Transcript Claire Durkin - CUTS Centre for International Trade, Economics

UK’s Aid for Trade Strategy
Claire Durkin
Director, Europe, International Trade &
Development
UK Government
“Free trade, one of the greatest
blessings which a Government
can confer on a people, is in
almost every country
unpopular”
Thomas Macaulay, 1824
For Growth and Development
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Trade and Investment
Economic policy
Development policy
International relations
International and internal scrutiny
Labour standards
Environmental policies
“Everything is connected to everything else”
Albert Laszlo Barabasi
Trade and Investment
• Erodes “Import” “Export” bi-polars
• Challenges RTAs
• Not an option e.g.
India’s 11th 5 year plan: Infrastructure investment must rise from
5% GDP (06-07) to 9% (2011-12)
Global FDI and Trade
$bn
Increasing Stock in World FDI and Trade Flows
14,000
12,000
10,000
8,000
Annual world trade
6,000
4,000
World stock of FDI
2,000
0
1995
1997
1999
2001
2003
2005
The Present
Average developed world tariffs
• 1.7% goods
• 5% agricultural products
Average developing world tariffs
• 6.4% goods
• 13% agricultural products
NTBs, Regulatory barriers.
“Protect”
“Nurture”
“Defend”
Reducing Poverty
Declining number of people living on less than $1 a day
between 1990 and 2004
1990
Sub-Saharan Africa
2004
South Asia
East Asia & Pacific
Latin America &
Caribbean
Middle East & North
Africa
Europe & Central Asia
0
Source: Millenium Development Goals, World Bank
10
20
30
40
50
% of Population
Developing countries share of trade rises as
global integration intensifies…
Exports from developing and developed countries, 2005-2030
30
US$2001 trln.
$27 trln
25
Structure is changing:
20
15
High-income
countries

