Aid for Trade effort bringing results

Pascal Lamy, Guest Writer

Imagine you produce mangoes in Mali. Imagine there are no tariffs to imports of mangoes into the European Union, United States and China.

Imagine now that you have no laboratory or trained experts in Mali to certify that these mangoes are fit for human consumption. And that the roads and customs procedures are in such a poor state that by the time the mangoes get to the nearest harbour they are already rotten.

You have the opportunities but you cannot trade.

It is precisely to help operations such as those of this Malian producer that in 2005 at the World Trade Organization Hong Kong Ministerial Conference we launched an initiative to expand Aid for Trade.

We wanted to help developing countries, particularly the least developed, build the supply-side capacity and trade-related infrastructure they desperately need to expand trade and contribute more effectively to their development.

We brought together efforts and resources from international aid organisations, regional development banks, donors and partner countries, to secure the needed financial resources for this endeavour.

On July 18 and 19, all stakeholders will gather in Geneva for the third global Aid for Trade review. After six years of hard work, we will look at the results obtained, and there are many.

We have mobilised resources.

Aid for Trade flows have increased by 60 per cent and not at the expense of other forms of aid. Our challenge, now that the crisis has hit national budgets hard, is to maintain the course.

Governments are more and more integrating trade into their overall economic and development strategies. And by involving the private sector and civil society in these programmes, coherent national policies are being established.

We have gathered more than 300 real life stories of how Aid for Trade is working on the ground by improving economic infrastructure like transportation and storage, by supporting innovation and diversification, by investing in quality, by improving business-to-business links.

In Africa, for example, a transport facilitation project is improving the movement of cargo along a corridor linking Kenya to Uganda and other landlocked developing countries in the region.

The project has resulted in drastically shortened transit times at borders with a consequent increase of trade volumes, reduction of transport costs and improved competitiveness.

In Asia, the improvement of the transport infrastructure in the corridor linking Viet Nam, Lao PDR and Thailand is increasing economic cooperation and facilitation of trade, as well as lowering physical barriers to the flow of goods and people.

In Central America, the improvement of the border crossing between El Salvador and Honduras - one of the highest trade volume borders in the region - has reduced border clearance time from 62 minutes down to an average of eight minutes.

Beyond infrastructure, a programme aimed at expanding and diversifying exports in several Sub-Saharan countries has allowed 600 small farmers in Ghana to export 210 tonnes of fresh fruit and vegetables a week to customers in Europe.

A new system to attain international accreditation for testing laboratories in Sri Lanka and Pakistan, to satisfy global requirements on quality standards, has allowed these two countries to increase their exports of food products, in particular fish.

And also in Central America, technical assistance provided to the public and private sector to expand agricultural trade through compliance with international standards has involved over 1,000 firms and has generated increased export revenues with positive impact on employment creation.

All these examples show the very clear link which exists between Aid for Trade and improved trade performance. They also show the contribution of trade to economic development and growth.

We have come a long way. The results are on the table. But we cannot be complacent: the Malian mango producer reminds us that we can and must do better.

We must look not only at outputs but outcomes and impact. We must also associate closer the private sector, and in particular small and medium enterprises. A lot of work lays ahead to strengthen this important piece of global cooperation.

Pascal Lamy is director general of the World Trade Organization.

 
business@gleanerjm.com