STAKEHOLDERS IN TRADE POLICY FORMULATION

OUTLINE

1. Introduction

2. Stakeholders: Roles and Means of participation

3. Concluding Remarks

4. Appendix: Some Factors that Affect/Shape Trade Policy Outcomes

INTRODUCTION• First Republic and Second Republic were

characterised by no consultation of local stakeholders

• Third Republic (post 1991 multi-party elections) characterised by– increased acceptance of democratic principles of

inclusiveness, acknowledgement of rights and freedoms

– Political and economic activities (including trade) were liberalised and public enterprises privatised

– Consultation and participation of non-state actors in management of public affairs was very limited

– Institutions, facilities and regulatory regime virtually absent; skills, knowledge and experience lacking

Introduction ….– Consultation was limited to GRZ and Donor

representatives

• Unfavourable outcome of programmes devised by GRZ and donors coupled with protests of dissatisfaction with “unfavourable” programs and arrangements led to:– Opening up the process of formulating

development programmes to local non-state actors

– Civil society organised according to theme/sector of interest (CSPR, Jubilee 2000, CSTNZ)

Introduction…..• In second part of the Third Republic

– GRZ and donor support and encouragement of non-state actor participation in management of public affairs – PRSP, FNDP, Vision 2030 and line Ministry Plans and Strategies

– Post HIPC/MDRI discourse on accountability and transparency – effectiveness of public expenditure, debt strategy and aid effectiveness (Paris Declaration and JASZ)

– Standard requirement for Ministries to carry out extensive stakeholder consultation before preparing Cab Memos

STAKEHOLDERS:ROLES AND MEANS OF PARTICIPATION

• National Level stakeholders

• Regional Level stakeholders

• Multi-lateral International Stakeholders

• Bilateral International Stakeholders

NATIONAL LEVEL • Ministry of Commerce, Trade and Industry (MCTI)

is mandated to prepare the Trade Policies and Strategies (like National Export Strategy). It has a number of institutions that facilitate trade (ZABS, ZDA, Weights and measures). It hosts a number of donor-funded projects as well – PSD, PSDCBP, JITAP/IF

• Ministry of Finance and National Planning (MoFNP) prepares overall national development plans/strategies in which is one of the components. MoFNP views trade policy proposals in terms of their impact on the fiscal and monetary objectives. Proposals that adversely affect fiscal and monetary policy objectives are usually not taken on unless there is very high political commitment – as is the case with COMESA, SADC regional trade liberalisation agenda.

National Level …….• Ministry of Agriculture and Cooperatives

(MACO) is a major stakeholder, but not as active; may contract trade policy position because of food security, health, sanitary and phyto-sanitary concerns. Has trade facilitating institutions Mt Makulu, SCCI

• Ministry of Foreign Affairs (MoFA) is more concerned with arrangements that touch on international relations and political governance such as NEPAD, ACP-EU, SADC and AGOA

• Ministry of Justice (MoJ) renders legal opinion and advice on Trade policy positions taken by the Zambian Government. Its increasingly being involved in the formulation and negotiation of trade policy

National Level …..• Private Sector has participated in government

policy formulation for some time, but not as consistently when the discussions are protracted – Little time, financial and human resources– Some times have conflicting interests– No proper representation of weaker interest groups

(out-grower schemes)– MCTI engages private sector through associations

(ZACCI, ZNFU, ZCSMBA, PSDA, ZBF) or through the different sector interest groups (Chamber of Mines; ZAM; ZEGA; Tobacco, Timber, & Honey Producers Association of Zambia; OPPAZ, Kaleya Smallholder Scheme; wildlife interest groups)

National Level …..– Some companies spend a lot of resources in

trade policy discussions. Zambia Sugar (ACP-EU Sugar protocol); Swarp Spinning Mills and Clark Cotton (AGOA); Kalungwishi and Kafue Sugar probably interested in Great Lakes Region Market through SADC/COMESA

– In mining sector, large-scale miners are more concerned with international metal price movements, but small-scale miners participate more in trade policy processes

– Generally businesses show up when supply capacity issues are being addressed through various incentive schemes or possibility of low cost capital

National Level …..• Non-Governmental Organisations (NGOs)

– Local NGOs (PELUM, ZCSD, ODCM, ZARD, CSPR) participation have not always been consistent. Now there is CSTNZ whose core business is trade related issues and is more active and consistent in following up issues

– International NGOs (JTCR, Caritas, Oxfam, CUTS, Ms, FEZ/GTZ, KEPA) have supported local stakeholders participate in trade policy process through capacity building and sponsorship.

REGIONAL LEVEL• SADC

• COMESA

• NEPAD

• Civil Society (Africa Trade network, SEATINI, Economic Justice Network, Southern Africa People’s Solidarity Network)

MULTILATERAL ORGANISATIONS

• GATT/WTO is the main international body that specifically promotes open, free and rule-based world trade regime. WTO is very influential as it s used by big economies to secure more market shares around the world. Zambia can make use of waivers for LDCs to shape its trade policy.

• Other United Nations organs– UNCTAD (Blue Book, JITAP/IF,)– UNDP (MDG 8:Global Partnership for Development)

no coherent approach to achieve it through Aid, Trade and Debt Relief). Strong case that these are addressed through Aid-for-Trade, Monterey Consensus, HIPC/MDRI

– World Bank influences trade policy through various studies and publications (Doing Business Survey, World Trade Indicators) and programmes (PSD)

BILATERAL ARRANGEMENTS• Bigger economies attempt to capture

sources/markets of raw materials in small economies through unilateral offers of trade preferences, or try to by-pass WTO rules, regulations. Others seek political support on international issues they have vested interests.

• However these may not affect official trade policy of the beneficiary country

• European Commission: preferential treatment and development assistance offered by the EC to the ACP countries under the Lome Convention or Cotonou Agreement. LDCs can benefit from EBAs as well

Bilateral Arrangements …..• USA: AGOA and programs like MCA-ZTP,

MATEP, PROFIT• Japan: Japanese International Conference

on African Development (TICAD) and Triangle of Hope (ToH) in Zambia that is focussed on investment promotion of export-oriented industries, efficient public service and incentives to enhance competitiveness on international market

• Chinese Initiative• Canada Initiative• India-Africa

CONCLUDING REMARKS• Zambian stakeholders have a fair chance

to participate in trade policy formulation• How effective/influential depends on:

– Increased Political/Economical Will of decision makers

– Ability of stakeholders to make regular, technically informed contributions. Trade policy formulation or negotiation is complex, therefore requires a lot of dedication and resources to effectively participate

– Regular, timely feedback of developments by duty-bearer to all stakeholders. Don’t leave this to non-state actor representatives

• Better coordination, harmonisation of policies is important to avoid sending conflicting signals

Concluding Remarks ….• Ensure that provisions under PSD, DTIS,

JITAP/IF, Blue Book complement each other and in conformity with what is trade policy and FNDP, Vision 2030

• Any preferential market access treatment bestowed given should be equitably distributed among private sectors of various supply capacities as incentive to stay engaged with capacity to supply