Trade Mainstreaming and the IF – Overview

1. Trade Mainstreaming andthe Integrated Framework for Trade-Related Technical Assistance to Least Developed Countries (IF)Conference on Small Island States and Economic Resilience, Malta 23-25 April 2007Trade and Human Development UnitUNDP Office in Geneva

2. Trade Mainstreaming and the IF – Overview • Mandate and objectives of the IF • Trade Mainstreaming and IF: diagnostics approach • Trade mainstreaming: IF DTIS principles • Trade Mainstreaming and the IF: DTIS process • Trade Mainstreaming and the IF: DTIS components • Trade Mainstreaming and the IF: small island LDCs • IF Small Island State LDCs and IF process • Trade Mainstreaming and the IF: small island LDC trends • DTIS Action Matrix trends: IF small island LDCs • IF and UNDP’s role • Enhanced IF

3. IF – Trade as a Catalyst of Growth Mandate and Objectives: • Mainstream trade into LDCs’ national development plans such as Poverty Reduction Strategy Papers (PRSPs); • Assist in the coordinated delivery of trade-related technical assistance in response to needs identified by LDCs (6 multilateral agencies involved: UNDP, World Bank, WTO, UNCTAD, ITC, IMF); • Develop the capacity of LDCs to trade, including through capacity building and addressing supply constraints.

4. Trade Mainstreaming and IF: diagnostics approach • Integrate trade strategies and priorities with the overall national development and poverty reduction strategy (i.e. mainstreaming) • UNDP emphasises human development outcomes • Provide an analytical foundation for policy recommendations, trade-related technical assistance and capacity building formulation for the country’s integration in the international trading system as a platform for donor support (i.e. donor coordination)

5. IF DTIS Principles • The IF DTIS is country-specific, tailored to country’ needs and owned by the country itself. • In formulating the DTIS dialogue and active participation of national stakeholders (civil society & private sector) is required.

6. Trade Mainstreaming and the IF: DTIS Process • Aide memoire • Concept note • DTIS First draft, followed by revision • Validation workshop • Final draft • Government endorsement • Trade mainstreaming

7. Trade Mainstreaming and the IF: DTIS components • Part I: Executive Summary and Action Matrix • Part II: Overall Trade Issues • Macroeconomic Environment Structure and Pattern of Trade and Investment • Trade Policy and Institutions • Trade Agreements and Market Access • WTO Accession (if applicable) • Trade and Poverty (including HD outcomes)

8. Trade Mainstreaming and the IF: DTIS components • Part III: Cross Sectoral Issues • A.Business Environment and Institutional Framework for Trade and Investment • B.Trade Facilitation • C.Standards • Part IV: Sectoral Studies • Part V: Implementation Arrangements

9. Trade mainstreaming and the IF: small island state LDCs • Of the 50 LDCs eligible for assistance under the IF, 11 are small island states- Cape Verde, Comoros, Guinea-Bissau, Haiti, Kiribati, Maldives, Samoa, Sao Tome and Principe, Solomon Islands,Tuvalu and Vanuatu (http://www.un.org/special-rep/ohrlls/sid/list.htm) • All are IF countries (Tuvalu and Kiribati are about to request entry)

10. IF Small Island State LDCs and IF process

11. Small Island State LDCs: trends Accentuated • problems of high local costs due to low factor endowment • problems of low levels of human capital formation and hence low labour productivity • problems of economic structure • problems of macroeconomic management • problems related to limited social and cultural capital • problems of geographic isolation and high operating cost structures (including costly and poor quality infrastructure) • problem with low supply response (ie. agriculture) • problem of vulnerability Other features: - High incidence of inequality; - Open economies; - Large services sector; - High brain drain intensity and heavy reliance on remittances as a source of external financing; and - In many cases facing challenges of LDC graduation (UNDP, Making global trade work for people: the concerns of Small States in the Global Trade Regime, Resilience Series, Volume 6, 2003 plus DTISs for Maldives and Sao Tome and Principe which can be found at www.integratedframework.org)

12. DTIS Action Matrix trends: IF small island LDCs • Reduction of trade costs • Sustainable development (i.e. specific environmental challenges, tourism) • Human resource developmentand building trade policy capacity • Revitalising role of rural sector to address inequality

14. Enhanced IF Three Elements: • Provide increased, predictable, and additional funding on a multi-year basis; • Strengthen the IF in-country including through mainstreaming trade into national development plans and poverty reduction strategies; more effective follow-up to diagnostic trade integration studies and implementation of action matrices; and, achieving greater and more effective co-ordination amongst donors and IF stakeholders, including beneficiaries; • Improve the IF decision-making and management structure to ensure an effective and timely delivery of the increased financial resources and programmes.

15. IF and UNDP’s role Support to: • Diagnostics • Mainstreaming • Aid coordination • Monitoring and evaluation in future Also: • Current IF Trust Fund Manager

16. For more information, please, contact the Trade and Human Development Unit atgenevatradeunit@undp.org