1. AITIC
The Integrated Framework (IF) for Trade-related Technical Assistance for LDCs

2. Structure of the Presentation
Why is the IF relevant to all developing countries?
Objectives of the IF
State of Play of the Reform: from the IF to the EIF
Implementation of the IF at country level
See A. page 1 of the handout!

3. 1. Why is the IF relevant to all Developing Countries?
Aid for Trade (AFT): New additional funds!
AFT must use the existing structures
LDCs have the IF
Non-LDCs do not have a ready-to-use structure for AFT
Pick and Choose Approach common to AFT and the EIF: Priorities defined by the government
It was envisaged to set up something similar to the IF for non-LDCs.
The IF is only for LDCs

4. The EIF, an Asset for LDCs in Implementing AFT…
LDCs should use the structures…
…and the assets of the IF/EIF
In LDCs, AFT coordination could be ensured through the IF governance structure.
The IF requires the integration of trade into national development plans: many LDCs which have gone successfully through the IF process have already mainstreamed trade.
Mainstreaming is also key in implementing AFT!

5. …And a Source of Inspiration for non-LDCs
The IF: A model for non-LDCs to implement AFT?
e-.g. to set up an AFT Committee

6. 2. Objectives of the IF
To mainstream trade into national development plans
To assist in the coordinated delivery of trade-related technical assistance.
Origin:
Recognition of the specific difficulties faced by LDCs at the first WTO Ministerial Conference (1996)

7. 3. From the IF to the EIF The Old IF (1997-2000)
1997: Adoption of the IF by six international organisations
Originally,merely intensified coordination between the six agencies and pooling of available resources.
= minimalistic approach
See B. page 1 of the handout
But a first evaluation of the IF concludes that results are modest with respect to the objectives and the ambitions

8. The Revamped IF ( )
Partnership between six Agencies, LDCs and Donors
Before, a coordinated framework!
The IF revamping:
Set up of an independent IF structure in order to institutionnalise the partnership between LDCs, donors and the IF agencies
Set up of a Trust Fund
A number of « responsibility centres » are created outside of the IF Agencies. See C. page 1 of the handout.
Within the IF, the agencies remain at the centre of the process:
The IFSC and the IFWG both comprise representatives from the six agencies
The Secretariat is part of the WTO
The Trust Fund is managed by UNDP
The WB and UNDP are key drivers of the DTIS formulation.
What is the DTIS? The DTIS is a study, conducted by the World Bank (in some cases by UNDP), of the overall trade and economic environment of a recipient IF country, which identifies the sectors of greatest potential.
Now an integrated framework!!

9. The Revamped IF- Key Elements
Diagnostic Trade Integration Study (DTIS)
Two project funding windows
Country-level structure and Geneva-based IF governance
1) (To cater for country-level shortcomings of the IF
A new tool is created to assist LDCs in integrating trade into national development plans: the DTIS. It is a needs assessment.
At country level, small-scale financing is made available through the fund to prepare the DTIS (window 1: USD 300’000 per country)
Definition of a country-level implementation process of the IF
3) Several Responsibility Centres at the local level: it includes a political level authority, a focal point and a donor facilitator.

10. From the IF to the EIF Evaluations: A deeper reform of the IF
December 2005: Decision to enhance the IF at the Hong Kong Ministerial Conference
July 2006: Endorsement of the task force Recommendations
Until today: Transition to implement the guidelines /fine-tune the governance structure
Second quarter 2008: Enhanced IF launch?
What has happened since then?
December 2005: same date as AFT.
Since May 2007, the IF interim Board drives the process

11. The IF Persistent Shortcomings
Resources
Country leadership
Coordination
Trade Mainstreaming
The mandate to reform the IF pintpoints the shortcomings of the system: (See quote E. page 2 of the handout)
In particular,
Lack of coordination between the recipient country and donors, as well as within the national administration
Loss of momentum at the local level following the DTIS validation
Few relevant projects (with an explicit link to trade) implemented

