RESTRICTEDWORLD TRADE
ORGANIZATIONWT/LDC/SWG/IF/4
19 July 2000
(00-2973)
Sub-Committee on Least-Developed Countries Original:  English
INTEGRATED FRAMEWORK FOR TRADE-RELATED ASSISTANCE
TO LEAST-DEVELOPED COUNTRIES
Report of the Meeting of the Heads of Agencies,
New York, 6 July 2000
Chair:  Mr. Mike Moore (WTO)
1. Mr. J. Denis Bélisle, Executive Director  of the International Trade Centre (ITC), Mr. Rubens
Ricupero, Secretary-General of the United Nations Conference on Trade and Development
(UNCTAD), Mr. Mark Malloch- Brown, Administrator of the United Nations Development
Programme (UNDP), Mr. Mike Moore, Director-General of the World Trade Organisation (WTO),
Mr. Reinhard Munzberg, Director and Special Re presentative to the United Nations of the
International Monetary Fund (IMF), and  Mr. Kemal Dervis, Vice-President for Poverty Reduction
and Economic Management at the World Bank, Heads and representatives of the six core agencies forthe Integrated Framework for Trade-Related Technica l Assistance to Least-Developed Countries (IF),
met at the UNDP Offices in New York on 6 July 2000.
2. The UNDP Administrator, as host of the meeting, welcomed all participants.  He stated that
integration to the world economy was an important recipe for growth and thus the IF had received
enormous interests from the LDCs and the donor community.  He emphasised the importance of
moving forward with a new IF with necessary improvements to be made.
3. The Director-General of the WTO, as Chairman expressed gratitude, on behalf of all the core
Agencies, to the UNDP Administrator for hosting the meeting.  In the absence of any proposals for
amendment, it was agreed  that the meeting would proceed on the basis of the circulated programme
(see Annex 1).
4. The Director-General of the WTO made opening remarks.  He stated that after months of
planning and hard work by the Inter-Agency Working Group (IAWG), he was pleased to convene themeeting of the Heads of Agencies.  The main purpose of the meeting was to consider the results of the
IF review and to decide on the recommendations s ubmitted by the IAWG with a view to improving
the functioning of the IF.  In this regard, he expressed collective appreciation to the World Bank for
funding and task-managing the independent review of the IF, which had served as a useful input into
the review process.  He was confident that decisions to be taken at the end of the meeting wouldstrengthen the IF as a vehicle for the delivery of trade-related technical assistance to LDCs, and would
demonstrate that trade, finance and development agencies could collaborate to reverse the trend of
marginalization, alleviate poverty and contribute to the complex process of development.  It was his
hope that the Heads of Agencies meeting could be used as a forum for exchanging views and
searching for solutions to the inter-linked problems of trade, finance and development.  Moreover, thisand future meetings would help the process of  confidence-building with all stakeholders.
5. He emphasised that globalization had created and would continue to create enormous
opportunities, but at the same time, it was also accompanied by enormous challenges and risks.  TheWT/LDC/SWG/IF/4
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agencies bore a special responsibility for addressing the practical issues and challenges arising from
globalization, and of expanding the opportunities for people in developing and least-developed
countries.  However, many agencies had been unjustly criticized for promoting globalization in a way
that was harmful for the poorest.  He believed that these criticisms were not only unfounded but
wrong as they often failed to recognize the efforts of agencies to achieve economic growth, alleviatepoverty and reverse marginalization of these countries.  He hoped that decisions to be taken would
send a strong signal to those who had unfairly criticized the genuine efforts of agencies.
6. The head of the WTO reiterated that the 48 LDCs deserved special attention; 42 of them were
HIPCs, and therefore should benefit from the HIPC initiative.  In the WTO, there were 29 LDCs that
were already Members, 6 were in the process of accession, and 4 had observer status.  Although WTO
rules took account of the special status of LDCs in various ways, they still faced a number of
difficulties, including domestic policy constraints, physical infrastructure and supply-side difficulties,human and institutional capacity as well as external market access barriers.  He hoped that efforts
underway to improve the delivery of trade-related te chnical assistance to LDCs and to establish trade
in their overall national priorities would help them to integrate into the global economy and thus
would reverse any further marginalization of these countries.
