RESTRICTEDWORLD TRADE
ORGANIZATIONWT/IFSC/M/1
28 August 2001
(01-4125)
Integrated Framework Steering Committee
First Session
NOTE ON THE MEETING OF 15 MARCH 2001
Chair: Ambassador Henrik Reé Iversen (Denmark)
A. OPENING STATEMENT BY MR. MIKE MOORE, DIRECTOR-GENERAL
1. The Director-General welcomed the representatives of the core agencies, donor community,
and Least-Developed Countries to the first meeting of the Integrated Framework Steering Committee
(IFSC).
2. He briefly recalled the history of the Integrated Framework.  The Integrated Framework had
been established in the late 1990s in an effort to increase the benefits that Least-Developed Countries
derived from trade-related technical assistance made available to them by the core agencies and from
other sources.  It had been established as an institutional mechanism for coordinating and deliveringtechnical assistance to Least-Developed Countries.  More generally, it had been established as a
mechanism to assist Least-Developed Countries successfully to integrate into the global trading
system.  The Integrated Framework had been endor sed in October 1997 by a High Level Meeting held
in Geneva.  It had  been in operation for 4 years.
3. A review of the Integrated Framework had b een initiated in November 1999. The review had
culminated in a meeting of Heads of the Core Agencies in July 2000 which had taken decisions to
improve implementation of the Framework.  Key elements for improving implementation  included
clarifying the objectives of the Integrated Framework, working to mainstream trade priority areas of
action into national development plans and strategies for poverty reduction, and transforming the
Framework from an unfunded to a funded mandate.  Su bsequent to these decisions, and following
extensive consultations involving all partners in the Integrated Framework, a Pilot Scheme had been
adopted in February 2001 further to advance work on the Integrated Framework.
4. Key features of the Pilot Scheme included:
(a) agreement to initiate work on "mainstreaming a trade integration strategy chapter (or
trade priority areas of action) into country development plans and poverty reduction
strategies", for countries that chose to do so;
(b) establishment of an Integrated Framework Trust Fund;
(c) elaboration of a coordinated, sequenced and prioritised programme of technical
assistance, within the policy framework of the Poverty Reduction Strategy Papers
(PRSPs).  This decision recognized and addressed a concern raised by donors, as well
as agencies, that trade-related technical assistance, if not delivered within a coherent
policy framework, would not achieve the desired effect of assisting countries to buildcapacity for productive and sustainable growth; and finally;
(d) establishment of Integrated Framework Steering Committee, for improved
governance in the relations amongst LDCs, donors, and the core agencies.WT/IFSC/M/1
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5. The review exercise and adoption of the Pilot Scheme had been an important contribution to
the joint efforts to revamp the Integrated Framework and make it a truly viable model for the delivery
of trade-related technical assistance to Least Developed Countries.  Anyone who had been associated
with the Integrated Framework knew how difficult, complex and challenging its implementation had
been.  However, with willingness and constructive support from all players, the Framework had beenredesigned into a package that could greatly assist Least-Developed Countries to integrate into the
multilateral trading system and global economy.
6. The Director-General paid tribute to the core agencies, development agencies, donor countries
and the Least-Developed Countries for their hard work, commitment and cooperative spirit.  He said
that their unwavering persistence - in the face of complex coordination challenges amongst agencies
with distinct institutional mandates, donors with  legitimately different emphasis, and LDCs with
complex trade and development needs – had made this Steering Committee meeting possible.
7. He acknowledged  the role  of the Least-Developed Countries, applauding the business-like
attitude that they had demonstrated in responding to the initiatives by donor members at the early
stages of negotiating the Pilot Scheme.  On behalf of the Steering Committee, he expressed particular
appreciation to Bangladesh as overall Coordinator, and to Tanzania as rotating Coordinator.  He said
that the response of the Least-Developed Countries provided further evidence that the WTOmembership was committed to seeking practical solutions to problems.
