WTO AID FOR TRADE TASK FORCE SUBMITS FINAL REPORT TO MEMBERS

The WTO Task Force on Aid for Trade tabled its final recommendations at a meeting of the General Council on 27-28 July, satisfying the July deadline set by the Hong Kong Ministerial Conference. Although WTO Members praised the recommendations, they did not formally adopt them, and have decided to consider the panel's report at the next meeting of the General Council, scheduled for October.

The Aid for Trade (A4T) Task Force was established in February with a mandate to provide Members with recommendations for how A4T "might contribute most effectively to the development dimension of the Doha Development Agenda."

The panel's nine-page final report states that A4T is about "assisting developing countries to increase exports of goods and services, to integrate into the multilateral trading system, and to benefit from liberalised trade and increased market access." It aims, for example, to enhance growth prospects, reduce poverty, "and distribute the global benefits more equitably across and within developing countries."

Sources said that the report received a positive response at the meeting. Delegates commended Chair Ambassador Mia Horn af Rantzien (Sweden) for finding a balance between divergent opinions on the panel, and thanked both her and Deputy Director-General Valentine Rugwabiza for their work.

One developing country noted that all of the concerns it expressed in comments on previous drafts of the recommendations text had been "accommodated satisfactorily" in the final version.

Striking a balance

The recommendations stress the need for additional, predictable, and effective financing. In particular, the final version balances the interests of potential recipient countries and donor countries, such as the US, by underscoring the importance of measuring the additionality and adequacy of funding available to meet A4T needs, as well as taking stock of "what is being done."

The Task Force has been adamant that A4T be defined in a way "that is both broad enough to reflect the diverse trade needs identified by countries, and clear enough to establish a border between Aid for Trade and other development assistance of which it is a part."

The report emphasises the need to mainstream trade-related issues into national development strategies. It identifies a number of challenges involved with doing so, such as the lack of private-sector involvement in identifying trade needs, the limited absorptive capacity of recipient countries, ineffective monitoring, and the slow, duplicative and bureaucratic processes in the assessment and delivery of trade-related assistance.

The Task Force suggests that "country ownership and country-driven approaches, as well as a commitment of governments to fully mainstream trade into their development strategies, is key." It emphasises mutual accountability, aligning aid to national development strategies, effective donor coordination, harmonization of donor procedures, and transparency.

Supply-side central to A4T

The A4T task force made clear that building productive capacity and trade-related infrastructure in developing countries should be a major part of A4T efforts, in addition to assistance aimed at helping countries negotiate and comply with trade agreements.

The report underscored the need for donors to strengthen their trade expertise, and focus more on trade issues in their aid programming. Among other things, it recommended that donors integrate trade and growth issues more effectively, use needs assessment processes, and make targeted funds available for building infrastructure and removing supply-side constraints. The Task Force also asked donors to consider channelling A4T funds multilaterally.

Matching supply and demand

The recommendations address the implementation of A4T at the national, regional and global levels. They emphasise the need for national coordination, suggesting that a 'national aid for trade committee' could be created to coordinate development assistance, data collection and analysis, and cooperation between agencies, donors, regional banks, and governments.

At the regional level, the Task Force recommends strengthening processes to identify cross-border and regional needs, as well as the ability of donors and agencies to respond to them. It asks countries to explore the merits of establishing a 'regional aid for trade committee," since cross-border infrastructure and regional policy cooperation are necessary to trade effectively. The report points to the September meeting in Singapore of the World Bank and International Monetary Fund's joint Development Committee, which will address support for regional, sub-regional and cross-border needs.

The Task Force said that some activities are best carried out at the global level, such as data collection, knowledge creation and sharing, channelling donor funding, and matching and brokering unfunded needs with available money.

Making sure it works: monitoring

The panel recommends convening a monitoring body in the WTO to conduct a global review of A4T based on reports from stakeholders, including those from recipients, the donor community, regional and multilateral agencies, and the private sector. It also recommends that mechanisms to facilitate reporting should be enhanced, including notification processes for WTO members.

Finally, Task Force outlines several steps for how to proceed with work on A4T, calling on Members to "expeditiously implement" its recommendations. It also asks WTO Director-General Pascal Lamy to refer to the report during his consultations aimed at securing "additional financial resources for A4T." The panel also requests Lamy to set up an 'ad hoc consultative group' to follow up on its recommendations.

Civil society organisations warned that some donor countries might try to make A4T conditional on other concessions and use the mechanism to replace other forms of assistance. One NGO source noted that if WTO members can "manage to pull anything out at this stage, then it's positive."

Director-General Pascal Lamy is expected to meet this week with Gordon Brown, UK chancellor of the exchequer, in preparation for the World Bank/IMF meeting in September.

The A4T task force

The task force is composed of 13 members -- Barbados, Brazil, Canada, China, Colombia, the EU, Japan, India, Thailand, the US and the coordinators of the ACP (African, Caribbean and Pacific) Group of States, the African Group and the LDC (least-developed countries) Group (see BRIDGES Weekly, 8 February 2006).

The recommendations have evolved over the course of Task Force meetings, as well as informal consultations with other WTO Members, international organisations, and other stakeholders. (see BRIDGES Weekly, 19 July 2006).

ICTSD reporting; "It will take years to revive trade talks," THE GUARDIAN, 31 July 2006.