South as source of demand

services
10
Developing
countries
5
0
1980
22%
32%
2005
Source: World Bank simulations with Linkage model; GEP 2007.
2030
45%
the Good, the bad and the Ugly
• UK’s North Sea policy
• EU Common Agricultural policy
• British Empire’s cotton policy.
UK Aid For Trade Strategy
Increasing capacity within developing
countries to trade and integrate
successfully into the global economy
whilst easing the costs of adjustment
The Challenges
• Cutting transport costs
• Upgrading trade-related
infrastructure
• Increasing regional trade &
integration
• Expanding, diversifying & adding
value to agric & manufacturing
• Improving trade & investment climate
• Managing adjustment
High Transport Costs
• Trucks at the Petrapole–Benapole border between India
and Bangladesh 10 days – fruit/ vegetable exports for
poor producers
• Transport costs in East Africa on average 80% higher
than USA & Europe
• It costs as much to move a freight container from
Mombassa to Kampala as it does from Mombassa to
Shanghai
• In Rwanda, the average import procedures124 days.
OECD average 12 days.
Regulatory Frameworks
• In South Asia, existing bilateral transit
agreements and regulatory frameworks for
cross border and rail transport prohibit
best route to market
• Lack of transit rights through Bangladesh:
India’s North Eastern states’ trade
additional 1,300 km to a journey from
Calcutta to Agartala.
Bariers to Regional Trade
• Regional trade 5% in Africa, 46% in
NAFTA, 55% in East Asia and 62% in the
EU
• Internal barriers, weak infrastructure interconnectivity and high transport costs – in
South Asia, barriers are also strongly
political
Reduced border delays & faster movement
goods
• (COMESA), the East African Communicty (EAC) and
the Southern African Development Community
(SADC) Regional Aid for Trade initiative, cut transport
costs along North South Transport Corridor (DRC to
Tanzania and DRC to South Africa) by 10% by the end
of 2009
• Zambia and Zimbabwe One Stop Border Post in Africa
at the Chirundu border. Setting up a OSBP between
South Africa and Mozambique, and has been asked to
support five more
• Trade Investment Facility in Lesotho, the One Stop
Shop, export applications processed in 15 minutes rather
than 7 days. Exporters fill in 2 pages of forms instead of
23.
Improved customs performance
Rwanda reduced transit times and
improved revenue collection.
• Revenue Authority nearly tripled tax
revenue over five years, despite falling tax
rates
• Increase in poverty reduction expenditure
from 5.3% of GDP in 2001 to 10.1% of
GDP in 2005
Increased exports & income
• Regional Trade Facilitation Programme
(RTFP): Southern Africa increase exports
of nuts, tea and coffee by 1500 tonnes
(2006-7
• Licensing programme secures trademarks
for Ethopia’s fine coffee brands in 28
countries.
Productivity and Standards
• Lesotho, ComMark programme to enhance
productivity in garments industry; employment of
50,000 people.
• In Bangladesh, compliance with labour and
health standards: 600 factories have completed
audits improved productivity a 14% increase in
sales turnover of assisted companies
• Fisheries export in Mozambique supports
70,000. Regional Standards Programme
helped maintain EU standards accreditation
UK AFT COMMITMENTS
Strategic Objectives
• Build countries’ capacities to trade through
growth & competitiveness strategies
• Ensure trade results in poverty reduction &
inclusive growth
• Facilitate regional trade & integration, and
ensure that EPAs are beneficial for the
ACP
• Build an international system that delivers
more and better AFT
… THEMATIC ALLOCATIONS
UK Aid for Trade expenditure profile 2008 -13
Economic
infrastructure
(including ICA, IPPF,
EIB Trust Fund and
contributions via
multilaterals)
45%
Trade policy &
regulations (including
trade facilitation,
customs
modernisation, regional
integration
15%
Productive capacity
building and adjustment
(including private
sector development,
investment climate and
trade development)
40%
… Geographical Spread
UK Aid for Trade geographical spread
South Asia
30%
Rest of the
World
15%
Africa
55%
Deliverables
• Delivery of EU G8 AFT spending targets - $4 billion per year and €2
billion per year by 2010
• A successful EIF up and running and delivering real trade-related
technical assistance and support to LDCs. Contribution of £38
million over five years with £15.5 million over the first two years
• Concrete plans and support for a 2nd phase EIF covering non-LDC,
IDA-only countries by end of CSR period
• A robust global monitoring framework on AFT (global indicators,
regular reports, annual global WTO-led review, best practice, etc.),
developed jointly with the OECD, World Bank, WTO, RDBs and
other donor partners.
Delivery Challels
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Programmes in countries and in regions
Core contributions to multilateral partners
Multilateral trust funds
International partnerships
Think tanks, NGOs and academia
• International agencies
• Regional economic and integration
institutions
UK Spend through Multilaterals
April 2008 – March 2011:
£1.15 billion (70% of overall UK spend)
• £676 million to EU.
• £472 million to World Bank and R.D.Bs.
“Multilat isVictoria
Hell”Nuland, quoted by Strobe Talbott
Victoria Nuland, quoted by Strobe Talbott
Managing Multilateral Funding
Symphonies
Quartets
Sonatas
but who holds the baton?
COUNTRIES MUST
CODA
• Aid for Trade to enable developing
countries benefit from economic climate.
• Our challenge as leaders, as trade
negotiators, as Governments, as
economists, is to change the economic
climate.
• Never Take Open Markets For Granted
Overlapping African agreements…
AMU
Nile River Basin
COMESA
ECCAS
IGAD
CEMAC
Somalia
Sao Tomé & Principe
Algeria
Libya
Morocco Mauritania
Tunisia
ECOWAS
Conseil de
L’Entente
Ghana
Nigeria
Egypt
Cameroon
Central African Rep.
Gabon
Equat. Guinea
Rep.Congo
Chad
Cape Verde
Gambia
Djibouti
Ethiopia
Eritrea
Sudan
Burundi*
Rwanda*
DR Congo
Benin
Togo
Cote d’Ivoire
Guinea-Bissau
Liberia
Sierra Leaone
Niger
Burkina Faso
Mali
Senegal
EAC
Guinea
Tanzania*
Malawi*
Zambia*
Zimbabwe*
SACU
WAEMU
Mano River
Union
Kenya*
Uganda*
Angola
CLISS
AMU:
Arab Maghreb Union
CBI:
Cross Border Initiative
CEMAC: Economic & Monetary Community of Central Africa
CILSS:
Permanent Interstate Committee on Drought Control in the Sahel
COMESA: Common Market for Eastern and Southern Africa
EAC:
East African Cooperation
ECOWAS: Economic Community of Western African Studies
IGAD:
Inter-Governmental Authority for Government
IOC:
Indian Ocean Commission
SACU:
Southern African Customs Union
SADC:
Southern African Development Community
WAEMU: West African Economic & Monetary Union
South Africa
Botswana
Lesotho
Mozambique
SADC
Mauritius*
Syechelles*
Comoros*
Madagascar*
Namibia*
Swaziland*
Reunion
*CBI
IOC
Bilaterals
We give advice but we do not influence
people’s conduct ”
Rochefoucauld
• Baldwin – making RTAs mutually
compatible
• Model FTAs
• Role of WTO
Multilaterals
DOHA
DEVELOPMENT
ROUND
Future World Trade Rounds
Movement of Capital
Movement of Labour
Development, Standards, Climate Change =
Global Responsibility
To move from Georgics to Aeneid
Ever the Optimist
It moves, all the same.
Galileo