Speech by H.E. Pan Sorasak

WTO Deputy Director-General Valentine Rugwabiza,
Chair of Committee on Trade and Development (CTD), H.E. Erwidodo
Distinguished Members of the WTO and
Representatives of international organizations:

Thank you Mr. Chairman for the opportunity to brief the CTD about the Regional Technical Group on Aid for Trade in Asia and the Pacific (henceforth RTG). Joining me today in this briefing are Mr. Uyama, the Co-Chair of the RTG, and Dr. Wignaraja of the Asian Development Bank (ADB).
This afternoon, I would like to discuss four issues: (i) the imperative for Aid for Trade in the Asia-Pacific; (ii) the work of the RTG; (iii) highlights from the RTG Co-Chairs Report; and (iv) the way forward.
  

Imperative for Aid for Trade in the Asia-Pacific

As you are aware aid for trade has emerged as one of the most important agendas in the WTO along with trade liberalization. In part due to the large number of developing countries hampered by lack of production capacity and exports and therefore unable to reap the benefit from trade liberalization.

In this context, Asia can provide both lessons from success and as well as insights on future challenges. The Asia-Pacific is noteworthy for using trade-led growth for raising prosperity and pulling millions out of poverty. Asia has also been noteworthy for the rebound following the global financial crisis.

Nonetheless, at the same time, there are as much as 900 million people in the Asia-Pacific living on less US$1.25. This alarming figure of remaining poverty is equivalent to populations of several countries in other regions. Alongside giants like PRC and India, are 37 lesser developed countries. Some are land-locked with large trade costs, some are isolated small islands, some are large with weak trade capacity and lagging competitiveness and some are fragile states with political instability.

My own country, Cambodia, is counted among these lesser developed countries. We started economic reforms from a position of severe hardship. With the participation of a dedicated new generation, we made notable progress. However, the global financial crisis caused a tremendous economic shock and we lost quite a number of jobs and have to re-start and re-engineer our trade-led growth. In this context, I believe, Aid for Trade can play such a crucial role in our country’s economic recovery process and implementation of our trade strategy, in particular in this post-crisis period.
  

Role of Regional Technical Group (RTG) on Aid for Trade

The RTG is an integral part of the Aid for Trade Roadmap for Asia and the Pacific. It was a key result of the Aid for Trade Regional Review Meeting in Manila in 2007 and the two WTO Global Aid for Trade Review Meetings in Geneva.

Stewardship of the RTG under representatives of Japan and Cambodia was announced by ADB President Kuroda and WTO Director-General Lamy at the Regional Review Meeting on Aid for Trade in May 2009 in Siem Reap, Cambodia.

The announcement established RTG’s ownership by DMCs and donor countries, and highlighted their committed partnership. ADB acts as the Secretariat to the RTG.

The RTG works on three broad tasks: first, it is an informal regional forum on Aid for Trade issues. Second, it works on building partnerships among all the key players in the initiative, helping develop, share, and apply best practices for Aid for Trade projects. And third, it helps to formulate an integrated approach to operationalize Aid for Trade over the medium-term.

The RTG has met three times. The first in March 2009 at the ADB in Manila. The second meeting was held at UNESCAP in Bangkok in November 2009. And the third meeting was at Japan’s Ministry of Foreign Affairs in Tokyo in May 2010. The RTG also interacted by video-conference. The results of these consultations were shared periodically with the WTO Committee on Trade and Development and APEC Senior Officials Meetings.
  

Highlights from the RTG Co-Chairs Report

The first RTG Co-Chairs Report, Aid for Trade in the Asia—Pacific: Its Role in Trade-Driven Growth, reviews the diverse experience of the Asia—Pacific with a view to highlighting lessons and making suggestions. The RTG Co-Chairs Report is under preparation.

Several inter-related issues in relation to Aid for Trade in the Asia-Pacific are being considered in the RTG Co-Chairs Report. These includes links between investment and aid in the context of trade led development; Aid for Trade flows into the region; the relationship between regional and national strategies as well as lessons from good practice projects and programs; and the future direction of Aid for Trade in the region.

Some emerging findings from the Asia-Pacific’s experience are as follows:

1. The Asia-Pacific has a heterogeneous pattern of trade and development, which we call the two faces of Asia. Impressive success of newly industrializing economies co-exist alongside LDCs and small states.
2. Foreign direct investment (FDI) played a pivotal role in developing the export capacity of successful newly industrializing economies of Asia. FDI connected countries with emerging global production networks, transferred technology and skills, and developed marketing relationships.
3. These newly industrializing economies had adopted outward-oriented trade and investment strategies. ODA played a complementary role in supporting the development of an appropriate investment climate.
4. The key lesson from success in Asia therefore is that better strategy along with aid for trade matter rather than aid for trade per se.
5. Looking ahead, a regional approach backed by national strategies is the most effective way to close the gap between the two faces of Asia and to deploy aid for trade. In operational terms, this means supporting economic corridors including infrastructure, access to trade finance, upgrading competitiveness, building trade capacity and implementing reforms. Strong public-private sector partnerships are another key ingredient.
  

Way Forward

Our immediate goal is to complete the RTG co-chairs report and make it available as the region’s contribution to the 3rd Global Review meeting in Geneva next summer.

Next, we hope to move the RTG from its current pilot stage into a more sustainable process. Along with greater sustainability is an evolving work program for 2011 and beyond. A key aspect of the future work program is for closer dialogue and experience sharing between Asia and other developing regions. We hope that all of you will join us in the exciting and mutually beneficial new venture.

Thank You very much for your attention.