Trade Logistics - Norwegian Focus

1. Trade Logistics - Norwegian Focus Erik Strømsøe, Head of Information Office for Private Sector Development NORFUND, Norway Annual Trade Logistics Conf., WDC, June 7, 2010

2. ”Disclaimer” • no official spokesman for the Norwegian Government! • views based on own experience: • from private sector around the world • from development cooperation agency experience in PSD • from investment fund activities in developing countries • from dialogue with private sector on public support and investment instruments aimed at developing countries • as public servant and observer  probably biased with regard to belief in Private Sector as a vital tool for economic development and poverty reduction Annual Trade Logistics Conference 2010: Norwegian Focus

3. Trade logistics - an important sector? Representing Norfund, - the Norwegian mini-version of IFC, and with background from private sector in global markets through 35 years: • never in doubt of the importance of international trade and smooth un-bureaucratic trade logistics across borders as economic development booster and poverty reducer! • a recent internal survey in Norfund listed often experienced obstacles to investment implementations: • physical administration of duty free imports/VAT exemptions/tariffs • mismatch in information between ”One-stop-investment-centre” and revenue collection agencies • complexity and time consumption in trade logistics administration • infrastructure and capacity shortcomings in trade logistics chain and standards generally • exposure for petty corruption! Annual Trade Logistics Conference 2010: Norwegian Focus

4. The Norwegian view and policy: • commitment to a fair global international trade, including the developing countries on equal terms • recognition of efforts needed to include developing countries’ involvement in world trade beyond formal market access • recognition of low income countries’ need for help to make use of an open, rules-based international trade regime, and establish necessary prerequisites beyond market access, such as: • well functioning regulations and trade procedures (Category 1) • productive capacity and infrastructure (Categories 2-3) • marketing expertise Annual Trade Logistics Conference 2010: Norwegian Focus

5. Norwegian Milestones • Norwegian development cooperation budget 1,1 % of GNP (approx 27 bNOK). >1/3 goes for economic development (up from ¼ 10 years ago) • The Norwegian Government’s Aid-or-Trade action plan 2007 increased the funding for the program with 80% to 125 mNOK in 2008 and 2009, continuing upwards in 2010. • approx. 10 % of Norwegian private sector’s requests for PSD support related to trade activities, - 20% of PSD global instruments funds approved Annual Trade Logistics Conference 2010: Norwegian Focus

6. Norwegian Priorities • General: EIF – Enhanced Integrated Framework • demand driven – 46 LDCs engaged • Geography: Africa and LDCs • 3 thematic particular attentions: • good governance and fighting corruption • regional trade • women and trade. • no support to programs conditioned upon liberalization / privatization • support to WB multidonor fund on innovative projects in trade and development Annual Trade Logistics Conference 2010: Norwegian Focus

7. Norwegian channels for AfT • close to 100% multilateral, in line with Paris-declaration and Norwegian general development policy. The 4 largest are: • EIF approx. 30 mNOK (LDC – Good Gov. – T. Policy) • UNIDO approx. 25 mNOK (Standards - Cap.Build. – Product control) • ITC approx. 20 mNOK (Good Gov. – T. Policy – Fair T.) • WBG approx. 13 mNOK (Gender – Regional T. – Innov. Proj.) • support channel determined by organizations' comparative advantage • extensive use of trust funds and frame agreements Annual Trade Logistics Conference 2010: Norwegian Focus

8. Prioritized thematics (I) Good Governance and fighting corruption - a number of projects within: • trade policies/regulatory frameworks • trade and export facilitation • improved standards for agro and industrial products • ethical and fair trade • capacity building on trade negotiations • channels: • UNIDO/WTO/WB/UNCTAD/ITC/etc Annual Trade Logistics Conference 2010: Norwegian Focus

9. Prioritized thematics (II) Regional Trade • experience: • barriers-to-trade (tariffs/non-tariff barriers/poor infrastructure) often greater between developing countries than between these and industrialized countries • landlocked states’ particular challenges • remedies: • regional diagnostic studies • financing infrastructure and capacity building • most actors active, both donors and receivers, in a high number of projects • channels: • ITC (especially Africa)/WBG/UNIDO Annual Trade Logistics Conference 2010: Norwegian Focus

10. Prioritized thematics (III) Women and Trade • equal gender opportunities – challenges formal/informal sector - benefits from increased trade: to be reflected in trade policies and agreements • less focused by developing countries, but improving through pioneering work in Rwanda, Liberia and SADC! • trade liberalization and expansion may have both positive and negative effects on gender issues: beware! • channels: • ITC/ILO/WB /HSH (The Federation of Norwegian Commercial and Service Enterprises) (especially in East Africa) Annual Trade Logistics Conference 2010: Norwegian Focus

11. Success stories (I):GSP (Generalized System of Preference for import of goods from developing countries) • all 50 LDC have duty and quota free access to the Norwegian Market since 2002, for all their products. • as of 1.1.2008 further 14 low income countries has been added to the list • goal: to ease market access for products from LDCs • result: insignificant increase of import value from these countries so far Conclusion: Easy market access necessary and important, but not enough! Annual Trade Logistics Conference 2010: Norwegian Focus

12. Success story (II): Trade logistics advisory program • strongly demand driven WBG reform program • Norwegian support through PSI trust fund: • support to projects in Rwanda, Liberia, Colombia, Burkina Faso focusing reform work, admin./regulatory improvements, inspection routines, capacity building, dissemination and WBG internal coordination and resource utilization. • looking for opportunities for secondment of experts to the program • participation on the Trade Logistics Advisory panel • goal: ease of country’s participation in international trade through efficient and competitive administrative and bureaucratic logistic systems and infrastructure • result: So successful that user demand that WBG delivery capacity becomes bottleneck Conclusion: Continued and strengthened support. Annual Trade Logistics Conference 2010: Norwegian Focus

13. Success story (III):Capacity building programs in UNIDO • several capacity building, training and reform programs within standardization, product control/safety, legislation compliance, test/control institutions and laboratories, metrology, accreditation etc • Norwegian support through a frame agreement with Norad (as template for other donors) • result: important capacity improvements in LDCs and improvements in intra UN coordination. Conclusion: Continued and strengthened support Annual Trade Logistics Conference 2010: Norwegian Focus

14. Future development • strengthen trade oriented capacity at Norwegian Embassies in chosen developing countries • intensified efforts through EIF • maintain level of Aid-for-Trade support in 2011 budgets • include trade issues in political delegation visits in developing countries, especially Africa • continued work for donor and intra and inter UN and WBG coordination • maintaining strong support to proven successful programs/projects Annual Trade Logistics Conference 2010: Norwegian Focus