> Pascal Lamy’s speeches
Session 24: Closing Statement
At the beginning of the week, I mentioned some statistics: 1,400 registered; 54 plenary sessions and side events; 800 pages of analysis.
As we close these three days of proceedings, let me give you some additional statistics. Over 40 ministers and representatives of agencies attended; over 300 of you have participated as speakers; a Memorandum of Understanding between the WTO and the Economic Commission for Africa was signed; one country — the Comoros — has announced its memorandum on foreign trade regime, bringing it one step closer to becoming a WTO member; 27 development partners signed a pledge to support capacity building for trade facilitation; we’ve had 3,000 bottles of beer at the brewing the difference event; I’ve had three cups of Ethiopian coffee and anticipate having at least two bowls of Cambodian rice for lunch; I’ve watched one fashion show and what is surely a highlight — sang one song on stage with the Minister of Culture of Cape Verde, Mário Lúcio Matias De Sousa Mendes.
It has not just been three days of numbers and reports and analysis but it has been three days of experiences. By any metric, we achieved the objectives we set ourselves over the past three days. And all with one aim in mind: making trade work for development. I thank you all sincerely for your engagement at this Fourth Global Review.
I take four distinct impressions away from this review: engagement, partnership, convergence and results. Let me expand on each.
The mandate given by members on Aid for Trade in Hong Kong in 2005 was to the Director-General of the WTO. Both myself and Valentine Rugwabiza have since been the public faces of the Aid for Trade initiative. But the work, both with respect to the planning and implementation, has been done by many others.
Our main tasks have been twofold: to promote Aid for Trade and to periodically review it. To do so in collaboration with a growing number of partners — most notably the OECD.
Bringing together the broad community engaged in Aid for Trade policy and implementation has been challenging but extremely rewarding. Rewarding because the results have been remarkable but rewarding also because of the broad geographical coverage and involvement. Not only is there engagement here in Geneva; it is also out there on the ground in the different regions and countries, where it is needed. This Fourth Global Review has shown how deeply rooted in the day-to-day realities Aid for Trade has become. And the engagement is broadening. Partner countries have greater choice with new partners, notably with South-South partners becoming increasingly more involved. And, as the joint report with the Confederation of Indian Industry highlights, the private sector is starting to play a critical role.
The participation of the private sector in this Global Review has been a revelation. The business input has been experience driven and focused on what the priorities and expectations are on the ground. As one of the speakers said, “in essence, it is the private sector that knows where the shoe pinches” and we have benefited from that perspective in every session over the three days.
The value of the Aid for Trade initiative in 2013 has exceeded the expectations we had when it was launched in 2005. One of the most concrete examples of this is the depth and breadth of the sustainable partnerships that have been formed. Aid for Trade has been an instrument of coherence. The United Nations organizations, the Bretton Woods institutions and the regional development banks have collaborated around Aid for Trade as a platform for growth in developing countries. We have advanced coherence in global economic governance in a very practical manner.
This same cooperation has been clearly seen at all levels — global, regional and local — between the public authorities and the private sector, between countries and regional economic communities, and between agencies in-country such as the trade, development and finance constituencies. It has been a template for partnership and confirmed the high value of establishing national, regional and global consultative mechanisms focused on connecting the reality on the ground with the policies at the domestic, regional and international level.
Two examples of this partnership are with the Enhanced Integrated Framework and the International Trade Centre. One only had to walk through the EIF exhibition or attend the ITC event on small and medium size enterprises (SMEs) to know that Aid for Trade is at the heart of their work. The EIF is the gateway to Aid for Trade for the least developed countries (LDCs). It is an incubator that helps to build the institutional capacity and confidence to allow LDCs to better identify and elaborate their trade-related priorities. From mangoes and cashew nuts to textiles, music and honey, the EIF has been the greatest interlocutor of Aid for Trade with the LDCs. The ITC’s work with the private sector, in particular SMEs, in helping them to identify and overcome barriers to trade and to develop new and exciting markets for their products and services is truly Aid for Trade in action.
The other impression I take away from this event is that of convergence. Convergence on challenges: the challenges developing country firms face to connect or add value, the challenges of getting the policy environment right, of sustainable development, of regional cooperation.
