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Lamy says Aid for Trade Global Review now preeminent forum for trade and development

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18 June 2013
Lamy says Aid for Trade Global Review now preeminent forum for trade and development

Director-General Pascal Lamy, in a speech to the Joint WTO-OECD Workshop on the 2013 Aid for Trade Monitoring and Evaluation Exercise on 18 June 2013, said that preparations are on track for the 4th Global Review of Aid for Trade to be held on 8-10 July 2013. He noted that 36 ministers and heads of agency are expected to participate in the review, which will have 24 plenary sessions and 31 side events. “Over 800 pages of analysis have been prepared for the review”, he added. This is what he said:

“Laying the Groundwork for the 4th Global Review”

With less than three weeks to go to the Fourth Global Review, I am happy to report to members that arrangements are 95 per cent in place. To use a marathon analogy, we have gone through the wall and the finish is in sight. The Aid for Trade team in the Secretariat and at the OECD have worked commendably on the preparation and I know that you the members have responded in kind.

This Review will be my last one as Director-General of the WTO. Aid for Trade has truly become a global partnership and part of the trade and development vernacular since it was launched in 2005.

I saw this first hand last week in Haiti at the launch of the Aid for Trade Strategy for the Caribbean. It reminded me of the first regional review of Aid for Trade in Lima in 2007 at which President Moreno of the IADB and I set out the case for Aid for Trade in the region. In Haiti, there was no discussion of definitions or philosophies. It was instead a focus on deliverables and how Aid for Trade could be made to effectively work for economic growth and regional integration. I understand this was also the case at the Central African Regional Review in March and during a recent trip to East Africa I saw how Aid for Trade was being used to improve processes and procedures at the border.

The Global Review will be a fitting way to conclude my work on Aid for Trade as Director-General of the WTO. It will generate a new dynamic to take this crucial work forward, starting with the Ministerial Conference in Bali but projecting itself in the future.

The programme for the Fourth Global Review totals 20 pages in length. Let me give an overview in numbers:

36 ministers and heads of agency
31 private sector participants
in total, 150 speakers across 24 plenary sessions
and a similar number across the 31 side events.
In addition to the panel discussions, we will have music, we will have photo exhibitions, we will have a beer festival and we will have a fashion show. With this fourth edition, I think we can reasonably claim to have established the Aid for Trade review as the preeminent multilateral forum for discussing the relationship between trade and development.

Some more numbers. Over 800 pages of analysis based on submissions from members, agencies and the private sector have been prepared for the Global Review that will be available online at the event. The purpose of today’s event is to run you through these documents, so I will limit myself to some key messages.

Firstly, the starting point for developing country policy-makers’ outlook on value chains is how to add value and how to move up the value chain.

Secondly, another strong survey message from the private sector is that a series of constraints stop them joining and moving up value chains. Issues related to access to finance, customs procedures, lack of regulatory certainty, labour skills and standards compliance were all cited strongly. These are all areas where Aid for Trade can help — and where tangible results can already be shown.

The survey responses also make clear that moving up the value chain means giving more weight to services. And with the new research on measuring trade in value added showing the growing importance of services in total trade output, it is clear that services are critical to adding value. This is especially important for developing countries and least-developed countries that have a potential comparative advantage to harness services as a platform for growth and employment.

Thirdly, partner countries see private investment, both foreign and domestic, as the main source of financing to connect their firms to value chains.  The private sector itself is also engaged in an increasing range of value chain development activities. We also know that foreign investment now towers over traditional aid flows and that trade-related capacity building from South-South partners is increasing annually. But these investment flows also tend to be narrowly focused, particularly in LDCs, and South-South assistance remained under-reported in some cases. Aid for Trade can help leverage these flows.  This has always been one of the cornerstones of the Aid for Trade agenda: not just growing the development assistance envelope but using it as a leverage to exponentially increase the support flowing to developing countries from multiple sources.

Private sector supply chain activities can also be further encouraged and it is clear from the responses to the monitoring exercise that the private sector is doing just this. This supports moving towards an Aid and Investment for Trade approach — an approach that sees Aid for Trade in the context of other development finance flows.

Looking ahead to the rest of today and then on to 8-10 July, there will be plenty of opportunity to develop these ideas further.

What I wish to ensure is that Aid for Trade emerges stronger from the Review. Fit for the challenge of connecting developing country firms to value chains — and helping them to add value. An initiative strong enough to weather the expected strain in traditional donor funding and that it is flexible enough to respond to the changing conditions of trade.

In this context, let me cite the recently published report of the High Level Panel of Eminent Persons on the Post-2015 Development Agenda. In their report, the panel calls for “a profound economic transformation to end extreme poverty and improve livelihoods”. Aid for Trade has and will continue to make a contribution in this regard. Trade is a critical part of this “transformative shift” — and Aid for Trade is a way to make it happen.

I will further elaborate on some of these ideas at the Review. I encourage you to work with the Aid for Trade team to feed the messages you would like to see coming strongly out of the Review. Today’s workshop and tomorrow’s Committee on Trade and Development meeting will help map these issues for you.

I wish you fruitful deliberations and I am happy to take any questions which you may have.

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