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UNIDO AND TRADE FACILITATION Strengthening the Supply Capacity
Trade, and the contribution it can make to poverty alleviation in developing economies, figures prominently on the international development agenda. Trade related capacity building is frequently mentioned as a priority. The final Declaration of the WTO Doha Ministerial meeting (which was warned by the G77 countries about the lack of technical assistance in recent years) in paragraph 41 reiterates the importance of technical assistance, reaffirming "the important role of sustainably financed technical assistance and capacity-building programmes". Unfortunately the focus of the international dialogue on trade related capacity building is still almost exclusively on building capacities in negotiating and in trade information aspects. This approach, even in conjunction in the total absence of tariffs and quotas, will not facilitate trade or enable market access for developing countries in a meaningful way. In reaction to the European Union "everything but arms" initiative, the UN Secretary General noted: ".... the LDCs (least developed countries) have neither the surplus of exportable products nor the production capacity to take immediate advantage of new trade opportunities. They will need substantial investment and technical assistance in order to expand their production" (Financial Times of 5 March 2001). If these conditions are not met, most targeted countries simply will not be able to reap the opportunities stemming from developed country market opening and will therefore miss out on the resulting benefits. The New Partnership for African Development (NEPAD), in contrast to the mainstream dialogue, does acknowledge that insufficient attention is paid to the technical infrastructure and capacity building required in developing countries in standards bodies and the productive sector, to comply with international standards and technical regulations. The NEPAD document elaborates a "Market Access Initiative" which includes diversification and increase of production, competitiveness, quality improvement, standards, technical regulatory frameworks, metrology, testing, accreditation and related capacities. The thrust of the UNIDO Monterrey proposals is to fill the gaps noted by NEPAD and Secretary General Annan. When the Secretary General refers to the need for products to be "exportable" and for the country to have the "production capacity", he is referring to the need for developing country products to respond to market demand and be able to comply with international standards and regulations, which in turn requires the developing country to have an internationally recognised quality and conformity assessment infrastructure and industry with competitive production lines. Given the volume and diversity of action required, the UNIDO proposal includes a funding strategy, part of which is a Trust Fund to which UNIDO has invited contributions and so far itself committed US$1 million. The idea that developing countries would need assistance to avoid technical regulations and standards becoming obstacles to trade, is nothing new. The Technical Barriers to Trade (TBT) Agreement and the Agreement on the Application of Sanitary and Phyto-sanitary Standards (SPS), both negotiated as part of the Uruguay round, address the matter directly. Article 12.7 of the TBT agreement specifically states: Members shall ... provide technical assistance to developing country Members to ensure that the preparation and application of technical regulations, standards and conformity assessment procedures do not create unnecessary obstacles to the expansion and diversification of exports from developing country Members. A special reference to the LDCs even strengthens this point. Similarly, Article 9 of the SPS agreement states that Members agree to facilitate the provision of technical assistance to other members, especially developing country Members, either bilaterally or through the appropriate international organizations. Such assistance may be, inter alia, in the areas of processing technologies, research and infrastructure, including in the establishment of national regulatory bodies, and may take the form of advice, credits, donations and grants, including for the purpose of seeking technical expertise, training and equipment to allow such countries to adjust to, and comply with, sanitary or phyto-sanitary measures necessary to achieve the appropriate level of sanitary or phyto-sanitary protection in their export market. However, so far only limited assistance has been provided. The strategy UNIDO presented at Monterrey to assist developing countries achieve the technical infrastructure and capacity required in standards bodies and the productive sector draws on UNIDO's experience in area of standards, quality and quality improvement, accreditation, metrology and certification since it was set up in 1966. The main focus of UNIDO has always been on the establishment and development of national capacities in these areas, as well as on specific applications such as food safety and targeted quality improvement activities. In recent years the interest has increased considerably, and most UNIDO integrated programmes developed in 1999-2001 include, at the request of governments and industry, components of the required infrastructure and strengthening of productive capacities and competitiveness. A major programme with the Union Economique et Monétaire Ouest Africaine (UEMOA) funded by the European Commission, is under implementation. Similar programmes are under development in cooperation with SADC, ECOWAS and CEMAC. Other preparatory work is being done for the Central American region, the Arab region and the countries of ASEAN (an overview on UNIDO's engagement with regional integration entitled Enabling Market Access, is available here for downloading or viewing). Similarly UNIDO has extensive experience in working at the sector level, providing various types of technical assistance to export oriented enterprises. Specially