WTO NEWS: SPEECHES — DG PASCAL LAMY

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First Global Aid for Trade Review — Geneva

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Welcome to this first Global Review of Aid for Trade. We have a lot to accomplish — and not much time to accomplish it — so I will keep my remarks short.

As you all know, the WTO is about making trade possible. Our core business is to create trade opportunities through multilateral trade opening and the building of multilateral rules to ensure a level playing field.

But, we also know that removing obstacles to trade is often not enough for countries to reap the benefits of trade opening, including the ones that will come as a result of a successful conclusion of the on-going negotiations under the Doha Development Agenda, whose conclusion is now in sight for 2008.

To fully benefit from further trade opening, countries require the right domestic policy framework, institutional capacity and economic infrastructure to be in place. This is as much a reality in the North as it is in the South, in the East as well as in the West.

It would be fair to say that developed countries have the possibility to mobilise the resources needed for that and that their business has the capacity to pursue and exploit fully the opportunities presented by trade opening.

In many developing countries, though, these resources come in the form of development assistance. And this is where aid for trade comes in. We see aid for trade as central to helping developing countries move from making trade possible to making trade happen.

Almost two years ago — at the 2005 Hong Kong Conference — Ministers gave the WTO a mandate to help developing countries, especially the least developed, build the trade capacity they need to take advantage of trade opening. They did this in the belief that this could contribute to achieving their development goals.

To implement this Hong Kong ministerial mandate, last year I outlined a plan for mobilising and monitoring Aid for Trade. This plan was based on the collective efforts of a Task Force of WTO members and multilateral donors. It involved global tracking of financial flows, self assessments by partner and donor countries, three high-level regional meetings, and a series of “periodic reviews” in the WTO Committee on Trade and Development. These various threads would be woven together in a Global Aid-for-Trade Review and debate in the General Council.

Today we are seeing the culmination of the work for 2007.

In a moment I will ask the OECD Secretary General to present the joint WTO/OECD report Aid for Trade at a Glance 2007. The report gives a comprehensive picture of Aid-for-Trade flows from 2002 to 2005 — the last year for which data is available, and just before the G-8 Summit in Gleneagles and Hong Kong commitments to development aid started to take effect. Like everything, it can be refined and improved — as discussed in yesterday's technical workshop. But overall, I think it provides us with a clear snapshot of global Aid for Trade flows and a solid baseline from which to measure future progress. I want to thank the OECD for their excellent work.

The report also analyzes the Aid-for-Trade self assessments — 30 from donor countries, 8 from recipients and 10 from international agencies. The results are important. Just as important was the process of arriving at the results. It had the effect of encouraging ministries and agencies to start an internal dialogue about Aid for Trade, to reflect on their goals, and to ask themselves if they can do better. These self assessments provide an important tool for advancing Aid for Trade, which I hope can be expanded, especially for partner countries, in 2008.

Next key multilateral and bilateral agencies will be given an opportunity to explain what they are doing to advance Aid-for-Trade. We want to hear their priorities and plans — including plans for scaling up financial assistance and improving their own trade capacity — both in country and at headquarters.

Then in the afternoon and tomorrow morning we will hold three regional “roadmap” sessions — on Latin America and the Caribbean, on Asia and the Pacific, and on Africa — moderated by the President of the Inter-American Development Bank, the Vice President of the Asian Development Bank , and the Executive Secretary of the UN Economic Commission for Africa respectively — and including key recipient and donors countries. The aim is to focus on specific regional priorities — especially Reports and Recommendations of the Regional Reviews — and to suggest some practical steps for taking the Aid-for-Trade initiative forward.

The Global Review will end on Wednesday with a debate in the General Council where we will be looking for feedback and input from all Members about next steps for the WTO, including how we can improve monitoring and especially evaluation.

Aid for Trade is a complex subject. Every country has its own needs and priorities. There are a multitude of players covering a multitude of policies. But despite this complexity, some common themes have emerged from this first year of monitoring which are worth mentioning.

First leadership. No grand plan to expand trade capacity will ever work unless developing countries want it, unless they “own” it, and unless it advances their national interests. The only successful trade-lead development strategy is one which is created and executed by countries themselves — and which is mainstreamed in national plans. Responsibility ultimately rests with you.

Second, priority setting. The challenge for countries is to decide on the projects that matter most and that will deliver the biggest return on investment. Having one hundred priorities is having no priorities. To move forward, we need clear objectives and deliverable plans.

Third, thinking regionally. Many capacity and “connectivity” problems — especially for small or landlocked countries — are regional in scope. We can help Rwanda construct the best transport corridor in Africa. But unless it is connected to an equally effective transport corridor in neighbouring Uganda, Kenya or Tanzania, Rwanda will remain cut off from world markets.

Fourth, increased and predicable financing. Donors have a responsibility for increasing the overall financing envelope — by following through on their Monterrey, Gleneagles and Hong Kong pledges. It is up to recipient countries to decide whether this new money is spent on trade or some other priority.

Fifth, mobilizing the private sector. It is business - not governments — that trade. So for this initiative to work, we need to involve the private sector directly in telling us where the problems lie, in helping to devise the solutions and — with a bit creativity and the right incentives — in providing some of the resources through public-private partnerships.

There was another theme — the most important — that ran throughout the years' discussions. It is that trade, investment and domestic reform are the main drivers of economic growth and development. Aid for Trade can — and must be - an important complement to a successful Doha Round with development as a central pillar. But, let me be clear and frank on this, it can in no way be a substitute.

The challenge now is to take what we have learned about Aid for Trade over the past year and apply it to concrete solutions. That is why you are here. To tell us the solutions, to outline your plans, and to explain how you plan to implement them.

It has never been the goal of the WTO to direct or dictate how Aid for Trade should be delivered. We are not a development agency. Except for our involvement in training, we have little specific expertise and limited resources. We have no intention of becoming another development agency in an already crowded development field.

However, we do have a role and a responsibility for ensuring that our Members — especially the least developed among them — can benefit from the trade opening and strengthened rules we are working so hard to negotiate. We are undertaking monitoring but not for monitoring's sake. We want to create a forum, a dialogue, a “spotlight” — you choose the metaphor — to encourage all of the key actors to honour commitments, meet needs, improve effectiveness, and reinforce mutual accountability. Political scientists would probably describe this as open method of cooperation. Bottom up incentives to come up with collaborative solutions.

This “spotlight” is working. In this room we have ministers, senior officials, heads of multilateral and regional organizations gathered together to answer one question — how to expand the trade capacity of developing countries? We all agree that trade can be a powerful engine of development — China, India, Brazil, South Africa and many others are living proof of this reality.

We agree that making trade possible is only half of the challenge — making trade happen is the other half, which requires infrastructure, technology, know-how, financing and competitive exporters. And we agree that the future of an open world economy — and the multilateral trade system that underpins it — depends on all countries sharing in the benefits more equitably.

This year has been a long and eventful journey — one which has literally taken us around the world in our efforts to mobilize more and better Aid for Trade. We must stay focussed on that fundamental objective. That is why we are here. That is the benchmark against which our success — or failure — will be measured. I am looking forward to a constructive discussion — and to setting out a roadmap for the next part of the journey.

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