WTO AID-FOR-TRADE REGIONAL REVIEW HELD IN TANZANIA

The WTO 'aid-for-trade' initiative held its final 'regional review' in Dar es Salaam this week, in an attempt to mobilise support for giving African countries the financial and technical assistance they need to boost their capacity to use international trade as a tool for economic development, job creation and poverty reduction

Held on 1-2 October, The conference in the Tanzanian capital followed similar gatherings last month in Lima and Manila (see BRIDGES Weekly, 26 September 2007). The regional meetings were meant to build towards a 'global review' of aid-for-trade scheduled for 20-21 November at WTO headquarters in Geneva.

The conference covered issues ranging from rich country farm subsidies to agricultural safety norms, investment, competitiveness, and relatively high cost of doing business on the continent.

"We have heard the problem is not a lack of competitive firms, but the lack of a competitive economic system," said WTO Director-General Pascal Lamy in an address to participants. "If we can address this problem, Africa can compete with the world." Africa's share in world trade is estimated at 3 percent.

As an illustration of how modest aid-for-trade investments can yield major rewards, Lamy pointed to Kenya's flower export sector. While pesticide residues had once kept Kenyan flowers out of US and EU markets, a 5 million euro grant from the EU helped Kenyan industry phase out the pesticides and emerge as one of the world's leading exporters. The sector earned over $700 million last year, and employs two million workers, four-fifths of them on small-scale farms. And since industrialised countries did not subsidise flowers (and thus make it hard for developing countries to compete), Kenya's industry is well-positioned to continue its success, Lamy concluded.

Further discussion aimed to garner aid and technical support to help developing country exporters comply with food safety standards, which would help them boost exports while minimising risk to consumers. The WTO has asked rich nations for $25 million over the next five years in order to fund the WTO's Standards and Trade Development Facility, which since 2002 has helped developing nations adjust to food safety standards.

Lamy concluded the meetings by emphasising that "aid-for-trade is a complement and not a substitute for new, fairer trade rules," in a reference to the importance of the ailing Doha Round trade talks.

ICTSD reporting; "Aid for Trade helps Kenya's flowers bloom - WTO," REUTERS AFRICA, 2 October 2007; "Africa: Aid for Trade Could Help Producers in Poor Countries," All Africa, 2 October 2007.