Enabling Developing Countries to Participate in International Trade Strengthening the Supply Capacity

1. Enabling Developing Countries to Participate in International Trade Strengthening the Supply Capacity

2. Gradual but good progress in reducing tariff and quota barriers to trade Special initiatives for developing country exports (ACP country access to EU; “Everything but Arms” initiative; AGOA) However, until now a very limited supply response from developing countries. Opening borders is essential but not sufficient! The Issue:

3. Developing countries, specially LDCs, do not have surplus products or production capacity Most developing countries (and their potential exporters) do not have the capacity to deal with international standards, technical regulations and requirements Two main reasons:

4. Standards and technical regulations essential for trade and for producers/ consumers, but: Without capacity to deal with them, they become a real obstacle to DC exports and thereby to production and investment Standards and Regulations

5. Meant to “ensure that technical regulations and standards do not create unnecessary obstacles to trade…” (TBT Preamble); Both specify that Technical Assistance was to be provided to DCs to enable conformity assessment procedures and compliance standards and regulations TBT and SPS Agreements

6. Only most-developed DCs have parts of requirements operational, LDCs have very little. Very few internationally recognized testing capacities in DCs Very limited participation in international standard setting, international professional bodies Potential exporters have to use overseas services for metrology, testing and analysis, at high cost and with delays Current situation:

7. Developing Countries are standard takers and not Standard makers Perception that many standards are "imposed" by industrialized countries Standards and regulations can be used as non-tariff barriers, DCs lack capacity to analyze problems and solve; in a weak position to argue High cost and delays i.a. through duplication of conformity assessment and testing procedures These factors make exporting for many not viable IMPLICATIONS FOR DEVELOPING COUNTRIES

8. Jointly launched with the European Commission at “Finance for Development” in 2002; Building on UNIDO strengths in “technical infrastructure” and sectoral expertise; Now one of three main priorities of UNIDO: “Trade Capacity Building”, attracting increasing funding. UNIDO Initiative: Enabling Developing Countries to Participate in International Trade- Strengthening the Supply Capacity”

9. Enable developing countries to establish essential quality and conformity assessment infrastructure (standards, metrology, certification, accreditation; Combined with assistance to high export-potential sectors to upgrade product/ production quality, comply with standards and regulations for exports; Increasingly integrate investment/partnership promotion and export consortia of SME. Trade Capacity Building

10. Partnerships with complementary organizations: MOU with the World Trade Organization (joint programme); agreements with ISO, BIPM, OIML, ILAC, IAF, IEC; cooperation with ITC/UNCTAD. Cooperate with regional (integration) organizations (e.g. UEMOA, SAARC, COMESA); promote common standards and sharing of key facilities at regional level. Trade Capacity Building

11. Tanzania exporting $140 million worth of fish in 1998 Due to hygiene and other safety concerns a major market banned imports, resulting in 50% loss of exports and 60,000 job losses. Integrated assistance to improved processing, better quality inspection and setting up recognized laboratory services enabled restart of exports in 1999 An example

12. Small Trust Fund for preparatory, analytical, small co-financing activities; contributions received from Austria, Finland, Italy, UK. Total $ 1.6 mln. Project funding (over $ 55 mln.) from: European Commission: € 22 mln. for UEMOA, Pakistan, Bangladesh Norway: $ 3.6 mln. for Sri Lanka, Mekong countries, SAARC Switzerland: $ 5.3 mln. for Vietnam, Tanzania, Mozambique Italy: € 3 mln. for Egypt (traceability); € 10 mln. for Algeria, Argentina, Tunesia, Uruguay and Syria Austria: $ 0.8 mln. for Cambodia France: € 2.5 mln. for Algeria and Senegal Self financing: $ 2.1 mln. Nigeria and Guatemala Under negotiation: €14 mln. UEMOA II/ ECOWAS, $ 5 mln. for Central America and Lebanon, second phases for Sri Lanka, Mekong countries, SAARC etc. Funding 2001-2005: