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Issues Discussed

Linking Aid for Trade with Trade, Development and Poverty Reduction Fred A Miencha-KIPPRA fred@kippra.or.ke. Issues Discussed. Trade, Growth and Poverty Linkage Hong Kong Declaration on Aid for Trade

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Issues Discussed

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  1. Linking Aid for Trade with Trade, Development and Poverty ReductionFred A Miencha-KIPPRA fred@kippra.or.ke

  2. Issues Discussed • Trade, Growth and Poverty Linkage • Hong Kong Declaration on Aid for Trade • Aid for Trade an Instrument for Development and Poverty Reduction • Link between TDP and AfT process

  3. Trade, Growth and Poverty Linkage • Dilemma between Trade openness and protection • Douglas A.Irwin “ did the late nineteenth century US tariffs promote infant industries? Evidence from the Tinplate industry” • Frank Taussing (1915) stated that there is a prime facie case to protectionism • In Para 2 pg 3 ,conclude that trade protection as a rule not be preferred to trade liberalisation • Douglas again in his paper “interpreting the tariff-growth correlation of the late 19th century

  4. Trade, Growth and Poverty Linkage (2) • Found Corretion coefficient of 0.68 between tariffs and growth • Canada,Argentina and USA were countries with high tariffs, high growth countries Protection/liberalisation/structural issues?? • In para 2 pg 2, the difficult of linking trade policy change and poverty. Alan winter has come up with Institutional framework to trace this link through (Distribution, enterprise and government)

  5. Analytical framework Figure 1 • Intermediate Impact • National level response • Changes in relative prices • Changes in value and level • Of production • Changes in import prices • Changes in export earnings • Changes in imports requirements • Changes in productive levels • Policy change • Trade policy reforms • Change in relative • Border price from • Multilateral trade and • Unilateral trade • Policy change • Domestic Macroeconomic • Reforms • Real exchange rate • Capital market liberalisation • Tax policy reform • Agricultural sector reforms • Net tax • Promotion of diversification • Promotion of non-traditional • Crops • Institutional reforms • Land • Market parastatals • External shocks Institutional and policy environment Affects (1) degree Of price transmission And ability of producers And consumers to respond end to price signals (2) The functionality of markets for different Categories of actors • Within country response • Transmission to different parts • the country will be influenced • A range of transmission • Mechanisms. Their effectiveness • Will be influenced by: • Market failures and distortions • Location in a spatial poverty trap • Relative access to productive • Poverty indicators • At household level • Income/production • Purchasing power • Vulnerability • Asset holding • Access to services a • nd public goods • Household level response • Farm diversification • Expanded farm or hard size • Increased off farm income • Complete exit

  6. Aft as Development Tool and Poverty Reduction (1) • Does it imply additional resources? • How different is it from other initiatives? • What lessons do have from other similar arrangements (ACP-CU aid for Trade)? • What is the interest of the donors? In Kenya – • trade policy and regulation-23.2 m $ • 25.6 Us $ Trade development

  7. Aft as Development Tool and Poverty Reduction (2) • What is the trade off between market access and aid for Trade • Preferential erosion and AfT • To what extent will it be incorporated in the ERS, PRSP?

  8. Link Between TDP project and AfT • Why the link? • What is the role of Csos? • How can Csos influence policy? • How are they organised? • Their participation in Trade policy formulation and implementation • Limits in their participation

  9. Link Between TDP project and AfT (2) • Pro-poor growth strategy through designing appropriate national policies • TDP project should influence policy making process in international level (How?) • Research • Lobbying • Meetings • Active participation in ERs,PRSP etc • Identify mitigation measures and those affected

  10. Link Between TDP project and AfT (3) • Limitations of their participation • Capacity • Organisation • Openness • Always one sides • Conflict with other stakeholders

  11. Representation of various actors in EU-ESA negotiations • There seems to be good representation of various actors surveyed in KEPLOTRADE clusters • Poor participation in trade related issues, fisheries & services clusters

  12. Representation of actors in NCWTO • There seems to be reasonably good representation in NCWTO • Apart from agri & services, representation or participation of non-state actors in other clusters/sub-committees is weak

  13. Stakeholders view on representation in the Trade Policy -Making Process • Issues of concern in trade policy making are diverse & technical and no single entity can effectively address all without a strong partnership with other stakeholders • Wide participation necessary to boost ownership & facilitate implementation. • Although the Govt has made substantial effort in involving stakeholders, most actors still feel they are not sufficiently represented.

  14. Perceived Influence of State and Non-state actors • Multilateral organizations, Govt actors and ODAs perceived to have the strongest influence on trade policy making process • Non-state actors consider the influence of civil society, farmer associations and the media on the trade policy-making process as largely weak or only moderate

  15. Thank You • ACKNOWLEDGEMENT • CUTs –Kenya • CUTs- London • Participants

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