UNSIA Newsletter Issue 2, November 1998
UNCTAD, in joint action schemes, spreads trade benefits to Africa
Among the most important elements in addressing Africa's economic recovery and development is strengthening the capacity of African countries to expand their trade and maximize the benefits from greater integration in the international trading system. Africa's share is less than 2% of total world trade and equivalent to some 7% for developing countries as a whole. The figures for sub-Saharan Africa represent half of the above. The challenge for expanding Africa's trade is multifaceted ranging from human resource development and institution-building, to strengthening supply capacities and taking advantage of new market opportunities created by the WTO agreements. It is with these objectives in mind that the UNCTAD/WTO/ITC Integrated Programme for the Least Developed and other African Countries was launched.
The Programme covers the following countries: Benin, Burkina Faso, C"te d'Ivoire, Ghana, Kenya, Tunisia, Uganda, and the United Republic of Tanzania. Complete project documents have been prepared and approved by both beneficiaries and donors. In Tunisia, project implementation is already under way. The training of trainers for project activities in the four English-speaking countries was completed in December 1997 and will shortly get under way in the French-speaking countries.
An inter-institutional agreement setting out the details of how the three agencies will cooperate in the Programme has been agreed and signed by the executive heads of the organizations concerned, thus putting into place the requirements for a truly joint exercise. Both UNCTAD and ITC have assigned a senior staff member to work full time on the implementation of the Programme and other staff to work on the Programme on a part-time basis. Informal discussions are currently under way on the extension of the Programme to cover other African countries. It is expected that these will be primarily, although not exclusively, LDCs.
Funding
In order to implement the Programme, WTO, UNCTAD and ITC launched a Common Trust Fund for technical assistance to Africa in the trade sector on 1 March 1998. The Fund is aiming to attract around $10 million to cover programme requirements for the seven sub-Saharan partner countries, and will consist of two windows. Window I is for unearmarked contributions, which will be used to finance national needs assessments, project development and advisory missions, activities for the collective benefit of participating countries, and complementary or full financing of country projects. Window II, for earmarked contributions, will be allocated to specific country projects. Managed by ITC, the Fund will be guided by a steering group consisting of donors, beneficiary countries and the secretariats of ITC, WTO and UNCTAD.
To date, the governments of the following countries have indicated an intention to contribute to the Fund: Denmark, Finland, France, Germany, Japan, the Netherlands, Norway, Sweden, Switzerland and the United Kingdom. The objectives of the Fund are: to develop national capacity to address the WTO agreements; to strengthen trade and export policy and negotiating capabilities; to improve institutional mechanisms to carry out the WTO agreements; to develop a supplyside response to opportunities in a multilateral trading system; and to improve access to export business services and performance tools.
A high-level meeting was convened in Geneva from 27 to 28 October 1997. The report of the meeting is contained in document WT/COMTD/12, issued by WTO on 12 November 1997. The meeting covered issues related to market access and the Integrated Framework for Trade-Related Technical Assistance, including for human and institutional capacity-building, to support least developed countries in their trade and trade-related activities. The high-level meeting endorsed the above-mentioned Integrated Framework for Trade-related Technical Assistance. Country round-tables
An important feature of the high-level meeting was the convening of 12 round-table meetings. Presentations by the LDCs concerned covered each country's needs for trade-related technical assistance and an integrated response to these needs by UNCTAD, WTO, ITC, UNDP, the World Bank and the International Monetary Fund (IMF).
UNCTAD played a leading role in the preparations for the two thematic round-tables on "Building the capacity to trade in LDCs" and "Encouraging investment in LDCs". The main background documents for the round tables were prepared by UNCTAD and ITC.
Follow-up
Since the meeting, the governing bodies of UNCTAD, UNDP, IMF and the World Bank have endorsed or taken note of the outcome of the meeting; needs assessment exercises have been carried out in several African LDCs; and meetings held of the interagency coordination mechanisms. An administrative unit is being established in ITC to coordinate the implementation of the Integrated Framework for Trade-related Technical Assistance.
Trade, investment and industry linkages
At the seventh meeting of the Steering Committee of the SIA, UNCTAD was requested, in collaboration with UNIDO, to take the lead in organizing an interagency technical meeting to discuss specific efforts by various agencies to promote trade, investment and industrial development in African countries. While a rapid growth of manufactured exports could make a significant contribution to growth of total exports in a small number of African countries, for most countries export growth will continue to rely on natural resource based products. Such an expansion may be attained in two ways: first, by increasing productivity and output in some fairly traditional products and regaining market shares; second, by diversifying into more dynamic processed primary products. Since these depend on technological change and the creation of additional production capacity and hence on new investment, a sustainable growth process requires mutually reinforcing dynamic interactions between capital accumulation and exports resulting in structural changes in the pattern of production and exports. This would not be feasible without considerable investment in the primary sector, as well as in human capital and infrastructure, which inevitably leads to the question of the resource gap for most African countries. The objective of the suggested meeting is to elaborate the links between trade and investment and industrial development and to provide information on what each agency is doing in the above areas and identify concrete opportunities for complementary actions and optimizing synergies under the aegis of the UNSIA. UNCTAD and UNIDO have agreed to organize a one-day technical meeting on 9 November 1998 in Geneva with participating agencies.
In addition to the interagency cooperation described above, UNCTAD is cooperating closely with UNDP and other organizations in various programmes of assistance in trade-related areas.
Other areas of activity include policy research and analysis as well as a joint venture with the OAU/African Economic Community (AEC) secretariat and UNDP in setting up an institutional negotiating mechanism to support African governments in the ongoing and future WTO trade negotiations.