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1 Novembre 2002, Second Integrated Framework Mainstreaming Seminar

Trade policies cannot work on their own, Supachai tells development seminar

Trade policies must be linked to development and poverty reduction plans, if they are to drive growth, Director-General Supachai Panitchpakdi told the second seminar on “trade mainstreaming” on 1 November 2002. These seminars are part of a joint effort by six international organizations and the least-developed countries to integrate trade and development efforts. This is what he said:

On behalf of the Integrated Framework Working Group (IFWG), I am pleased to welcome you all to this second seminar on mainstreaming trade into development plans and poverty reduction strategies. As you already know, this seminar is jointly organized by the six core agencies (IMF, ITC, UNCTAD, UNDP, the World Bank, WTO), the two representatives of the least-developed countries and the two representatives of the donor community.

It is yet another important step in our collective efforts to improve on coherence and coordination in approaches, in policies, and in technical co-operation and capacity building activities. It provides us with the opportunity to focus on follow-up and implementation of policies, programmes and projects to which we have agreed in the past.

The primary objectives of this Second Seminar on Trade Mainstreaming are to:

  • explore the key issues involved in the effective integration of trade and development policies, drawing on experiences to date, including those under the Integrated Framework (IF);

  • understand how the IF process can be more effectively managed to increase the concrete benefits that it yields for least-developed countries;

  • examine how coordination can be improved at the country level, in particular amongst agencies, donors and beneficiaries; and,

  • examine how the benefits of the Doha Development Agenda (DDA) could be secured through actions to support trade reform and complementary policy measures.

To provide some context to your discussions, let me underscore what I see to be several critical points.

First, we all know that trade is the engine for growth and development.
However, to ensure that trade works for growth and development, trade policy and trade priority areas of action need to be critically anchored either in overall national development plans and/or in strategies for poverty reduction. In the absence of the effective integration of trade into development planning and strategies for poverty reduction, trade cannot work for development.

The Integrated Framework, focused on the LDCs (least-developed countries), is the principal mechanism in the international community today for mainstreaming (integrating) trade into development plans and strategies for poverty reduction. The current challenge in the IF process is with implementation and follow-up to the results of the diagnostic trade integration studies. The quality of the diagnostic studies have been welcomed and endorsed by all participants in the Integrated Framework Steering Committee. With regard to follow-up, modest success has been achieved in countries like Cambodia. In others, however, current experience suggests that the follow-up process needs to be better systematized and made more predictable. I hope participants will accord attention to implementation and follow-up, under the IF process, at this seminar.

Second, we need to be ever conscious of the fact that trade policies do not stand-alone. Mutually supportive companion policies are also necessary.      The effectiveness of trade liberalization and reform and the gains they yield are frequently dependent on associated and complementary policies, such as stable macroeconomic policies, pro-growth regulation and competition policy, investments in infrastructure, human resource development, governance and the rule of law. Effective trade mainstreaming is, therefore, linked to the ability of countries to address a “behind-the-border agenda”. It also depends on developing and sustaining a domestic trade policy set within the overall development policy of the country. Furthermore, the efforts of agencies, donors, and the LDCs in mainstreaming trade to the benefit of the LDCs, need to be linked to effective improvements in market access to enable the LDCs to take advantage of appropriate supply-side responses that will be stimulated through trade mainstreaming. Improvements in market access, therefore, remain indispensable.

Third, this second seminar needs to build on the results of the first seminar.      Several points were identified which remain essential and should, inter alia, be the focus of this meeting. For example, participants in the conclusions at the first seminar noted that trade should be mainstreamed into development plans and strategies for poverty reduction because it is part of a pro-poor, pro-growth and pro-development strategy. Country ownership is essential. Coordination amongst bilateral donors, within and between multilateral and regional agencies, and partnerships between the government and private sector require improvements. The Integrated Framework must be operated as a shared responsibility amongst donors, recipients and multilateral agencies. The trade negotiating capacity of the LDCs needs significant strengthening to enable them to effectively participate in trade negotiations. The trade-related technical assistance and capacity building needs of LDCs must be better coordinated and “scaled-up” to enable them to generate appropriate supply-side responses and to draw on the benefits and opportunities created by the rules-based trading system. I would like to urge participants to continue to focus on all these fundamental issues.

Fourth, we need to focus and relate the outcomes of our work, such as in this seminar, to the main goals set by the international community.
The Johannesburg World Summit on Sustainable Development (WSSD) was attended by well over 100 heads of state and/or government. It was my first international meeting as Director-General of the WTO. One point that was clearly made at the summit, amongst several others, was that we should relate our outcomes to already established international goals and to seek to implement those goals, objectives and targets. It is important that we support the achievement of Millennium Development Goals (MDGs) and all the other important UN summits and international conferences of the last decade. They constitute part of the shared responsibility of the international community.

Trade can make an important contribution to achieving the overarching Millennium Development Goal of poverty reduction. This is yet another reason why the effective implementation of the Integrated Framework is vital, and why trade priority areas of action need to be reflected in overall country development plans and strategies for poverty reduction.

This brings me to my fifth point namely, the urgency underpinning the on-going Doha trade negotiations and work programme.      Let me use this opportunity to briefly report to you on the state-of-play under the Doha Development Agenda. The last meeting of the Trade Negotiations Committee (TNC) took place on the 3rd and 4th of this month. Chairpersons of the various negotiating groups reported on the status of the negotiations in the negotiating bodies. The reports clearly showed that we had made a reasonably good start. However, it was also clear that much remained to be done and that time is moving rapidly. I expressed concern that the position of some delegations had not yet been sufficiently clarified. I would like to re-emphasize several points that I made at the last meeting of the TNC. We have now entered a substantive phase of the negotiations and engagement. It is only by accelerating our work and by discussing concrete proposals can real progress be made across the board. Time frames and deadlines need to be adhered to, and a sense of the negotiations as a whole needs to be established, and not simply focusing on individual key deadlines.

There are key deadlines that need to be met in December. These relate to deadlines on implementation matters, special and differential treatment for developing countries, and a solution to the problem of pharmaceuticals in those countries that lack sufficient manufacturing capacity. In March 2003, the system will be confronted with deadlines in the negotiations in agriculture, services, non-agricultural market access and dispute settlement. Individually, all these deadlines are important, but as I have stated, an overall sense of the negotiations needs to be established.

We must work to ensure that we successfully conclude the DDA work programme by the deadline of 1 January 2005. I believe that the Integrated Framework has key contributions to make in the successful completion of the Doha Development Agenda. These contributions will need to be based on two key areas: a) ensuring that trade is effectively mainstreamed into the development plans and strategies for poverty reduction, so that trade works for the development of the LDCs and to help reduce poverty; and, b) building the human and institutional capacity in the LDCs to enable them to participate effectively and meaningfully in the multilateral trading system and the global economy. The next meeting of the TNC will be in December, this year. I will continue to report to members and agency heads in my meetings and consultations with them.

Let me conclude by expressing my wish for two productive days in this second seminar. I hope that you will emerge with concrete recommendations and outcomes that will enhance the implementation of the Integrated Framework.