Forty-seventh session of the Joint Advisory Group on the International Trade Centre
06 May 2013
Ms. Patricia Francis, Executive Director of ITC,
Excellencies,
Distinguished Delegates,
Ladies and Gentlemen,
It gives me great pleasure to welcome you to the forty-seventh annual meeting of the Joint Advisory Group, and to speak about ITC's work, including its joint projects with UNCTAD.
A year ago, I briefed you on our thirteenth ministerial conference, which had just been held in Doha, Qatar, and on the outcome of the conference as contained in the Doha Mandate. Central to the Doha Mandate is the notion of development-centred globalization. While acknowledging the importance of generating economic growth, the Doha Mandate highlights the imperative to spread development dividends broadly and equitably, and to make the development process more inclusive and sustainable - both socially and environmentally. I am very pleased to report to you that the ethos of the Doha Mandate has been incorporated in the concrete programmes of UNCTAD, and in the way we think and work. This ethos is also ingrained in the work of ITC, as our collaboration with ITC has shown us.
Ladies and Gentlemen,
Over the past twelve months, ITC and UNCTAD have continued to collaborate in a number of different areas:
ITC has continued to work with UNCTAD's Virtual Institute on building capacity in universities and research centres in developing and transition countries. This collaboration has enabled the use of market-analysis tools and methods to assess trade performance and identify export potential. More than 120 beneficiaries from Caribbean countries, China, the Russian Federation and the United Republic of Tanzania, 71 per cent of whom are women, were trained as a result of this partnership.
ITC has also played an active role in reinforcing Empretec, a programme of UNCTAD's Division on Investment and Enterprise. The Empretec programme is designed to promote the creation of sustainable, innovative and internationally competitive small and medium-sized enterprises (SMEs). Thanks to ITC, there are now seven Empretec centres equipped with ITC's Modular Learning System, which is designed to respond to the growing need of SMEs to develop skills in supply chain management - a key area for competitiveness and export performance, as well as for entrance into global value chains (GVCs).
ITC worked in partnership with UNCTAD, and other organizations, on the first global BioTrade Congress, which was held in Rio de Janeiro during the Rio+20 Conference. The theme of the Congress was Biodiversity - The Life of the Green Economy. It is our hope that this Congress will evolve into a permanent forum for BioTrade and biodiversity stakeholders to share their experiences and lessons learned, and to establish further cooperation on implementing sustainable practices that can contribute to "greening" biodiversity-based sectors.
UNCTAD and ITC also collaborated on organizing the second African Organic Conference. This Conference was held in May 2012 in Lusaka, in cooperation with the Government of Zambia, the Organic Producers' and Processors' Association of Zambia, and Grow Organic Africa, under the auspices of the African Union and the International Federation of Organic Agriculture Movements. The Conference provided a platform for public-private sector dialogue and South-South and triangular cooperation on mainstreaming organic agriculture into the African development agenda.
In addition to these joint projects, ITC continued to complement UNCTAD's work effectively. To cite a couple of examples:
ITC's Global Platform for Action on Sourcing from Women Vendors has proved to be a success story. Over the last two years, it has facilitated sales of over $20 million by women vendors in developing countries. Similarly, UNCTAD's Empretec Women in Business Award aims to support women-run enterprises in becoming more competitive and accessing foreign markets. Last year, ITC helped four women entrepreneurs from the Empretec network to participate in the Women Vendors Exhibition and Forum, allowing them to access a network of 300 members - including multinational corporations - with a buying power of $700 billion annually.
You may recall that in 2011, UNCTAD and ITC, in collaboration with the World Bank and the African Development Bank, launched the Transparency in Trade (TNT) initiative, with the aim of improving trade policy data collection - especially on non-tariff measures (NTMs) - and of making this data widely available.
As a leading agency within the TNT initiative, UNCTAD coordinates the collection of NTMs from member States' official sources. ITC complements this official data collection with large-scale business surveys. From a business perspective, these surveys identify measures that exporters and importers perceive as problematic. ITC has carried out surveys in 23 countries to date, and has held stakeholder roundtables in most of the beneficiary countries to discuss the analysis produced, as well as follow-up actions. The NTM surveys are a good example of ITC's pragmatic approach, as they often identify NTM-related costs that can be reduced by focusing on domestic trade facilitation and on technical and logistical infrastructure. These activities carried out by ITC are a useful complement to UNCTAD's work with official NTM data - a good example of synergy.