7. With regard to the external market barriers facing LDCs' exports, he informed other agencies
that he had been engaged in consultations with the major trading countries to improve market access
opportunities for LDCs.  At the WTO General Council on 3 May 2000, 13 Members had indicated
their actions or intention to improve market access for LDCs.  He indicated that he would continue to
consult with a view to improving LDCs' market access opportunities and securing duty-free, quota-
free market access for LDCs' products.  He believed that the core agencies, with their distinct andcomplementary comparative advantages, could contribute to address the challenges facing LDCs.  As
no single agency or bilateral donor could, on its own, deal with the complexity of the requests for
assistance to LDCs, a coherent inter-agency approach for the delivery of trade-related technical
assistance was vital.  Therefore, the IF could be an effective instrument for addressing the challenges
confronting LDCs and for assisting them to reap the benefits of the multilateral trading system and ofthe global economy.
8. In conclusion, he stressed the importance of the consensus reached by the IAWG on (I) the
necessity of resources; (ii) enhanced management and governance of the IF; and, (iii) mainstreaming
the IF into existing development architecture so as to make the IF an effective tool for trade
development.
9. Mr. Uri Dadush, Director of the Development Prospects Group at the World Bank, and World
Bank Representative to the IAWG, gave a PowerPoint presentation on trade and economic
development trends amongst the LDCs and prospects for their integration into the trading system and
the global economy.  Based on statistical trends, he illustrated three points.  First, LDCs were not only
the poorest but also the least integrated in the world economy.  Second, barriers facing LDCs were
largely internal rather than external.  Finally, ma ny of the lower income developing countries, who
were not LDCs were in situations of poverty comparable to that of LDCs.
10. Mr. Chiedu Osakwe, Chairman of the IAWG, summarised the process of the review, the
inputs into the review and the recommendations to be taken.  He stated that problems associated with
the IF involved six elements.  First, the IF had no policy framework but only had projects that were
sometimes characterised as a "laundry list".  Second, the IF was essentially an unfunded mandate.
Third, there were conflicting objectives that failed to produce results.  Fourth, the agencies, includingtheir senior management, lacked incentives or commitments in the IF and its coordination.  Fifth,
LDCs' weak institutional capacity and weak resource base limited their ability to own the IF process.
Finally, the IF lacked monitoring capacity after Round Tables had been held.WT/LDC/SWG/IF/4
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11. Regarding the process of the IF Review, he reported that some countries had expressed
concern about the transparency and correctness of procedure of the review exercise and the decisions
to be taken, in light of the fact that Agency Heads had not obtained the prior approval of their
Members.  He noted that the document endorsed by Members at the High Level Meeting in October
1997 had provided for the review as an inter-agen cy exercise, and for LDCs and their development
partners to be consulted.
12. The IAWG chair summarised the recommendations by the Working Group, contained in the
draft Communiqué, to Heads and representatives of the agencies.  The preamble of the draft
Communiqué emphasised that trade reform and liberalization were key elements of national
development and poverty reduction strategies.  To address the current problems of the IF and improve
its functioning, the IAWG recommendations were based on three important elements. The first
element was mainstreaming trade into national development priorities through developmentframeworks, as expressed in the Poverty Reduction Strategy Papers (PRSPs) and the United Nations
Development Assistance Framework.  This mainstreaming exercise would be led and coordinated by
the World Bank.  The second element was to seek donor support for the establishment of an IF Trust
Fund (IFTF).  He reiterated the consensus reached among the IAWG officials that without additional
resources made available, the IF would not be able to function as a vehicle for the delivery of trade-
related technical assistance.  The funding objective was set at US$20 million for the next three years
(2001-2003).  UNDP would take responsibility for the management of the fund.  The third element
was improved governance of the IF structure.  The IAWG proposed the establishment of a Steering
Committee, which would extend the current oversight body, the Heads of Agencies meeting, to
include representatives from donors and LDCs.  At the administrative level, the Administrative Unitof the IF, currently located in the ITC, would be folded into the WTO Secretariat which would
continue to chair the IAWG.  The main function of  the WTO Secretariat was to ensure information
flow among agencies, donors and LDCs.  Finally, on the question of enlargement of the IF to other
developing countries, he reported the position of the IAWG that the proposal should be re-visited in
the foreseeable future when the current improvements have been implemented and seen to beworking.
13. The Chair invited Heads and representatives of the agencies to express their views, including
on the recommendations.  The Executive Director of the ITC expressed his support for the proposed
statement, although he expressed concerns the willingness of donors to contribute to the proposed
IFTF.  He noted that while emphasis on a policy-based approach was important, the new IF had to
focus also on private sector development.  Moreover, since conditions in LDCs (size, level of
knowledge and development) were diverse, flexibility was necessary in pursuing the IF process.Finally, he stressed the importance of agencies continuing with on-going programmes existing under
the auspices of the IF, pending improvements and mainstreaming under the IF.
