Trade - Related Capacity Building in East Asia: Role of ADB

1. Trade-Related Capacity Building in East Asia: Role of ADB Jong Woo Kang Economist, Office of Regional Economic Integration 5 February 2008, Cambodia

2. Outline of the Presentation • ADB’s Role in Capacity Building and Development in Asia • ADB’s Regional Cooperation and Integration (RCI) Strategy • Aid-for-Trade Initiative • ADB Capacity Building Activities and Support for FTAs • Lessons Learned from ADB Experience

3. I. ADB’s Role in Capacity Building and Development in Asia • Dedicated to “poverty reduction” in Asia and the Pacific. • Focused on encouraging economic growth, social development, and good governance, while promoting regional cooperation and integration. • Based on the experience and close cooperation with other governments and institutions, best poised to provide research, capacity building and training activities in Asia.

4. I.ADB’s Role in Capacity Building and Development in Asia Why Trade-Related Capacity Building? • While trade performance in Asia is striking, there still exist countries that are lagging behind others and unable to fully enjoy the benefits from increasing trade. • With an estimated 204 FTAs in Asia of which more than 50% include East Asian economies, trade-related capacity building is critical element to enable DMCs and LDCs to cope with the growing reality in an effective way. • ADB’s regional cooperation programs have been active in trade-related projects in GMS, CAREC and the Pacific.

5. II. ADB’s Mission and the Role of Regional Cooperation and Integration in Poverty Reduction POVERTY REDUCTION OVERACHING MISSION/ OBJECTIVE FOUR PILLARS OF REGIONAL COOPERATION AND INTEGRATION Regional & Subregional Economic Cooperation Regional Cooperation and Integration Trade and Investment Cooperation and Integration Individual Country Programs Monetary & Financial Cooperation and Integration Regional Public Goods Pro-Poor Sustainable Economic Growth Inclusive SocialDevelopment Good Governance CORE AREAS OF INTERVENTION

6. III. Aid for Trade (AfT) • AfT refers to aid flows to improve the participation of DMCs, esp. LDCs in the global trading system. • Broadly defined, AfT covers: • Trade capacity building to help DMCs negotiate and implement trade agreements; • Trade development including export promotion and trade finance; • Trade-related infrastructure (transport, energy communications); • Supply-side capacities (e.g. in the productive sector); • Trade-related adjustment programs (e.g. social safety nets and worker retraining)

7. III. ADB involvement in AfT • In 2006, RDB Heads including ADB President expressed support for AfT • WTO AfT Advisory Group established in 2007of which ADB is a member • OECD-DAC Global Monitoring • Regional AfT Review co-hosted by WTO • September 2007, Manila www.aric.adb.org/aft_asia.php • 1st Global AfT Review • November 2007, Geneva • ADB presented the AfT in Asia and the Pacific: Report and Recommendations

8. III. AfT Roadmap for 2008 • Regional Technical Group on AfT for Asia and the Pacific • Proposal for AfT in Asia and the Pacific • Study on Trade Performance and AfT in Asia and the Pacific

9. IV. ADB Capacity Building Activities and Support for Free Trade Agreements 1. Free Trade Agreement (FTA) Manualfor Asia • Offers all-in-one resource materials on current practices and experiences of Asian economies on FTA design, negotiation and implementation. • Covers economics of trade and FTA, main components of FTA and its related practical issues • Scheduled due in March, 2008

10. IV. ADB Capacity Building Activities and Support for Free Trade Agreements 2. Training Course on Designing, Negotiating and Implementing FTAs • Address the growing concern for new technical skills among government officials in such areas as services, intellectual property rights, and government procurement. • Aims to build up a pool of trade officials who are active or to be active in the area of trade design, negotiation and implementation in promoting "best practice" FTAs. • The 2-week course consist of lectures, group presentations and mock-up negotiations

11. IV. ADB Capacity Building Activities and Support for Free Trade Agreements 2. Training Course on Designing, Negotiating and Implementing FTAs • Course contents include: • Economic theory of international trade • General issues of WTO • Coverage of FTA • Practical processes in the government • 3 batches of training have been conducted in ADB HQ, Manila, Philippines since October 2006. • Received strong and positive feedbacks on the RELEVANCE and USEFULNESS of the course.

12. 2. Training Course on Designing, Negotiating and Implementing FTAs IV. ADB Capacity Building Activities and Support for Free Trade Agreements

13. IV. ADB Capacity Building Activities and Support for Free Trade Agreements 3. Asia Regional Integration Center (ARIC) Database • Launched in October 2006 • Database provides three types of information: • FTA trends showing statistical tables on the status and various classifications of FTAs • Available resources on each FTAs including legal documents, official summary, studies and researches, news, opinions and editorials, FTA membership and an external link to the UNESCAP database • Comparative FTA Toolkit -allows side-by-side comparison of concluded FTAs

14. IV. ADB Capacity Building Activities and Support for Free Trade Agreements 3. Asia Regional Integration Center (ARIC) Databasewww.aric.adb.org/ftatrends.php

15. IV. ADB Capacity Building Activities and Support for Free Trade Agreements 4. Technical Assistance Programs • Capacity building program for BEIF (Bureau of Economic Integration and Finance), ASEC - ongoing • For 2008, ADB-OREI have two upcoming technical assistance on trade capacity and facilitation: • Supporting the capacity building of FTA Units in CLV countries- expected for approval in Q2 2008 • Partnership in Supporting Trade Facilitation For DMCs in Asia and the Pacific (Phase I) (with UNESCAP) – expected for approval in 2nd Half of 2008

16. IV. ADB Capacity Building Activities and Support for Free Trade Agreements 5. Research Activities Study on Economic Cooperation Between East Asia and South Asia • Two-volume book (forthcoming) with six thematic chapters-including investments, services, trade, infrastructure and trade facilitation, scenarios for EA-SA integration using a CGE model • Eight country studies-PRC, Thailand, Singapore, Bangladesh, India, Nepal, Pakistan and Sri Lanka • Address issues such as • extent of East Asia-South Asia trade, investment and other linkages and economic factors thereof • potential benefits of enhanced East Asia-South Asia cooperation and integration for member countries

17. IV. ADB Capacity Building Activities and Support for Free Trade Agreements 5. Research Activities Study on Economic Cooperation Between East Asia and South Asia: Key Findings • East Asia-South Asia linkages growing rapidly from a small base, driven by PRC-South Asia and India-East Asia trade • Given the complementarities between the two regions and on-going policy efforts, economic integration is bound to increase much more in the future • The inclusion of South Asia in a broader regional agreement sees gain for East Asian and South Asian economies • Big effort needed at regional and national levels to realize Pan-Asian integration.

18. V. Lessons from ADB T&I Capacity Building Experience • Need to define a comprehensive course program still responsive to individual country requirements • There is a lack of general understanding in basic economic rationales behind trade and trade-related issues • Effective harmonization of HQ and on-field courses are needed building on merits and demerits of respective training schemes • Spread of knowledge and skills is essential → knowledge dissemination through Manual, CD and etc.

19. Thank You. Jong Woo Kang Office of Regional Economic Integration Asian Development Bank jkang@adb.org