8. On behalf of the Steering Committee, he also paid tribute to the donor members who had
made progress on the Integrated Framework possible.  He also recognised the support that had been
provided by those who would contribute to the Trus t Fund, as well as by those who would provide
bilateral assistance within the ambit of the Integrated Framework.  Both forms of support weremutually supportive and complementary.
9. Mr. Moore said that the international economic community had passed an important first
coordination test in the common objective to assist Least-Developed Countries.  The progress that had
been achieved, so far, was an important contributi on to confidence building in the multilateral trading
system.  There was a need  for an effective Integrated Framework, as a mechanism for coordinationamongst  agencies, donors, and the LDCs.
10. He said that the Steering Committee presented a unique opportunity.  It was important to bear
in mind the value of this Committee.  First, the Steering Committee responded to the urgent need to
improve governance and management of the Integrated Framework.  Prior to the mechanism of the
Steering Committee, the Integrated Framework had been vulnerable on management considerations.
A common forum was required, where members, and agencies could meet to review Integrated
Framework activities in an open and transparent manner.  Furthermore, there had been discontinuitiesand a lag between meetings of agencies, reports to donor members, and feedback to agencies.  The lag
in information flow had created difficulties and compounded coordination difficulties.  The Steering
Committee would improve coordination amongst agencies, members of the different institutions,
donors, and LDCs.  Furthermore, it should ensure that all participants would operate at one speed,
which had not been the case before.
11. Second, the Steering Committee would respond to the long-standing concern by other core
agencies that decisions on the Integrated Framework, involving 6 different agencies with different
Boards and memberships, had been taken by the membership of one organization – the WTO.
Although the Integrated Framework was a joint undertaking, decisions had been taken by one
membership, and the meetings had been conducted on the basis of WTO rules of procedure.  Theconsequence had been that in some instances, core agencies had been excluded from the final stages
of consultation prior to decisions.  This situation needed correction.  Under the Steering Committee,
all participants, as agreed in paragraph 7 of the adopted Pilot Scheme would be equal, and the only
governing rules of procedure would be those Members agreed amongst themselves.WT/IFSC/M/1
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12. Third, one of the advantages of the Steering Committee was to ensure full ownership by all
stakeholders - donor members, LDCs, and agen cies.  This  would ensure responsibility.
13. Finally, the governance arrangement in the Steering Committee would enable all participants
to build confidence, devoid of politics.  It woul d provide a forum for serious discussion and practical
solutions in the use of the Integrated Framework to facilitate the delivery of trade-related technicalassistance to Least-Developed Countries.
B. A
DOPTION OF THE DRAFT AGENDA
14.  The Steering Committee adopted the proposed agenda as attached in Annex 1.
C. ELECTION OF THE CHAIR AND THE VICE-CHAIR
15. The Director-General proposed that the Steering Committee agree to elect H.E. Mr. Henrik
Reé Iversen, Permanent Representative of Denmark, as Chairman of the Steering Committee, and
H.E. Mr. Victor Lechesa, Permanent Representative of Lesotho, as Vice-Chair.
16. It was so agreed.
D. REMARKS BY THE ELECTED CHAIR
17. The Chairman thanked the Steering Committee for his election.  He said that it was  an
honour to be the first Chairman of the Steering Committee which had just been created, and that
Members of the Committee could work together to meet the important challenge.  He shared theviews expressed by the Director-General that the Steering Committee was a rare opportunity, offering
the possibility to use the mechanism of the Integr ated Framework to improve co-ordination and assist
the delivery of trade-related technical assistance to the LDCs within a coherent policy framework, and
to mainstream trade into overall development plans and poverty reduction strategies for LDCs.
18. He appealed to Members of the Steering Committee to set  the right atmosphere amongst
donors, LDCs, and the agencies at this inaugural meeting.  The rules that the Committee set at this
meeting would be the key benchmark for th e future of the Integrated Framework.
