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Making the most of aid for trade Making the most of aid for trade
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Steve Brady, director, customs and trade facilitation, Crown Agents, Sutton, United Kingdom. @crownagentsSteve Brady, director, customs and trade facilitation, Crown Agents, Sutton, United Kingdom. @crownagents
We must go beyond the building of physical infrastructure: Our experience in delivering trade facilitation and border management programmes across Africa and elsewhere confirms the view that trade facilitation goes beyond the building of physical infrastructure. We are of the firm opinion that to achieve best value-for-money and sustainable outcomes from such investments the institutional, legal, procedural and human factors are just as critical – if not more so.We must go beyond the building of physical infrastructure: Our experience in delivering trade facilitation and border management programmes across Africa and elsewhere confirms the view that trade facilitation goes beyond the building of physical infrastructure. We are of the firm opinion that to achieve best value-for-money and sustainable outcomes from such investments the institutional, legal, procedural and human factors are just as critical – if not more so.
Comprehensive trade facilitation reform is more effective than isolated or piecemeal reform: The potential cost reduction of all the trade facilitation measures combined is greater than the sum of their individual impacts – almost 14.5% for low-income countries and 15.5% for lower-middle-income countries.Comprehensive trade facilitation reform is more effective than isolated or piecemeal reform: The potential cost reduction of all the trade facilitation measures combined is greater than the sum of their individual impacts – almost 14.5% for low-income countries and 15.5% for lower-middle-income countries.
Frans Lammersen, principal administrator, OECD, Paris, France. @OECDdevFrans Lammersen, principal administrator, OECD, Paris, France. @OECDdev
Aid for trade is working: Econometric analysis suggests that bilateral aid for trade is broadly correlated with increases in trade performance. This report calculates that $1 in aid for trade is associated with an increase of nearly $8 in additional exports from all developing countries, $9 for all low and lower-middle income countries and $20 for International Development Association (IDA) countries (see: Aid for Trade at a Glance 2013).Aid for trade is working: Econometric analysis suggests that bilateral aid for trade is broadly correlated with increases in trade performance. This report calculates that $1 in aid for trade is associated with an increase of nearly $8 in additional exports from all developing countries, $9 for all low and lower-middle income countries and $20 for International Development Association (IDA) countries (see: Aid for Trade at a Glance 2013).
Ingredients for a successful aid for trade programme: Based on our research, we found several critical factors: ownership at the highest level supported through the active engagement of all stakeholders; adequate and reliable funding; leveraging partnerships (including with the providers of south-south co-operation); and combining public and private investment with technical assistance.Ingredients for a successful aid for trade programme: Based on our research, we found several critical factors: ownership at the highest level supported through the active engagement of all stakeholders; adequate and reliable funding; leveraging partnerships (including with the providers of south-south co-operation); and combining public and private investment with technical assistance.
Harriet Lamb, CEO, Fairtrade International, Bonn, Germany. @HarrietLambFTHarriet Lamb, CEO, Fairtrade International, Bonn, Germany. @HarrietLambFT
We cannot be starry eyed about business: Because some parts of the private sector can behave badly, we need standards, effective state and market institutions. Only then can we manage to make trade tackle poverty.We cannot be starry eyed about business: Because some parts of the private sector can behave badly, we need standards, effective state and market institutions. Only then can we manage to make trade tackle poverty.
It is important to get local support: All infrastructure schemes must be underpinned by good multi-stakeholder involvement so that affected communities will want to maintain them. Aid for trade which leads to land grabs as it has in Ethiopia are totally unsustainable and must be stopped.It is important to get local support: All infrastructure schemes must be underpinned by good multi-stakeholder involvement so that affected communities will want to maintain them. Aid for trade which leads to land grabs as it has in Ethiopia are totally unsustainable and must be stopped.
Collins Apuoyo, sector leader for agriculture, SNV Netherlands, Harare, Zimbabwe. @ApuoyoSNVCollins Apuoyo, sector leader for agriculture, SNV Netherlands, Harare, Zimbabwe. @ApuoyoSNV
Make sure your programme benefits smallholder producers: Looking back at my experience with smallholder producers, there are five key issues that results in these communities being excluded from mainstream trade: lack of relevant skills, limited or no access to key production inputs including finance, limited participation in high value markets, and lack of voice. Any trade facilitation that does not address any of these issues will have impact at the macro-level, but will not have any substantive impact at the level where it is required most.Make sure your programme benefits smallholder producers: Looking back at my experience with smallholder producers, there are five key issues that results in these communities being excluded from mainstream trade: lack of relevant skills, limited or no access to key production inputs including finance, limited participation in high value markets, and lack of voice. Any trade facilitation that does not address any of these issues will have impact at the macro-level, but will not have any substantive impact at the level where it is required most.