relevant are focused upgrading programmes that have been implemented in recent years, assisting sectors with upgrading products and productivity, continuous improvement programmes, application of special software tools etc. The first prong of the UNIDO strategy is to enable developing countries to rapidly establish the essentials of a quality and conformity assessment infrastructure. These comprise: a national/ regional standards/ standardization body; a national/ regional metrology system; a certification/ conformity assessment system; an accreditation system; technical support and information services; and a national capacity to implement the WTO agreements. Currently, although some developing countries have part of the requirements in place, in most cases, notably in the LDCs, major parts are missing, and even if services exist, they are usually not recognized internationally, and can therefore not fully assist potential exporters. Furthermore, because of these missing domestic capabilities, developing countries are not able to technically analyze and challenge importing countries claims in relation to exported products. Neither can they identify possible technical solutions to the problem. The approach and phasing of this process will vary considerably between countries where conformity assessment support services exist and have been operational on the one hand, and countries where these activities are still to be initiated. However close cooperation at regional level between countries may facilitate early effective availability of services. One important goal here is to assist developing countries in meeting the requirements to be in a position to reach Mutual Recognition Agreements (MRAs) with other developing countries. The second prong of the UNIDO strategy is to assist selected productive sectors with high export potential to upgrade product and production quality and comply with applicable standards and regulations so that they can export their products successfully. Intensive technical and managerial upgrading and other export related assistance to sectors and companies that have the ability and intention to export successfully, is explicitly combined with, and builds on the establishment of the quality and conformity assessment infrastructure. This approach is expected to ensure effective demand for the quality and export related services, the best stimulus to ensure their effectiveness. An effective combination of the two would evidently also have the highest impact in the short term in terms of increased exports. Sectors most likely included are food products, leather and textiles, all with good (export) potential in LDCs. Technical support will include assistance to selected enterprises in meeting ISO 9000, ISO 14000, HACCP and other relevant international standards, and in improving productivity and competitiveness. The third prong is a trouble shooting and advisory service. This component would establish a facility under which, at the request of an exporter and/ or the government of an exporting country, UNIDO would provide a technical analysis of products and production processes in cases where exports actually encounter a technical barrier. Based on this analysis advice, and if needed further assistance could be provided to find and implement a technical solution to the problem. Using this three pronged approach, a programme identifying country/ regional requirements would be draw up in close cooperation with the countries, (sub)-regional organisations, donors and other international organisations. Wherever possible, the coordination of national level activities and close cooperation and pooling of country capacities at the sub-regional level would be promoted. Such an inter-country approach would enable major economies of scale, reducing overall financial requirements. The overall approach proposed by UNIDO requires the cooperation with and involvement of two groups of international actors. On the one hand a number of specialist organizations operate at the global level in areas immediately relevant to the programme like standards, metrology etc. On the other hand, different international organizations, (including UNCTAD, ITC, WTO, FAO, WHO) have mandates and expertise closely related to the programme and complementary to UNIDO. Close cooperation already exists in many cases, and these networks will be developed and formalized further. WTO Director-General Mike Moore, in his first progress report to the General Council on the implementation of the Doha Development Agenda on 13 February 2002, stressed the need for swift action on technical assistance and suggested UNIDO as a strategic partner for WTO on trade facilitation (see story). To continue the momentum established at the Monterrey conference, UNIDO Director- General Carlos Magariños will elaborate further on UNIDO's proposals at the Conference on the Financing of NEPAD in Dakar Senegal, April 15 - 17, 2002. This conference was previously scheduled for last January but was postponed in order to take into account the conclusions of the Monterrey conference. Five African Heads of State (Presidents Bouteflika, Konare, Mbeki, Obasanjo and Wade) were invited last June by the G8 leaders during the Genoa Summit in Italy to introduce NEPAD and discuss its opportunities. The G8 leaders mandated follow-up work on NEPAD and appointed high-level personal representatives (France - Michael Camdessus; UK - Baroness Amos; Italy - Alberto Michelini; Japan - Shotaro Oshima; USA - Walter Kannsteiner; Germany - Uschi Eid; EU - Giorgio Bonacci; (Chair is with Robert Fowler - Canada)) to work with African counterparts and international partners on an action plan. The Dakar consultations will lead to the setting up of a framework for strategic partnership with the NEPAD implementation Committee during the G8 Summit in Canada, June 26 - 27, 2002. "Building a new partnership for Africa's development" is one of the three themes of the G8 meeting.
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Info: Adrie De Groot, Source: UNIDO |