I also heard convergence on opportunities. The opportunity that Aid for Trade offers to connect firms to local, regional and global value chains; that growing South-South trade offers for new trade connectivity; that services offer for value addition; that trade can offer for women’s economic empowerment; and the opportunity that the infrastructure deficit offers for engaging the private sector.
Looking at the challenge of connectivity through the lens of value chains makes Aid for Trade more, not less, relevant. Aid for Trade has also engendered convergence between trade and development; trade and aid; domestic issues and international issues; and helped address the disconnect between business and policy makers. This blurring of the frontiers between these concepts and the value of connecting these strands cannot be underestimated: it has not led to any one dominant philosophy or interpretation of trade, development or economic policy but has instead resulted in a more dynamic and inclusive approach to making trade work for growth, employment and poverty reduction.
The greatest examples of this I have seen are on the ground when I visit countries — developed, developing and LDCs. Developed countries are better mainstreaming trade into their development cooperation; developing and least-developed countries are increasingly seeing the value of embedding trade in national and regional priorities and one common perspective in all of my interactions in countries is that Aid for Trade helped to build the legitimacy of that coherence agenda on the ground. Aid for Trade may have had its genesis in a top-down approach but it is now led from the bottom-up: it has morphed into a true demand-driven initiative.
What about the results? What have we achieved during this period?
Economists are fond of counterfactuals. In layman’s language, this is the alternate hypothesis. Let us apply it to Aid for Trade. What would have happened if we had not launched the initiative in 2005? If everything had stayed as it was? What would have been the outcome?
- On resource mobilization, fewer resources would have been mobilized. Aid for Trade spending in 2011 would have been US$ 26.5 billion (the baseline period number), not US$ 41.5 billion — 57 per cent lower. Over the period 2006-2011, that means US$ 77.5 billion less committed and US$ 42 billion less disbursed. That is a lot of North-South corridors, Meso-American highways and infrastructure in the Greater Mekong sub-region that may not have happened. Would these have been built anyway? Maybe. But I firmly believe that we made it easier by making the case for the resources to be approved by governments.
- On mainstreaming, we have catalogued progress in getting developing countries to bring trade into their national development plans, with each successive edition of “Aid for Trade at a Glance”. From the slim 80 pages of the first edition in 2007, we have thickened out to over 400 pages. Seven partner countries replied to the first monitoring questionnaire in 2007; that number was 80 in 2013 — and 36 were least-developed countries. Not only is the quality of reporting improving, so are the results. This monitoring shows clearly that trade is being mainstreamed into overall development planning, policies and activities. Mainstreaming needs political will and when I look at what has worked and in which countries, it has been where the political commitment to making trade work for development has been the most constant; where ministerial engagement has been sustained the most; where buy-in from the private sector has been built; and where we have local ownership of Aid for Trade.
- The African Union has adopted an Action Plan to Boost Intra-regional Trade. The Caribbean has launched an Aid for Trade strategy — so too has COMESA, Central Africa and various other regions. Aid for Trade focused on regional projects tripled in value to reach US$ 7.7 billion in 2011. The IADB has a lending target for regional programming. Would these have happened anyway? Maybe. But again I believe the initiative made it easier.
- The private sector has told us clearly that it sees shared value in addressing many of the issues that Aid for Trade is designed to tackle. Grow Africa and the Cashew Alliance show how aid and investment can make the aid dollar go further — and make it more sustainable. The business sector should be seen not just as a service supplier in the development context. It should also be recognized for its potential as an independent actor — as an adviser and dialogue partner. As an investment partner. Just think of the work on Better Cotton.
- On monitoring and evaluation. We have now collected abundant evidence that the large sums mobilized on Aid for Trade are being well-spent. They result in lowering trade costs and improving trade performance.
I can say with confidence and conviction that we have operationalized Aid for Trade. We have achieved much more than what we expected when we launched the initiative in 2005. I can say with certainty that the recommendations that the Aid for Trade Task Force made to the General Council in 2006 have been fully implemented. Based on the output and impacts since the initiative was launched, it is clear that we have built a formidable pool of opportunities.
Listening to countries transform their challenges into opportunities has been one of the most important deliverables. Seeing land-linked instead of landlocked; seeing vulnerability as an impetus to strive for greater stability; using traditional culture and knowledge as exportable products and services; leveraging challenges as a platform for opportunities. This is one of the greatest outcomes of this process.
