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    Aid for Trade: Montreux Meeting Brings Business Voice to Aid for Trade Assessments

     

     
     
    International Trade Forum - Issue 2/2007, © International Trade Centre

    From trade policy to project design, listening to the voice of business is the key to making sure that Aid for Trade really boosts exports.

    Business association leaders from Africa, Asia, Europe and Latin America met with trade experts in Montreux, Switzerland in June to shape ideas on how best to channel foreign aid to help developing countries boost their exports. The three-day dialogue on "The Private Sector and Aid for Trade" was organized jointly by ITC and the International Centre on Trade and Sustainable Development (ICTSD), a Geneva-based non-governmental organization.

    "We are very happy that ITC and ICTSD are organizing this dialogue with the private sector, which is a very important stakeholder in Aid for Trade," said Valentine Rugwabiza, WTO Deputy Director General.

    A WTO-led Aid for Trade task force has made a series of recommendations on how Aid for Trade can best contribute to helping countries develop their economies within the context of the Doha Development Agenda.

    The Montreux dialogue explored the task force's view that the private sector has an important role to play in Aid for Trade. According to the task force, "an increased dialogue between the public sector and private entrepreneurs would improve effectiveness in assessing aid for trade needs, in diagnostics and in implementation as well as in evaluating effectiveness in implementation."

    Bringing business into the equation



    The Montreux dialogue concluded that Aid for Trade programmes should look to the private sector as:

    • partners in designing and executing projects;
    • trade policy advocates; and
    • beneficiaries of widely accessible export management and financing programmes.
    Two case studies - on customs operations in Ghana and a cold storage facility in Mali - showed that bringing business in as partners helped boost export competitiveness. Understanding the issues related to slow customs procedures and spoilage of fresh produce was important for all parties. The Aid for Trade process helped kick-start dialogue between business and government, provide seed money and open up new ways to make operations efficient and financially sustainable.

    A case from Zambia showed how Aid for Trade helped start up trade policy advocacy through a business organization. Participants saw value in bringing in the views of all organizations representing business, including microbusiness and SMEs (small and medium-sized enterprises), and in training private sector representatives to acquire the analytical skills they need to advocate effectively on trade policy issues.

    Cases from Peru and Uganda showcased management training for small businesses and for the national trade institutions that work with them. Access to finance also remains a constraint. The key is to design programmes that are available to a wide range of SMEs, so that such programmes are not construed as market distortion or subsidization.

    "This dialogue is an excellent example of the hands-on collaboration between our organizations," said Ricardo Meléndez-Ortiz of ICTSD.

    WTO series of regional reviews



    Later this year, WTO will undertake a general review of Aid for Trade activities in conjunction with regional development banks - the Inter-American Development Bank, the African Development Bank and the Asian Development Bank. The review will be preceded by three regional assessments in Africa, Asia and Latin America/Caribbean.

    WTO has requested ITC to bring the business sector viewpoint to these assessments, based on its successful experience in introducing business participation to the negotiations process among developing countries. The Montreux dialogue was the first step in the process to help the private sector contribute effectively to these regional reviews.

    See also:http://www.intracen.org/mts Select "Round Tables".

    Contributors: Rajesh Aggarwal, Julie-Anne Lee, Natalie Domeisen, ITC.



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