12. Remedies of the EIF
1. USD 170 million raised for the EIF =70 % of the targeted USD 250 million
2. Strengthening and clarification of the IF country-level architecture for increased LDCs leadership
1) September 2007: Donor conference in Stockholm, Sweden.
Only the resources for the Trust Fund
(Recipients need to obtain complementary bilateral contributions from their donors)
Success in ensuring that resources are increased and predictable.
Funds made available (through tier 1) in order to create/strengthen the national structure:
USD 2 million per country over a five-year period
This amount includes a maximum of USD per country and per year for the national implementation arrangements
2) NIU and NSC: clear separation of powers

13. Remedies of the EIF(cont’ed)
3. Better donor response thanks to the donor facilitator
+ Interministerial coordination
+ Stakeholder process
4. Incentives + Strengthening of national structures
3) Stakeholder process from the very beginning
4) Regarding trade mainstreaming, incentives have been introduced: for example, funds will be allocated to countries according to their record in integrating trade into national development plans. (of course, what about monitoring and evaluation?)
(Conclusion: Predictable and increased resources, stregthened in-country capacities and enhanced IF governance should improve the results of the IF. )
Important to remember: the IF is guided by the Aid Effectiveness Principles of the Paris Declaration on Aid Effectiveness.

14. Consolidation of the IF Architecture
1) At the global level:
IF Board: day-to-day business
Geneva-based IF Executive Secretariat
Regionally-based IF Trust Fund managed by UNOPS
See D. page 2 of the handout. The terms of reference of the diverse bodies are part of a detailed EIF modus operandi available on the website of the IF.
Consolidation at the global level:
The IF Board takes care of day-to-day business
An Executive Secretariat gives the IF an ear, more arms (permanent secretariat with more staff which plays the role of a helpdesk and a brain (delegation to the Secretariat of decision powers by the IF Board)
An IF Trust Fund which is independent from the agencies. For memo, the majority of national focal points criticised the limited efficiency of the fund under the UNDP management (low delivery rate).
Overall, quicker response!!
Which role is left to the six IF agencies? Key roles tend to be externalised in order to avoid conflicts of interest: UNDP keeps its privileged role due to its local presence in many LDCs, but leaves management of the Trust Fund to the UN Office for Project Services. The Secretariat is now independent from the WTO. Agencies must coordinate their actions and not anymore integrate the IF core functions.
Whether this works better, we will see…

15. Consolidation of the IF Architecture
2) At the local level:
National Implementation Unit: small team of experts to back the Focal Point
More intermediaries: e.g. interministerial committee
Appraisal Committees differentiated according to the type of projects
In the enhanced IF, emphasis is put on LDC ownership through a consolidated architecture:
Enhanced local structure (the focal point will be assisted by a technical team, called the national implementation unit)
More intermediaries to guarantee local coordination (in addition to the donor facilitator, a stakeholder process and an inter-ministerial committee will be set up)
In an effort to adjust the approval process to diverse types of projects, the appraisal committee will now be differentiated.
(Conclusion: Overall, strengthened responsibilities at the global level, reinforcement of the country role and modification of the roles of the agencies.)

16. 4. IF Implementation in LDCs : The 4 Steps
How does the IF work at the country-level? How is mainstreaming done? What are the steps leading to project implementation?
For non-LDCs, this gives an idea of the process towards the set-up of an AFT strategy!
The DTIS is the milestone and the main output of the IF process.
The four steps of the IF process will remain more or less the same in the EIF. However, the differentiation between Tier 1 and Tier 2 will entail certain changes at the implementation stage: the process leading to the approval of projects will be tailored to the type of project under examination.

17. Step 1: Request
Country request examined and aproved by the IF governing bodies
Signal of interest in the IF
Technical Review of the World Bank to assess the readiness of the country
The request should be presented to the IF Secretariat and then approved by the IF Board.