The way forward
So what is next?
Based on what I have heard over these three days, I would like to suggest that we focus on sustaining progress with two main targets in mind: bringing trade costs down while adding value to developing country trade.
One, sustaining progress.
As many of you have said this morning, much has been achieved since the start of the initiative in 2005. We cannot afford to lose the momentum which you have so painstakingly built. Hence, the focus on commitments and aid flows must continue. Pledges on future funding have been given. We need to continue monitoring them and to keep making the case for mobilizing resources. And here I believe our strongest argument is a simple one. Aid for Trade is not charity — it is an investment in future trade and trading partners. It brings benefits for both.
We also need to see Aid for Trade more in the context of other development finance flows to ensure that Aid for Trade attracts investment, as we have heard from Anabel Gonzalez this morning, and additional sources of funding. Similarly, the focus on the private sector must continue.
There can also be no let-up in our efforts to improve the business climate, since both trade and investment flourish in a conducive business environment. So in short, we must continue to deliver more of what we have so successfully done in the last eight years. To get better and smarter at making the case for it.
Two, bringing trading costs down.
The second point that I would like to stress also comes from what we have heard in the different sessions; from the private sector in our monitoring exercise; and especially from members this morning. The discussions have brought some key areas into focus:
- access to finance — and trade finance in particular
- trade facilitation
- standards setting and compliance
- business and investment climate
- skills, as clearly evidenced by my discussion with ILO Director-General Guy Ryder
What binds these issues together is how they influence trading costs. Low-income countries do not mean low-cost environments. The costs of trading can be very high. High trading costs lock firms out of value chains even when the product or service may be competitively priced.
In the coming years, the focus must be to bring down these costs especially for the SMEs through effective and targeted Aid for Trade.
Three, adding value to developing countries.
We must also upgrade the exports from developing countries. Ensuring that developing countries can continue to expand their participation in value chains and use this as an enabler of adding value to goods and services. Where one can add value is sometimes counter-intuitive. Where exactly does your comparative advantage lie? How can it be leveraged? Proper analytical tools have to be available and this is probably an area where technical assistance can be improved.
We also must frame our work in the post-2015 agenda context in such a way that it is measurable, traceable and so that we are all accountable. The post 2015 development agenda offers an opportunity to embed the Aid for Trade initiative in a global initiative that we all share and are committed to deliver on.
As I bring this Fourth Global Review of Aid for Trade to a close, I have to state that although this was an initiative that was mandated to lead in 2005 as a complement to market access openings, in 2013 I can truly say that Aid for Trade is your achievement. It is you the members and the partners that have committed the energy, the dedication and the engagement. What started as a top-down initiative has truly become a bottom-up and results oriented programme. Aid for Trade is truly a part of the global trade and development architecture and as I listen to your statements this morning and over the past three days, it is clear that your investment in Aid for Trade will continue. Your call for a renewal of the mandate on Aid for Trade at the Ninth Ministerial Conference and a new work programme which reflects the realities of the way you trade today and the new priority areas for the future have been well heard. Political will has been, and will be, a key to the success of the Aid for Trade initiative, and I am sure we will see a member-driven reiteration of this political will at Bali.
In concluding, I would like to thank the WTO Secretariat for the way it has helped to support, sustain and widen the parameters of work on Aid for Trade. A special mention to all of the staff throughout the Secretariat that made the event such a success and also kept the rain away — I believe that last feat may have been achieved by my Chief of Staff Arancha! Valentine Rugwabiza, my Deputy, has been at my side throughout this whole process. Aid for Trade is her legacy as well and she deserves the largest part of the credit many of you have given to me since Monday. To the Aid for Trade team — in all of its various iterations — but always led by the Director of the Development Division Shishir Priyadarshi, I give my thanks. Specifically to Michael Roberts, Debbie Barker, Aime Murigande and the members of the development division. I also thank the staff in my office.
It has truly been a collaborative effort.
And finally, to you the WTO membership. I thank you for your commitment. Aid for Trade is an investment in people, in systems, in governance, in partnerships. The WTO is a member-driven organization. Aid for Trade has become a partner-driven initiative. This I think is our main achievement. My hope for the future is that Aid for Trade keeps helping to update the WTO agenda.
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