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    Trade Development: Involving the Business Community


    © International Trade Centre, International Trade Forum - Issue 2/2003

    Market access and a rule-based world trading system are prerequisites for trade growth. But alone, they generate no trade at all - traders do. Let's help the private sector to become the active trade development player it ought to be.

    At the WTO General Council meeting in May, Messrs. Supachai, Wolfensohn and Köhler all stressed the importance of increasing market access and strengthening the rules-based trading system to achieve financial stability, economic growth and poverty reduction. No one questions the validity of these authoritative views.

    While market access and a rules-based trading system are absolute prerequisites for increasing trade, they alone generate no trade at all. Traders do. My questions are simple. Are we sufficiently aware of this, do we have an open and frank dialogue with the business community, and are we making appropriate efforts to engage its dynamism and creativity in the overall development effort?

    Business people in the South, just like their counterparts in the North, have to play a more central role in achieving economic growth and reducing poverty. This being said, in some countries the private sector is nascent and firms are often inexperienced in foreign trade. Should we not give them more support to become, more rapidly, the economic development players they ought to be? Should we not listen more attentively to their requirements in terms of physical and institutional infrastructures? Should we not give them more technical assistance according to their own specifically stated requirements?

    At ITC we meet daily with representatives of the private sector of developing countries and transition economies. They forcefully ask for help in accessing market information, learning about quality management and understanding WTO rules, they want advice on product development and adaptation, and they request trade support services of all sorts. Are development organizations, multilateral and bilateral alike, doing enough to help them become the active players they can be? Are their governments giving them the room they need to grow and contribute?

    A range of views

    Three highly qualified people, who believe in trade as a tool for development, presented their views in Copenhagen. Mr. Sok Siphana, Secretary of State for Commerce of Cambodia, is part of the team that has made relentless efforts in using the Integrated Framework for Trade-related Technical Assistance to Least Developed Countries to contribute effectively to Cambodia's development. Indeed, Cambodia is doing so well with it that a number of other least developed countries (LDCs) have asked him to visit their capitals to share his views on how to use the Integrated Framework successfully.

    Ms. Rita Mlaki, Deputy Minister for Industry and Trade of the United Republic of Tanzania, is a champion of the private sector's contribution to economic development. Tanzania vigorously promotes public-private sector dialogue, through the Tanzania Business Council and the Inter-Institutional Technical Committee on the WTO. Ms. Mlaki actively supports integrated trade development, including the Joint Integrated Technical Assistance Programme for Africa (JITAP) and the Integrated Framework, directly aimed at building capacity on the multilateral trading system, and promoting trade development. In its capacity as a core agency of both programmes, ITC is working with Tanzanian exporters of spices, horticulture, fish, textiles and garments on market and product development strategies, and in being more forthcoming with business advocacy. These approaches are expected to go a long way in making trade work for the poor.

    Ms. Emmy Simmons, Assistant Administrator of the United States Agency for International Development (USAID), is another believer in trade as a tool for development. USAID has a long tradition of private sector development and, more recently, has shown solid interest in trade-related technical assistance. This is true of a growing number of bilateral development agencies. ITC works with several of them in concrete and targeted ways. USAID, for instance, is conscious of the importance of providing the developing world with better access to market information. In this connection, it associated with ITC to provide up to 70 developing countries and transition economies with training and Internet access to ITC's TradeMaps, our interactive web site providing export, import and market access data for international business development, a powerful tool of assistance to exporters and trade negotiators.

    J. Denis Bélisle is Executive Director, ITC.

    Views from the Copenhagen High-level Meeting on Trade and Development

    The views below are based on presentations at a panel discussion on 'Responding to Trade Opportunities: Working with Business' as part of the High-level Meeting on Trade and Development, Making Trade Work For The Poor, held in Copenhagen in May 2003. The panel discussion was chaired by J. Denis Bélisle, Executive Director, ITC.


    by Sok Siphana

    Cambodia's recipe for integrating business in trade policy development is exemplary - and may lead to Cambodia becoming the first LDC to join WTO.

