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EU Strategy on Aid for Trade


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By Liselotte Isaksson, DG Dev - Brussels, 5 December 2007

Published in: Economy & Finance, Business
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EU Strategy on Aid for Trade

  1. 1. EU Strategy on Aid for Trade Enhancing EU support for trade –related needs in developing countries Adopted on 15 October 2007
  2. 2. Presentation plan <ul><li>Brief background </li></ul><ul><li>Links AfT and Agriculture Development </li></ul><ul><li>Overall coverage of EU AfT strategy </li></ul><ul><li>Specific ACP angles </li></ul>
  3. 3. 1.Background <ul><li>EU Strategy </li></ul><ul><ul><li>Follow up to series of EU commitments to increase TRA (FfD: Monterrey 2002, G8: Gleneagles and WTO: Hong Kong, 2005) </li></ul></ul><ul><ul><li>Follow up to WTO AfT Task Force recommendations of summer 2006 </li></ul></ul><ul><li>EU drivers : </li></ul><ul><ul><li>delivery on financial pledges for all DCs </li></ul></ul><ul><ul><li>enhancing effectiveness and impact </li></ul></ul><ul><ul><li>resource mobilisation for ACP AfT in EPA context. </li></ul></ul>
  4. 4. EU distinguishes between TRA and wider AfT… <ul><ul><li>EC to reach Euro 1 bn in annual TRA in 2010 (average 2001 – 2005: ca Euro 860 million) </li></ul></ul><ul><ul><li>EU MS collectively to do the same (average 2001 - 2005: ca Euro 300 million) </li></ul></ul><ul><ul><li>Commitment refers to Trade Related Assistance: </li></ul></ul><ul><ul><li>1) Trade policy and regulation </li></ul></ul><ul><ul><li>2) Trade development </li></ul></ul><ul><ul><li>(Categories in WTO/OECD Doha Database) </li></ul></ul>
  5. 5. … but is supportive of both <ul><li>The WTO AfT Task Force widened the AFT agenda from “traditional” TRA to six categories: </li></ul><ul><ul><li>1) Trade policy and regulation </li></ul></ul><ul><ul><li>2) Trade development </li></ul></ul><ul><ul><li>3) Building productive capacities </li></ul></ul><ul><ul><li>4) Trade related infrastructure </li></ul></ul><ul><ul><li>5) Trade related adjustment </li></ul></ul><ul><ul><li>6) “Other” </li></ul></ul>
  6. 6. 2. Many links to agriculture development <ul><ul><li>Trade policy and regulation: trade negotiations, analysis and implementation of multilateral trade agreements, trade-related legislation and regulatory reforms (including TBT and SPS), trade facilitation including tariff structures and customs regimes, and support to regional trade arrangements. </li></ul></ul><ul><ul><li>Activities can improve regional agricultural market functioning by addressing structural weaknesses; can build regional markets in food commodities, including by enhancing regional capacities to comply with standards </li></ul></ul><ul><ul><li>2) Trade development: business development and activities aimed at improving the business climate, business support services and institutions, access to trade finance, trade promotion and market development in the productive and services sectors </li></ul></ul><ul><ul><li>Activities can support agriculture development by helping to strengthen agriculture sector governance (articulating roles and interactions of the state, private sector and civil society); access to remunerative markets by making use of niche and other market opportunities, etc </li></ul></ul>
  7. 7. 2. Links to agriculture development (ctd) <ul><ul><li>3) Building productive capacities. CRS proxy covers the range of support typically extended to the agriculture sector. </li></ul></ul><ul><ul><li>Can improve agricultural productivity </li></ul></ul><ul><ul><li>4) T rade related infrastructure (transport, energy, etc) </li></ul></ul><ul><ul><li>Can provide transport facilities required to access regional and international agricultural markets, as well as po st-harvest facilities, storage, fishing ports, physical markets and water management (irrigation etc) </li></ul></ul><ul><ul><li>5) Trade related adjustment. “ Assist implementation of recipients own trade reforms and adjustments to trade policy measures by other countries; assistance to manage shortfalls in the balance of payments due to changes in the world trading environment.” </li></ul></ul><ul><ul><li>Can help accomodate falls in tariff revenu which may result from regional trade liberalisation and facilitate regional market building for agricultural goods. </li></ul></ul>
  8. 8. 3. The EU AfT Strategy: five pillars <ul><li>1. Quantitative ambitions </li></ul><ul><li>- TRA </li></ul><ul><li>- Wider AfT </li></ul><ul><li>2. Pro-poor focus and quality </li></ul><ul><li>3. EU capacity </li></ul><ul><li>4. ACP specific angles (EPA context) </li></ul><ul><li>5. Monitoring and reporting </li></ul>
  9. 9. 3.1. Quantitative Ambitions <ul><li>Overall Aid for Trade: to be increased in coherence with increases in overall ODA </li></ul><ul><li>Signals the EU support to the wider AfTagenda </li></ul><ul><li>Trade Related Assistance : Euro 2 bn to be reached in 2010. </li></ul><ul><li>Wider Aid for Trade : “EU will …. continue and strengthen support for… development strategies which incorporate” these ODA areas </li></ul>
  10. 10. 3.1.1 Key means to increase volumes <ul><li>EU will encourage partner countries to include AfT priorities into PRS or other development strategies and implementation plans </li></ul><ul><ul><li>articulation of agricultural trade issues a challenge. </li></ul></ul><ul><li>EU to support this through enhanced joint policy dialogue, support to DC use of participatory processes. </li></ul><ul><ul><li>participation of agriculture sector a challenge (organisation etc) </li></ul></ul><ul><li>Special attention to countries/regions with no or little Trade and AfT in their national development strategies </li></ul>