ITC has done substantial work to keep the tariff data accurate and up to date. I would like, in particular, to congratulate ITC on the new Market Access Map online application, which has almost 300,000 users worldwide. This Map is instrumental in ensuring transparency, increasing awareness and providing information to both policymakers and entrepreneurs on the changing trade policy landscape. Governments as well as private enterprises need to be kept informed of the specific trade barriers and regulations in potential export markets. They also need to understand which of these are the most restrictive, so that trade negotiations and trade facilitation mechanisms can be centred on addressing those of higher priority. Moreover, the TNT initiative is valuable in identifying and containing a possible protectionist backlash in trade policy, especially in periods of economic crisis.
I am confident that the TNT programme will further cement UNCTAD's close collaboration with ITC, as well as with other related international organizations such as the World Bank and WTO.
Ladies and Gentlemen,
I have for several years underlined the importance of creating a culture of results-based management in UNCTAD, where strategic planning, a logical framework approach, and risk assessment are central to decision-making. In such a process, indicators are critical in order to demonstrate the accountability of international organizations vis-à-vis the donor community and beneficiary developing countries, as well as their staff. I am pleased to note that ITC has followed the same approach, and I am proud to witness the fruits of these efforts. I am also pleased to see that stories of our successful projects and services are now being picked up by the international media.
Excellencies,
Distinguished Delegates,
Ladies and Gentlemen,
As I get closer to the completion of my second and final term as Secretary-General of UNCTAD, allow me to briefly offer some thoughts on some of the key issues that I believe will affect the wider context in which ITC works over the next few years.
Firstly, stagnation of the Doha Round has led to significant efforts towards regional economic integration in many parts of the world. Key mechanisms for such integration are regional and bilateral trade agreements. These agreements are estimated to cover nominally over 50 per cent of world trade. In addition, they are increasingly taking on the character of a "comprehensive economic partnership agreement", as many include an investment treaty, and commitments in the WTO-plus and WTO-extra areas.
The development potential of regional integration and cooperation has created opportunities for countries to benefit from larger markets, economies of scale, and economic diversification. In particular, South-South cooperation has proved instrumental in facilitating broader policy and regulatory coordination to promote trade, as well as in pooling resources and building common regional transport networks and infrastructure for closer market connectivity.
South-South trade has rebounded dramatically from the disruption that took place at the beginning of the financial crisis. Consolidating a trend that started a decade ago, South-South exports are particularly dynamic today, representing 55 per cent of the total exports of developing countries.
The expansion of South-South trade is likely to continue. This should be taken into consideration in our efforts to support trade promotion institutions.
Secondly, the gains from expanded trade have been spread unevenly, not only across countries but also within them. Indeed, many commodity exporters have enjoyed favourable price movements since the start of the millennium. Nevertheless, faster growth in commodity exports has not, to date, been accompanied by economic diversification. And the beneficial impact on poverty reduction has yet to be seen in many countries, particularly the least developed countries (LDCs). More attention should therefore be placed on the link between trade and employment, and the link between trade and poverty reduction.
In this context, ITC may consider tailoring its interventions in order to more actively promote forward and backward linkages between the traded sectors and industries - be they extractive or assembly - and the rest of the economy, so as to spread the gains of trade more widely and support employment, structural transformation and poverty reduction.
Thirdly, the importance of agriculture - an area in which ITC already does a lot of good work - is likely to grow. The recent food crisis has served as a wake-up call to refocus on the agricultural sector in many developing countries. Agricultural development facilitates economic take-offs, promotes higher value addition, and can generate positive externalities for society, for example on poverty reduction, employment and food security. And yet, farmers in developing countries - 1.5 billion of whom are smallholders among whom poverty is prevalent - often lack basic support to use trade to increase their incomes. ITC can focus on private-sector support to agriculture development by facilitating, among other things:
Better infrastructure that can link producers to regional markets and increase productivity and competitiveness;
Enhanced market information systems to provide information about buying and selling opportunities;
Export promotion initiatives such as marketing (e.g. packaging, labelling, and organic products), which can help to achieve better prices; and
Support to meet standards - for example sanitary and phytosanitary standards, or private standards such as EurepGAP.
