Historical archive

Focus on the Enhanced Integrated Framework and the Aid for Trade Initiative

Historical archive

Published under: Stoltenberg's 2nd Government

Publisher: Ministry of Foreign Affairs

Statement at High Level Panel on Development

State Secretary Stubholt participated on 25 September in the WTO Public Forum in Geneva. (27.09.06)

State Secretary Liv Monica Stubholt

Coherence and Capacity Building for Trade: Focus on the Enhanced Integrated Framework and the Aid for Trade Initiative

WTO Public Forum, Geneva 25 September 2006

(Introduction on the Public Forum and WTO in general)

  • I find this dialogue with the civil society highly important. For me, this Forum is a great opportunity to listen to you and discuss with you. For the development of our policies it is of fundamental importance to have a good grasp of the public views regarding WTO and the way it works.
  • Not least, I look forward to more than just general point of views from the civil society. I expect specific and constructive input on the different themes on the agenda of the Forum, and in particular on the theme for our specific panel discussion - which will deal with particularly demanding questions.
  • Let me first, very briefly, express my concern over the suspension of the Doha development round. A successful outcome is essential in order to consolidate the rules-based international trading system and to create economic growth, employment and welfare, in particular in developing countries. On this background, what we are here to discuss in today's panel, is relevant.
  • Before attending this Public Forum, we organized a small meeting with some NGOs in Norway, to listen to their views on the aid for trade agenda. I will come back to what they thought was important.

(Need for Aid for Trade - general remarks)

  • It is an undeniable fact that many developing countries, and in particular the poorest ones, have been unable to benefit from the market opening that the WTO has achieved, because of lack of the necessary trade-related capacity, of basic infrastructure and not least of adequate productive capacity. Even though Norway imposed duty and quota free market access for LDCs with effect from 2002, the import increase has been marginal.This has to be addressed fully. In my opinion, eradicating poverty and integrating LDCs in the multilateral trading system in order to create sustainable economic growth, is maybe the greatest challenge in the XXIs century.
  • Developing countries goods exports expanded by 21,3 % last year, reaching a record high level of 35,9 % of world trade in goods. However, LDCs' exports of goods increased with 27,5 %. But the share of the LDCs in world trade in goods did remain at its present level of 1,8 %, which we can all agree is not good enough, it is disturbingly low.
  • Many regions also experienced sound trade expansion in services, such as South-East Asia, South America, Sub-Saharan Africa, the Caribbean- and India. The LDCs as a group also recorded sound export growth in 2005 (by 9,7 %), but their share in world trade in services remains at only 0,5 %.
  • Things need to be done, particularly with regard to the LDCs.
  • I believe there is a broad agreement in this room that trade can be a powerful engine for development, even though poverty is a complex and multidimensional problem and there are no simple solutions. Neither trade nor economic growth provide any guarantee of development or the eradication of poverty. Trade is, however, an important instrument for fostering economic growth.
  • This High Level Panel will focus on the very heart of the WTO negotiations, namely the developing countries. We all agreed to place developing countries in the centre of the Doha round. Because of their need to take part and get integrated in the multilateral trading system, all developing countries' interests should be sharply focused.
  • There is little doubt that the Doha Development Agenda has raized high expectations,
  • I want to emphasize very clearly that Aid for trade is important in its own right and is not conditional upon success of the Doha negotiations. Aid for trade cannot substitute for the development benefits that will result from improved market access, but is a valuable and necessary complement .
  • To follow up on the legitimate expectations of increased and improved Aid for Trade, it is appropriate to meet, -with an open mind-, the question whether existing structures serve us well.

(WTO task force on aid for trade)

  • Let me first give some comments on the WTO task force report on Aid for Trade. The report is most welcome. We thank the task force for the job it has done. I appreciate the pragmatic approach to the definition of aid for trade carried out by the task force. In our view it is clear that national needs and priorities have to be the starting point for addressing the trade agenda in a given country. This reflects that countries are facing different challenges, and that a “one size fits all” approach is not applicable.
  • The report is in my view a sound basis for further discussion on how to operationalise aid for trade. I find the recommendations on strenghtening the diagnosis of needs, and the coordination of donor responses in relation to regional and cross-border issues very relevant. Let me also, in this regard, mention the Communiqué from the Development Committee meeting in Singapore last week on the “need to improve existing instruments to address cross-country and regional projects and strenghten the monitoring of regional initiatives and funding”.
  • It seems appropiate to establish an ad hoc consultative group to take forward the practical follow-up of the recommendations in the report. We have to make sure that we keep momentum, keep our promises and live up to the high expectations on aid for trade. I welcome the gender and sustainable environment perspective being addressed.

(Enhanced Integrated Framework - task force)

  • Turning to the Integrated Framework, once more I want to emphasize that supporting the economic growth agenda is imperative to integrate the least developed countries into the multilateral trading system. An enhanced Integrated Framework (IF) will, in my view, represent an important tool in assisting the LDCs in defining their needs in the trade area through the Diagnostic Trade Integration Studies- the DTIS-process.
  • Furthermore, IF is a vehicle to assist the LDCs to develop their trade capacities, to ensure national ownership and the integration of trade into the national development plans. Actions need to happen on the ground, and in this regard I think that the task force’s recommendations make crystal clear the importance of country level implementation.
  • It must be understood that the IF does not have the scope, nor will have sufficient resources to fully respond to the whole range of needs in the LDCs., i.e. financing the implementation of the whole DTIS. IF is primarily about building capacities and ownership locally. The major bulk of funds will have to come from bilateral and other multilateral mechanisms, such as the World Bank. Indeed, as Don Stephenson said, the big money will be outside IF.
  • Norway has been the largest bilateral donor to the IF trust fund so far. We remain fully committed to the enhanced IF. However, it seems imperative to broaden the donor base in a sufficient and predictable way. Securing sufficient and predictable funds seems to be a major challenge for the success of the enhanced IF.
  • Another challenge is the lack of field presence. In light of the fact that trade is handled by Geneva, we fully support that the IF secretariat be located here. However, all forces have to unite to overcome the practical obstacle that the lack of field presence might represent in the daily work.
  • The clear relation to the Paris Declaration is underlined both in the report from the task force on the enhanced IF and in the report from the task force on aid for trade. As donors, it is important that we align and harmonize our support around national priorities, and make use of national systems and channels.
  • I look forward to the transition teams carrying out their work ahead. We are confident that the transition teams will identify risk factors and propose ways to overcome possible problems, thereby ensuring the success of the enhanced IF.

(NGO views )

  • As I mentioned earlier, we met with a few NGOs in Oslo before participating in this Forum. These NGOs made, in particular, the following points:
  1. Increased aid for trade must not be used as neither carrot nor stick in order to make the developing countries, and in particular the LDCs, accept a new WTO agreement that is unbalanced and to their disadvantage.

Valid point that I support.

  1. Aid for Trade should not be used for adjustment to trade reform and liberalization in a way that is against the will and wishes of the developing countries.

Valid point that I support

  1. Commitments to new aid for trade from the rich countries must represent fresh contributions, and not old money.

Valid point, a real risk. I share the concern.

  1. Aid for trade should not be made conditional upon success of the Doha negotiations.

Very valid point, that I support fully.

Thank you.