  11. 11. 3.1.2 In LDCs, use the Integrated Framework (IF) <ul><li>Support LDC partners manage the IF and diagnostic (DTIS) study process; act as donor facilitator </li></ul><ul><ul><li>Should help stakeholder participation </li></ul></ul><ul><li>Use IF process to engage in policy dialogue to translate needs into PRS or equivalent </li></ul><ul><li>Ensure EU AfT takes account of needs identified during IF process </li></ul><ul><li>In non-LDCs, apply similar approaches ; stand ready to appoint EU facilitator </li></ul>
  12. 12. 3.2. Pro-poor focus and quality <ul><li>Promoting poverty impacts and sustainability </li></ul><ul><ul><li>Support governments incorporation of poverty and gender issues in trade needs assessment and action plans </li></ul></ul><ul><ul><li>Support governments and stakeholders incorporation of sustainability concerns into national trade strategies, </li></ul></ul><ul><ul><ul><li>including via the effective management of impact assessment processes </li></ul></ul></ul><ul><ul><li>Support partner countries capacity to manage multistakeholder consultations, in needs assessments and in designing and implementing trade and AFT strategies and programmes. </li></ul></ul><ul><ul><ul><li>support participation of SME associations and marginalised groups </li></ul></ul></ul><ul><ul><li>Explore possibilities for developing shared EU approaches to relevant sustainability claims system </li></ul></ul>
  13. 13. 3.2 Pro-poor focus and quality (ctd) <ul><li>Applying aid effectiveness principles </li></ul><ul><li>Step up efforts to prepare joint response strategies: “ take joint action… to respond to key AfT priorities identified through comprehensive needs assessments …” </li></ul><ul><li>Comprehensive approaches rather than fragmented actions </li></ul><ul><li>Increasing joint delivery (JD) </li></ul><ul><ul><li>Explore conditions where different JD mechanisms are relevant </li></ul></ul><ul><ul><li>Identify areas and countries with potential for increasing use of JD </li></ul></ul><ul><ul><li>Strive to increase use of JD significantly by 2010 </li></ul></ul><ul><ul><li>Explore further the role of budget support for AfT (indicators etc) </li></ul></ul>
  14. 14. 3.2 Pro-poor focus and quality (ctd) <ul><li>Upgrading AfT at regional level - strengthening support to the implementation of regional organisations’ (Ros) integration strategies. </li></ul><ul><ul><li>Support RO capacity to coordinate and organise stakeholder involvement </li></ul></ul><ul><ul><li>Support RO identification and prioritisation of needs </li></ul></ul><ul><ul><li>Respond to identified priorities, using joint delivery mechanisms where possible </li></ul></ul><ul><ul><li>Help translation of regional priorities into national implemention strategies </li></ul></ul>
  15. 15. 3.3 EU Capacity <ul><li>Exchange information on capacities </li></ul><ul><li>Exchange information on training events, seek to open them to eachother, or organise them jointly </li></ul><ul><li>Exchange info on best practice and expertise on key issues, such as AfT and poverty, AfT and indicators, use of different delivery modalities, approaches to multilateral activities etc </li></ul>
  16. 16. 3.4 ACP-specific angles: Volumes of TRA <ul><li>“ In the range of 50%” of the planned increase in TRA will be available for needs prioritised by the ACP. </li></ul><ul><li>Prerequisite to deliver : integration of trade into ACP national development strategies. </li></ul><ul><li>EU will enhance its dialogue on these issues at country level, with a view to achieving such integration by 2013 (new programming horizon) </li></ul>
  17. 17. ACP: Volumes of wider AfT <ul><li>Seek to increase wider AfT in manner proportionate to overall ACP ODA increase. </li></ul><ul><li>Continue and strengthen support to trade related infrastructure via increased support to national, regional and continental initiatives (priority: build on existing schemes ) </li></ul><ul><li>R einforce support to productive capacity building, (private sector and business climate stressed, relevant and complex for agriculture) </li></ul><ul><li>Contribute to the absorption of net fiscal impact… , in full complementarity with fiscal reforms </li></ul>
  18. 18. ACP-specific angles: effectiveness <ul><li>Support technical capacity of ACP institutions to design and manage regional programmes </li></ul><ul><li>Work together to support the identification of EPA related needs and the coordination of support activities (including national-regional interactions) </li></ul><ul><li>Participate in regionally owned funding mechanisms such as the regional funds </li></ul>
  19. 19. 3.5. Reporting <ul><li>WTO Global AfT review based on </li></ul><ul><ul><li>Global flows (OECD/DAC statistics) </li></ul></ul><ul><ul><li>Donor questionnaires </li></ul></ul><ul><ul><li>Partner questionnaires </li></ul></ul><ul><li>EU reporting </li></ul><ul><ul><li>in the context of annual Monterrey reporting </li></ul></ul><ul><ul><li>complementary to global review </li></ul></ul>
  20. 20. Next steps <ul><li>“ Implementation matrix” under preparation with MS. Identifying specific actions, levels of intervention, and “participating EU donors”. </li></ul><ul><li>Immediate efforts: reporting guidance, inventory of countries lacking trade strategies, guidance on joint delivery, inventory on joint delivery opportunities, guidance on poverty impacts; communication with field staff…; supporting the Enhanced Integrated Framework, etc </li></ul><ul><li>For the ACP, parallel work to map ongoing MS AfT to the different regions and trying to encourage closer collaboration in accompanying ACP and EPAs with AfT. </li></ul>