UNIDO General Conference UNIDO ~ UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION ~ UNIDO ~ UNITED...

UNIDO General Conference UNIDO ~ UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION ~ UNIDO ~ UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION ~ UNIDO

TRADE CAPACITY BUILDING- SIDE EVENT 30 NOVEMBER 2005

Enabling Developing Countries to

Participate in International Trade

Strengthening the Supply Capacity



The Issue:• 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!



• 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:



• 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



TBT and SPS Agreements

• 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



Current situation:

• 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



IMPLICATIONS FOR DEVELOPING COUNTRIES

• 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



UNIDO Initiative: Enabling Developing Countries to Participate in International Trade- Strengthening the Supply Capacity”

• 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.



Trade Capacity Building

• 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.



• 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



An example• 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



Funding 2001-2005: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.

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