Empirical evidence has shown that it is often large companies that benefit from international trade. Supporting the creation of firms or cooperatives big enough to participate in international trade may therefore be important.
Fourthly, there has been a major transformation in the manner in which trade is conducted. The fragmentation and geographical spread of production within global value chains (GVCs) is allowing countries to specialize in trade in different "tasks" rather than products. UNCTAD's most recent research finds that the majority of developing countries, even the poorest, are increasingly participating in GVCs. Access and integration in such GVCs can offer significant opportunities for developing countries to build productive capacities and achieve industrial upgrading. However, there are also risks. These include social and environmental concerns, as well as the risk of being locked into low value added tasks. Well-focused and mutually reinforcing strategies for trade and investment - and for development generally - are essential to support the upgrading of productive capacities with a view to moving up the value chain, capturing greater value addition and generating employment.
Fifthly, there is the issue of sustainability. The coming decade will usher in a new set of United Nations development goals with more attention paid to qualitatively pursuing human development without exceeding the carrying capacity of the environment. It is clear that effective climate-change mitigation will require significant changes in production processes, both in advanced and developing economies. The transition to a more sustainable production structure will be inevitable, and can offer opportunities. And, more importantly, there are important "early mover" advantages for environmental goods; we should encourage developing-country businesses to get involved. In this context, we may wish to ensure that we extend the necessary support, with regard both to domestic capacity enhancement and to international trade facilitation.
Here I wish to highlight UNCTAD's Investment Policy Framework for Sustainable Development (IPFSD), which was launched in June last year. The IPFSD is a comprehensive guide for national and international investment policymaking, with concrete options for placing inclusive growth and sustainable development at the heart of efforts to attract and benefit from foreign investment. As a "living document" that can be discussed and updated continuously, the IPFSD consists of eleven core principles, which then inform the specific guidelines for national investment policies; as well as policy options for international investment agreements. The IPFSD is designed to serve as a key point of reference for investment policymakers, and to become the basis for capacity-building and technical cooperation in this area.
Ladies and Gentlemen,
As many of you know, the establishment of ITC as a joint venture of the General Agreement on Tariffs and Trade (GATT) and UNCTAD in 1964 demonstrated a recognition of the fact that market access and better terms of trade alone do not solve the problems faced by developing countries in the world economy. It was already known at the time that ultimately these countries would only be able to benefit fully if businesses were able to take advantage of the opportunities. Achieving this would require targeted technical cooperation and capacity-building. In recent years, there has been a renewed recognition of the prime importance of productive capacity - or, in ITC terms, business export capacity. Today, hardly anyone would dispute that supporting export capacity constitutes a core element of modern trade strategies.
Over the last decade, I have had the privilege of leading the WTO secretariat and then the UNCTAD secretariat. I have seen ITC undergo many changes. One of its most enduring strengths has been its ability to continuously evolve - to adopt new concepts and approaches to providing assistance to countries and their enterprises.
Like UNCTAD, ITC has developed a wide range of partnerships in order to foster the kinds of collaboration that maximize the delivery of assistance at the global, regional and national level, and also at the subnational level, with individual SMEs. Partnerships are essential today to reach out to a wider range of beneficiaries and to make efficient use of scare resources. While UNCTAD deals with trade policy matters, and WTO with trade rules, ITC complements both organizations by connecting businesses to global trade. It is my hope that the complementarities between the three major Geneva-based trade institutions will continue to be enhanced in the coming decade. With your vision of Export Impact for Good, I hope that ITC will continue to rise to the global challenges that lie ahead.
Last but not least, allow me to express my profound gratitude to Patricia Francis for her able leadership and achievements over the past seven years. I extend to her my warmest wishes for all her future endeavours.
I wish you a very successful meeting.
