impact and effectiveness of AfT, using stratified random samplingT i t li k d ti i d i i t d th h f• Two interlinked questionnaires, administered through face-to-face interviews, were developed for: - Exporting companiesp g p- Associations

• Both questionnaires are based on A4T categories to match aid flows to export flows and business sector opinion onaid flows to export flows and business sector opinion on A4T.

Source: Working Paper: ITC/Uganda Export Promotion BoardSource: Working Paper: ITC/Uganda Export Promotion Board

Sample of results from the survey of the business perceptions in Uganda

Overwhelming number of the interviewed exporters complained about poorinfrastructure (roads and railway) high air freight charges power shortages access toinfrastructure (roads and railway), high air freight charges, power shortages, access to loans, low skills on technology, low access to information. Very few comments concern destination markets outside Africa (EU, US, Asian markets).

• “The government should standardise and improve on its facilities like warehouses and g pcold rooms. Sometimes the Entebbe cold room malfunctions and this leads to spoiling of many flowers awaiting export, thus revenue is lost.”

• “Trade with Sudan is really ok. The only problem is roads.”

• “Transport from Mombasa to Kampala is more expensive than transporting a container from China to Mombasa.”

Source: Working Paper: ITC/Uganda Export Promotion Board

Results of Business Survey29

Associations and companies have noted improved services inAssociations and companies have noted improved services in areas, energy, transport, telecommunications and business support services. Increased AfT in these areas are important factors in the improved competitiveness of exports.

Question: assess the impact of various factors on the ability to exportTrade Associations Perceptions:

Energy supply

Companies Perceptions:

Energy supply

Question: assess the impact of various factors on the ability to export.

Transport, logistics and storage

Communications

Energy supply

Transport, logistics and storage

Communications

Customs efficiency

Market access (trade policy)

Trade support services

Customs efficiency

Market access (trade policy)

Trade support services0% 20% 40% 60% 80% 100%

Strong impact Some impact No impact

0% 20% 40% 60% 80% 100%

Trade support services


Results of Business Survey (continued)30

Q ti Wh t i th i d i t Question: What is the perceived impact of

Perceived impact of services according Perceived change in quality of services

Question: What is the perceived impact of services on the ability to export?

Question: What is the perceived impact of the quality of services on the ability to export?

Perceived impact of services according to associations

Perceived change in quality of services according to Ugandan companies

Trade informationAccess to trade and market

information

Supply chain management

Prod. process and quality assur.

Supply chain management

Production process and quality assurance

Marketing, promotion, branding

Trade finance

0% 20% 40% 60% 80% 100%

Marketing, promotion and branding

Trade finance

0% 20% 40% 60% 80% 100%


0% 20% 40% 60% 80% 100%

Improved Stayed the same Deteriorated

Selected ITC Initiatives in Encouraging 31

g gCoordination for A4T

Country-led and participatory national export strategy y p p y p gyformulation (Jordan, Yemen*, Egypt)Assitance with WTO Accession

- Building the private sector’s understanding and partnership ith th bli t t t k d t f WTO b hi (with the public sector to take advantage of WTO membership (eg

Yemen) Through the Enhanced Integrated Framework , supporting sustainable trade development and tradesupporting sustainable trade development and trade policy solutions to problems faced by LDCs Institutionalized Public Private Partnerships, e.g. export councils, competitiveness councils, etcpBenchmarking of Trade Support Institutions (TSIs)

Aid for Trade and Trade Facilitation

Some Final Thoughts.......


Recent research indicates partner countriesRecent research indicates partner countries are satisfied with the effectiveness of trade facilitation programmes.... ac tat o p og a es

And that better trade facilitation can help boost exports (improve competitiveness), and support export diversification in terms of

d t d k tproducts and markets.

Effectiveness of Aid for Trade programs as assessed by partner countries. (Source: OECD and WTO,2009)

Figure 3: Aid for Trade by category, million USD, 2002‐2007. (Source: OECD and WTO, 2009, Table A1.1.)

Aid for Trade by category, million USD, 2002-2007. (Source: OECD and WTO, 2009WTO, 2009


On the donor side Aid for Trade is highlyOn the donor side, Aid for Trade is highly concentrated....three largest donors—the World Bank the US and Japan—accountWorld Bank, the US, and Japan—account for over half of all Aid for Trade commitmentscommitments.

‘Building productive capacity’ = the largestBuilding productive capacity = the largest percentage of their A4T portfolio

Aid for Trade by Income Group and Category, million USD, 2007. (Source: OECD and WTO2009)

Building productive capacity aid by sector, million USD, 2007. (Source: OECD and WTO, 2009)

Regional Aid for Trade Disbursements by Category (millions $)

Aid 4 Trade Disbursements in the Arab States (2006-2009)

Regional Aid for Trade Disbursements by Category (millions,$)

2500

Milli $

1500

2000

Trade policy and regulations

Millions $

1000

1500Economic infrastructure

Building Productive Capacity

0

500Trade related adjustment

Y02006 2007 2008 2009

Years

Source : ITC Office of Arab States

35 00

Aid for Trade Facilitation (2006‐2009) $ million

25.00

30.00

35.00

15.00

20.00

25.00

Trade Facilitation (2006‐2009)

5.00

10.00

0.00

2006 2007 2008 2009

Years

Source : ITC Office of Arab States years 2006 2007 2008 2009Trade Facilitation (2006 2009) 4 60 17 60 32 90 0(2006‐2009) 4.60 17.60 32.90 0


Broad’ definition of trade facilitation, linked to reducing trade transaction costs - a natural fit with ITC’s core mandate of private sector development

Increased focus on trade facilitation by many donors andIncreased focus on trade facilitation by many donors and the scaling-up of Aid for Trade efforts

F ITC t ti l t l it i ith thFor ITC, potential to exploit synergies with other programmes and various work streams, e.g. Non Tariff Measures, Trade Finance and Trade Law

ITC - Renewed Focus on Results Based MManagement

• Aid for Trade as a framework to continue• Aid for Trade as a framework to continue to position ITC’s work

• Ensure country ownership for sustainable• Ensure country ownership for sustainable results

• Implementing a robust project• Implementing a robust project management system

Thank you for your attention!

Contact Details:

Angela Strachan

Chief Business Environmentf

[email protected]

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