14. The Vice President of the World Bank felt that the recommendations were balanced.  While
placing trade on the development agenda, through the IF's mainstreaming exercise, would be a great
challenge to his institution, he reiterated his commitment in leading and coordinating the exercise.Regarding the proposed IFTF, he suggested the appointment of a team responsible for fund-raising.
Resource mobilization was a collective responsibility.  Finally, he stated that contrary to some
people's perception of the World Bank and UNDP having resources for financing the mainstreaming
exercise, his institution had no grant available for such trade initiatives.  Available resources were for
lending purposes.
15. The UNDP Administrator stated that the new arrangements for the IF offered additional
benefits arising from the PRSP process and that the new governance structure would allow donors to
have a voice in the Steering Committee where policy matters regarding the IF would be decided. He
emphasised that the IFTF was indispensable for improved functioning of the IF and that the funding
objective of US$20 million was modest enough for donors to show their commitments to the IF.  HeWT/LDC/SWG/IF/4
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had already received positive signals from some donor countries, such as Japan, the United States and
some European countries, and the OECD Informal Meeting of Development Ministers (Tidewater
Meeting), to be held in Bonn, Germany, 9-11 July 2000, would be a good occasion to present the new
IF as well as to seek donor support for the Trust Fund.
16. Following further discussions, it was agreed  that the Agencies should assess the status of the
IFTF on 30 November 2000.
17. The Secretary-General of the UNCTAD said that existing programmes and activities under
the auspices of the IF had to be continued pending any improvements made to the IF.  He proposed
that progress associated with the IF could be reported to the Third United Nations Conference on the
Least-Developed Countries (LDC-III), the highest international body dealing with the LDCs' matters,
which was scheduled to be held in May 2001 in Brussels.  Agency Heads supported this suggestion
and it was agreed  that the progress made on the IF would be reported to LDC-III and its on-going
preparatory process.
18. The Special Representative of the IMF to the United Nations supported the proposed
recommendations for the IF, in particular, the mainstreaming of trade in to overall development
priorities.  However, he cautioned that the mainstreaming exercise had to be carried out in a country
context, allowing a certain degree of flexibility.  The role of the IMF in this exercise would be mainlyon the policy side, particularly in strengthening the macroeconomic environment.
19. The Chair expressed his appreciation for the contributions made by the participants and
sought support for the adoption of the draft Communique, with additional reference to be made to the
LDC-III.  The heads and representatives of the agencies to the Integrated Framework adopted  the
joint Communique by consensus.1
                                                     
1 The joint Communiqué is contained in WT/LDC/SWG/IF/2.WT/LDC/SWG/IF/4
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ANNEX 1
Programme for the Meeting of the Heads of core Agencies of  the
Integrated Framework for Trade-Related Technical Assistance to LDCs (IF)
New York, 6 July 2000
1. The meeting of the Heads of the core Agencies of the IF will take pl ace on 6 July 2000, at UNDP
Headquarters, in the Hank Shannon Conference Room, DCI Building, 21st floor, One UN Plaza, New
York.
2. The programme for the meeting is proposed as follows:
(a) Welcome and opening remarks by Mr. Mark Malloch Brown, Administrator of the
United Nations Development Programme  (UNDP)
- Introduction of Mr. Mike Moore, WTO Director-General, as
Chairman for the meeting
(b) Remarks by Mr. Mike Moore
(c) "Trade and economic development trends amongst the LDCs and prospects for their
integration into the trading system and global economy"
- Presentation by Mr. Uri Dadush, Director, Development Prospects Group,
World Bank and Bank Representative on the IAWG
(d) "The IF Review: inputs to the review and recommendations for improvement in Draft
Communiqué, from the IAWG"
- Presentation by Mr. Chiedu Osakwe, Chairman of the IAWG
(e) Exchange of views by Heads of Agencies or Representatives of Agencies:
- Mr. Denis Bélisle, Executive Director, ITC
- Mr. Kemal Dervis, Vice-President, World Bank,
- Mr. Mark Malloch Brown, Administrator, UNDP
- Mr. Mike Moore, Director-General, WTO
- Mr. Reinhard Munzberg, IMF Special Representative to the UN
- Mr. Rubens Ricupero, Secretary-General, UNCTAD
(f) Proposal by Mr. Mike Moore, Director -General, WTO, for adoption of Draft
Communiqué
(g) Adjournment of meeting of Heads of Agencies
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