Topics handled by WTO committees and agreements

Building trade capacity

Developing countries face special difficulties in benefiting as they should from the multilateral trading system. This page describes the efforts made by WTO to meet their special needs by building “trade capacity” to enable them to trade more effectively.

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See also:
> More on “Coherence” (working with other organizations)

> Definitions of “developing countries” and “least-developed countries” in the WTO

More on development

 

News  back to top

  

Introduction  back to top

Helping developing countries participate more fully in the global trading system is one of the WTO's most important activities. Those developing countries which trade successfully tend to be those which have made the most progress in alleviating poverty and raising living standards. But there are countries, including a large number of least-developed countries (LDCs) where trade is failing to make the contribution that it should be making to economic growth and poverty reduction.

The main thrust of WTO work to redress this is the Doha Development Agenda, but Members have recognized that building trade capacity is an essential complement to the DDA.

There are a variety of ways in which the WTO provides assistance to build trade capacity in developing countries, but instructing  developing country delegates on how their countries can gain through the trading system is the central focus of the organization's efforts. The vast bulk of WTO “technical assistance” spending is dedicated towards helping officials better understand complex WTO rules and disciplines so that they can implement WTO agreements in ways which will bolster their trading regimes and negotiate more effectively with their trading partners. Broader and more effective dissemination of such knowledge has facilitated the participation of  developing country trade officials in the Doha round and in other WTO activities.

Enhancing trade capacity involves other forms of assistance too, including building more efficient ports and road networks, providing customs officials with automated equipment and teaching entrepreneurs how to take advantage of business opportunities in the global marketplace. Work of this nature is largely the responsibility of other international organizations like the United Nations and the World Bank. Some programmes, particularly those involving infrastructure, require significant funding not only from international organizations but also direct contributions from national governments. To be truly effective, any  programme of trade capacity building requires all these elements to come together in a co-ordinated fashion. For this reason many WTO activities in this area involve close co-operation with other international organizations.

Assistance to developing countries has always been on WTO's work schedule, but the scale and scope have become much broader with the Aid for Trade initiative.

  

Why is building trade capacity important?  back to top

Because many countries simply don't have the human, institutional and infrastructural capacity to participate effectively in international trade. Without that, these countries won't be able to expand the quantity and quality of goods and services they can supply to world markets at competitive prices.

  • human capacity refers to the professionals governments rely on for advice on WTO matters: trade lawyers, economists, skilled negotiators. A country that lacks these professionals is clearly at a disadvantage when implementing existing trade agreements, when negotiating new ones, and when handling trade disputes.

  • institutional capacity refers to the institutions businesses and governments rely upon for trade, such as customs, national standards authorities, and the delegation representing the country at the WTO. Trade ultimately suffers if these institutions are inadequate.

  • infrastructure refers to the physical setup required for trade to happen: roads, ports, telecommunications. Again, countries lacking infrastructure will find it difficult to develop trade.

The WTO's trade rules, negotiating forum and dispute settlement system are not  goals in themselves. They are necessary preconditions for free and predictable trade, but are not always sufficient to create results. WTO Members have recognized that the multilateral system needs to be accompanied by improvements in trade capacity.

  

The mandate  back to top

The WTO mandate to carry out technical cooperation activities is provided for in various WTO agreements and decisions. This mandate was clarified and further enhanced in several paragraphs of the Doha Ministerial Declaration.

Doha mandate
Doha mandate explained
Special and differential provisions
Hong Kong Ministerial Declaration (paragraphs 52-54)

 

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Aid for Trade Events

Facts

About two thirds of WTO's members are developing or least-developed countries

About CHF 30 million is budgeted annually for technical assistance activities > More
  

  

Big numbers for Aid for Trade

In 2009, Aid for Trade reached approximately US$ 40 billion, an increase of 60% in real terms since 2005.