Anders Aeroe, director, International Trade Centre (ITC), Geneva, Switzerland. @AndersAeroeAnders Aeroe, director, International Trade Centre (ITC), Geneva, Switzerland. @AndersAeroe
Resource: While the private sector needs to start adapting to environmental challenges, the cost of doing this is particularly high for SMEs. For example, while certification standards in relation to carbon emissions is a legitimate concern and increasingly requested as information on purchases by consumers, this requirement is often a challenge for producers in developing countries to meet, who may not know how to get certified. ITC has a large programme that identifies and advises on private sustainability standards and also has programmes which provide capacity building for enterprises to meet these environmental standards.Resource: While the private sector needs to start adapting to environmental challenges, the cost of doing this is particularly high for SMEs. For example, while certification standards in relation to carbon emissions is a legitimate concern and increasingly requested as information on purchases by consumers, this requirement is often a challenge for producers in developing countries to meet, who may not know how to get certified. ITC has a large programme that identifies and advises on private sustainability standards and also has programmes which provide capacity building for enterprises to meet these environmental standards.
Junior Lodge, director, ACP multilateral trading system programme, Brussels, BelgiumJunior Lodge, director, ACP multilateral trading system programme, Brussels, Belgium
The rise of global value chains spurs the need for even greater trade facilitation: Without this developing countries will remain at the base of the trade pyramid with economic value captured by others. This is a factor behind developing countries more emphatic embrace of trade facilitation measures. Yet another factor stems from a countries' economic profile. For example, the small vulnerable economies of the Caribbean by definition have high trade costs. Additional trade facilitation measures is one way of attenuating those inherently high costs.The rise of global value chains spurs the need for even greater trade facilitation: Without this developing countries will remain at the base of the trade pyramid with economic value captured by others. This is a factor behind developing countries more emphatic embrace of trade facilitation measures. Yet another factor stems from a countries' economic profile. For example, the small vulnerable economies of the Caribbean by definition have high trade costs. Additional trade facilitation measures is one way of attenuating those inherently high costs.
Arjan de Haan, programme leader, International Development Research Centre, Ottawa, Canada. @IDRC_CRDIArjan de Haan, programme leader, International Development Research Centre, Ottawa, Canada. @IDRC_CRDI
We need a context specific understanding of the link between trade and development: Research has shown that the impacts of trade are diverse, and that the conditions under which countries – and regions, groups, and people within countries – participate in trade matter a great deal. International collaboration thus has a role to play in helping shape these conditions, and help countries prepare for possible negative impacts. Local research, carried out by in-country researchers, is critical for understanding these conditions and impacts. This is why IDRC has supported research on, for example, trade and poverty in Ghana, and networks of researchers in Latin America and Asia. The growing importance of climate change and need to move to a greener economy also highlights the need for a better and context specific understanding of the link between trade and development.We need a context specific understanding of the link between trade and development: Research has shown that the impacts of trade are diverse, and that the conditions under which countries – and regions, groups, and people within countries – participate in trade matter a great deal. International collaboration thus has a role to play in helping shape these conditions, and help countries prepare for possible negative impacts. Local research, carried out by in-country researchers, is critical for understanding these conditions and impacts. This is why IDRC has supported research on, for example, trade and poverty in Ghana, and networks of researchers in Latin America and Asia. The growing importance of climate change and need to move to a greener economy also highlights the need for a better and context specific understanding of the link between trade and development.
Aaron Cosbey, senior adviser, trade and investment, International Institute for Sustainable Development, Rossland, BC, Canada. @IISD_newsAaron Cosbey, senior adviser, trade and investment, International Institute for Sustainable Development, Rossland, BC, Canada. @IISD_news
Resource: In the context of aid for trade it's not so much a matter of how the private sector can adapt to climate change as how we can ensure that programming is sensitive to future expected impacts. That's a straightforward, but difficult matter of due diligence in the planning process. There are tools such as Cristal that can help bring these kinds of considerations into programming, as well as bring in local environmental impacts of actual projects.Resource: In the context of aid for trade it's not so much a matter of how the private sector can adapt to climate change as how we can ensure that programming is sensitive to future expected impacts. That's a straightforward, but difficult matter of due diligence in the planning process. There are tools such as Cristal that can help bring these kinds of considerations into programming, as well as bring in local environmental impacts of actual projects.
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