    The private sector needs to work very closely with the government to ensure that policies are pro-private sector development. Involvement in the dialogue process should be approached in a holistic and coherent manner - from policy formulation to implementation. Private sector needs will be answered effectively only if they are tackled on all fronts, from policy dialogue at the apex level with the government's senior policy-makers, down to the working bureaucrats. Trade support networks should be used extensively to mobilize the necessary critical mass to get government attention.

    Cambodia is a good example of a country where such a process has taken root in the day-to-day running of the administration. From semi-annual, high-level policy dialogue with the Prime Minister to monthly working group consultations at the ministerial level, active contribution to the legislation-making process and monitoring government official performances, the private sector has made its presence known and respected.

    The outcomes are impressive. To cite a few: legal and economic reforms have moved at a rapid pace leading to a substantial decrease of policy-induced transaction costs; private sector involvement in infrastructure - power generation, road transport, telecom - is beginning to flourish; domestic resources at the provincial and national level are being mobilized; and support for Cambodia's accession to the WTO has been very encouraging - thus enabling Cambodia to have the chance to be the first LDC to join the WTO.

    Sok Siphana is Secretary of State for Commerce of Cambodia.


    by Rita Mlaki

    The world needs a spirit of willingness to work for a positive change in helping LDCs to attain competitive advantages in trade for a sustainable global economy.

    We cannot overemphasize that LDCs still depend on comparative advantage and that the shift to competitive advantage has not happened so far. Strengthening the private sector is the key to shifting economic activities from comparative to competitive advantage. To push for change, we need to remove constraints by increasing the level of capital transfers, and by building capacity in LDCs that focus on private sector development. This should be supplemented by providing market access based on trade preferences as already shown by the Everything but Arms (EBA), the African Growth and Opportunity Act (AGOA), and Japanese and Canadian initiatives.

    Rita Mlaki is Deputy Minister for Industry and Trade of the United Republic of Tanzania.


    by Emmy Simmons

    At USAID, support to improve competitive-ness of economies accounts for almost 90% of the more than US$ 500 million that USAID commits to trade capacity-building efforts worldwide each year. This is part of our commitment to the Doha Development Agenda.

    The convergence of the trade agenda and the private business development agenda have given our programmes new energy and focus. 'Red tape' analyses, for example, are often a starting point for reviews of both trade barriers and the business climate in general.

    We see three trends to consider in boosting export growth:

    • Market-based standards or certifications. We work with private sector partners as well as governments to ensure that poor producers understand market standards. For example, we help farmers apply food safety and quality standards to meet requirements of big buyers from international supermarkets. In another example, we work with the Sustainable Forest Products Alliance - made up of furniture retailers like Ikea and Home Depot as well as non-governmental organizations such as WWF - to help developing countries export forestry-based products that are certified as 'sustainably produced' to satisfy environmentally-aware consumers.

    • Diversifying exports. Diversification requires innovation, venture capital and knowledge about potential trade opportunities. ITC's TradeMaps are proving to be a useful tool in helping people explore trade options for market diversification.

    • Specializing in higher-value markets. Wine producers have successfully used appellation rules to create unique identities for their output in world markets. Coffee producers are beginning to recognize the value of specialization. We are also looking at opportunities among neighbouring developing countries, and the potential of increased South-South trade as a stimulus to growth.

      Role of governments

      Government policy and performance have a great deal to do with the private sector's ability to succeed. Contract law, good governance and public investment in infrastructure are critical to private sector competitiveness. How countries respond to opportunities in the global marketplace depends, in the final analysis, on the actions of private entrepreneurs and investors. Private financing flows are much more important than official development assistance in supporting economic growth. Yet development assistance can play a role in linking public and private sector interests and capabilities in building trade for development. We at USAID are committed to doing our part.

      Emmy Simmons is Assistant Administrator of USAID.