1. Aid for Trade Progress on the Initiative in 2007 and Report on the Mandate to ECA Stephen N. Karingi Chief, Trade and International Negotiations Section, UNECA

2. 2 Introduction An important development-oriented outcome to date in the Doha Round process. Africa’s common position of 2006 incorporated in the AFT initiative. African Ministers of Trade have emphasised that for effective operationalisation, Ministers of Finance involvement is critical.

3. 3 Why Aid for Trade? Recap… Africa still lags behind despite recent growth rates. Africa’s global integration remains an imperative if it is to benefit from opportunities generated by globalisation. Improved productive capacities, competitiveness, low transactions costs, good infrastructure, and regional integration are essential for Africa’s global integration. Aid for Trade is an important catalyst for integration.

4. 4 Why AFT? Its scope respond to Africa’s challenges Constraints to trade policy & regulations. Trade development: business services; finance and investment. Trade related infrastructure e.g. roads Building productive capacity for diversification. Meeting adjustment costs to trade reforms

5. 5 The ECA mandate COM 2007 endorsed the initiative due to the relevance of its scope and objectives. –It viewed it as a critical component within the global development partnership. COM 2007 mandated ECA (with AUC & AfDB) to support African governments define new mechanisms for utilising AFT.

6. 6 Progress on the AFT in 2007 Key highlight was the African and Global Reviews of the AFT. The African Review in Dar-es-Salaam was organised by UNECA, ADB, WTO and Government of Tanzania. Broad participation. –34 African Ministers of Finance and Trade. –Key donors and international agencies. –Private sector. –More than 400 participants.

7. 7 Objectives of the African Review Meeting Underline trade’s central importance to achievement of Africa's development goals. Identify key priorities for strengthening capacity and increasing trade. Emphasise the importance of comprehensive trade strategies (regional as well as national). Highlight the need for increased and effective financing; and Secure political commitment on the way forward.

8. 8 Key issues discussed in African review Integration to global economy a central objective: –Will generate necessary resources for social priorities. –Small size of national and even sub-regional markets make international trade indispensable. While indispensable, openness not sufficient: –Stronger supply-side capacities; lower trade “costs”; improved connectivity to markets needed. –“Internal barriers” such as poor infrastructure, inefficient customs, unreliable supply chains; high energy costs impede competitiveness.

9. 9 Key issues discussed in African review (continued) Africa needs access to modern “infrastructure” for transport; customs; and standards testing laboratories. Regional approaches critical to optimal results. Political leadership and commitment the key. International community should play supporting role

10. 10 Cross cutting themes out of the African Review Country leadership. Focus on regional projects. Identify few key priorities. Improve trade logistics. Mobilize private sector. Harness public private partnerships. Leverage regional development banks. Increase and improve financing. Ensure coherence and cooperation.

11. 11 What it will take for the initiative to succeed in Africa Leadership key to success of the Aid for Trade Initiative Appropriate delivery mechanism also key to success Need to focus on priorities identified by stakeholders For Africa these include: –Effectively dealing with infrastructure constraints –Trade facilitation issues –Building capacities of Regional Economic Communities (RECs) –Participation and involvement of the private sector –Building effective public/private sector partnerships

12. 12 Key recommendations by African countries on next steps Broad-based ownership in understanding and implementation of AFT. Completion of the mapping out of African trade constraints eligible for AFT. African AFT action plan. African AFT network. Development of national and regional plans. Progress report in Autumn 2008.

13. 13 2008 Aid for Trade Roadmap Objective –Increase developing countries ownership; –Shift emphasis to monitoring implementation; and –Develop performance indicators and strengthen self-evaluation. Strategy for 2008 AFT roadmap at three levels: –Global monitoring; –National and sub-regional reviews; –Regional Aid for Trade Networks –Global Review in 2009 –Report regularly to Committee on Trade and Development.

14. 14 ECA’s strategy for Aid for Trade in Africa In order to advance AFT, there is need to identify clear “clusters of activities” in line with the broad priorities from the AFT African regional review. Success will depend on strength and breadth of partnership with other actors in Africa. National and sub-regional ownership of action- plans and mapping out of priorities critical.

15. 15 Clusters of ECA Activities Coordination –Working with WTO, AfDB and AUC the ECA to assist in creation of proposed “Aid for Trade Network”. Capacity building for trade –ECA to help in countries’ and regional economic communities mapping out their priorities and develop Aid-for-Trade action plans. Monitoring and evaluation –Together with AfDB and AUC, the ECA to help in preparing the Progress Report in 2008 for Africa.