18. Step 2: Pre-diagnostic Phase
Establishing the local IF structure
+ World Bank Preparatory Mission
At the beginning of this stage, preparatory activities are organised by the IF agencies to sensitise the national authorities about the IF and reinforce their capacities.
The sequencing is flexible and requires adapting to the recipient country. In order to ensure ownership of the process at the country level, it is strongly advised to establish the national IF bodies as soon as possible. This is a key part of the IF process and LDCs which have not done so yet should set up their national structures ASAP.
At the end of step 2, recrutment of international consultants and local experts for the DTIS preparation.

19. Step 3: Diagnosis
The DTIS and the Action Matrix are prepared and validated by national stakeholders
(Typical elements of the DTIS include the country’s export performance; investment climate; the international policy environment and constraints faced in international markets; sectors with potential for trade expansion and poverty reduction; trade policy capacity; and a pro-poor trade integration strategy).
The DTIS is not a strategy but a diagnosis of the needs!
Recommendations from the DTIS should feed into national development plans, i.e. PRSPs.
The Action Matrix does not contain concrete project proposals.
At the end of step 3, a review of the DTIS by the government is crucial to ensure country ownership. Notably, priorities should be coherent with the national development strategy and corresponding adjustment should be made to the DTIS if needed.
How long to prepare the DTIS? Six to twelve months.
Ideally, the implementation plan should be started during the Validation Workshop to ensure adequate follow-up to the process and avoid the tendancy to lose momentum between steps 3 and 4.

20. Step 4: The Implementation
The Implementation Plan is finalised, and Tier 2 projects are prepared and launched
Note: at this stage only, costs and financing gaps associated with the priorities of the Action Matrix are identified.
Good practices to facilitate the implementation of the IF? (such as the organisation of retreats gathering all ministries deemed relevant in order to formulate projects)
What should be done at the earliest: To create a national trade basket fund to complement the resources available in the EIF.
How much per country in the EIF? Tier 1: USD 2 millions; Tier 2: USD 12 millions maximum over a five-year period.
But this is just a start: the most important is to obtain complementary funds from bilateral donors.
Is it possible/ advisable to establish a basket fund in every LDC?

21. DTIS Revision : A new Cycle
The implementation of the IF is an interative process.
The first DTIS was prepared prior to the integration of trade into PRSPs in a number of LDCs. In such cases, the DTIS gave the opportunity to include the trade dimension into the next PRSP and to set up a full fledged trade development strategy. Such a strategy will serve as a basis for the next DTIS.
In a nutshell, signal of interest, sensitisation, needs assessment, and implementation of small projects paving the way for wider AFT implementation.

22. Conclusions IF: EIF: Monitoring and Evaluation?
What can be done by non-LDCs?
So, in conclusion, the EIF should be more results-oriented. But can it curtail bureaucracy?
Which mechanisms for the Geneva-based governance to be accountable to LDCs? And how to measure the success of the EIF?
Contrast with the approach of AFT!!
What lessons can be drawn from the IF by non-LDCs?
The IF is a scheme to create aid absorption capacity at the local level. Non-LDCs need a national/regional AFT committee for national level coordination, and perhaps a national/regional basket fund approach. The IF provides a source of inspiration for this.

23. Conclusions
Fill in the questionnaire of the OECD/WTO on AFT
Financial/technical assistance to set up the National AFT committee?
Non-LDCs need to fill the AFT questionnaire to:
Send a positive signal to donors about the extent to which trade is mainstreamed (or in a process to be mainstreamed), and
Indicate the country’s priorities. Work done within the IF can be « recycled » or « copied » for the questionnaire.
The questionnaire asks the countries about their AFT strategies. Perhaps some ideas as to how to prepare one?
Need for financial/technical assistance to set up the National AFT committee?? e.g. EC
Trade basket fund to channel AFT?