19. The representatives of Tanzania, the European Communities
, Norway , Bangladesh , the
International Monetary Fund (IMF), Canada , the United States , Haiti , Mauritania , Japan , Sweden , the
Netherlands, Yemen , the United Kingdom , the World Bank  and the International Trade Centre (ITC) ,
expressed satisfaction with the appointment of the first Chairman of the Steering Committee, and
offered him full support in the work ahead.
E. EXCHANGE OF VIEWS ON THE TERMS OF REFERENCE OF THE IF S TEERING COMMITTEE
20. The Chairman said that the terms of reference for the Steering Committee were set out in
paragraphs 7 and 8 of the document of IF Pilo t Scheme, as contained in WT/LDC/SWG/IF/13.  The
two paragraphs had carefully been negotiated and reflected a balance of views and positions of all
Members.  They were broadly indicative of the functions of the Steering Committee, with sufficientflexibility to act as the highest governing body of the IF.  Since  this was the initial learning period for
all partners, the best approach would be to proceed with care, drawing on the experience of the recent
past.  In his view, the Steering Committee should not discuss the details of the terms of reference at
this meeting, but could take it up at a later stage once the Committee became accustomed with its
functions.
21. The representative of Tanzania said  that there had been extensive discussions on the terms of
reference, when the Sub-Committee on LDCs adopted the IF Pilot Scheme at its meeting held on 12WT/IFSC/M/1
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February 2001.  He had no further comment.  However, he asked whether the Steering Committee
would identify pilot countries.
22. The representative of the European Comm unities said that the Communities had fully
endorsed the objectives of the Integrated Framework since its inception, and had made contributions
to the full integration and development of LDCs.  As the Third UN Conference on LDCs approached,
the Communities would intensify its involvement in th e IF, with a view to contributing tangibly at the
conference.  In this regard, he announced that the Communities would provide 200,000 Euro for
funding  to the IF.  The Communities hoped for early implementation of the Pilot Scheme.
23. Regarding the terms of reference for the Steering  Committee, the representative said that the
Steering Committee should concentrate on providing guidelines on policy.  However, it should not
micro-manage the day-to-day operations of the IF, which were the responsibility of the IAWG.
24. The representative of Norway welcomed the first meeting of the Steering Committee after
long, challenging, and even frustrating, negotiations on the Pilot Scheme.  Regarding the role of the
Steering Committee, he said that the Committee should provide policy oversight and policy
coordination.  However, the Steering Committee s hould avoid any micro-management of day-to-day
business of the IF.
25. The representative of Bangladesh congratulated the six IF core agencies, in particular, the
WTO, for convening this first meeting of the Steering Committee.  After 4 years of frustrating
experience, the IF seemed to be finally bearing fruit, as a result of hard work by all stakeholders.
Bangladesh, on behalf of the LDC community, thanked donors for their renewed energy and interest
in the past few months, which had brought the IF to the present stage.  Moreover, he extended
appreciation to the donors, both to those who would pledge as well as potential donors.  It wasimportant to involve all donors so that the inte rnational donor community would work together to
assist LDCs in fighting poverty.  He appealed to potential donors to join this renewed effort on
revamping the IF.
26. Regarding the responsibilities of the IF Steering Committee, the representative said
Bangladesh would like more information on the selection process of countries, and that the selectionprocess should be transparent.  Past experience with the IF had shown a degree of uncertainty.  It was
therefore important to have written transparent guidelines for the process of selection of countries.
27. The representative of the IMF expressed appreciation for the remarks by the Director-
General, in particular, that the IF Steering Committee would address the concern that the six core
agencies had not fully participated in the IF decision-making process.  He sought clarification
regarding the role of the core agencies in the decision-making process of the Steering Committee, as
paragraph 7 of the document appeared to restrict decision-making only to the contributing donors.
28.  The representative of Canada stressed four points.  First, it was important for all IF
stakeholders – donors, LDCs and the agencies - to build on the progress that had been achieved so far.
The objective of the IF was to assist developing countries in focusing on trade, which would enable
them to generate resources and dividends for poverty reduction.  If any country wished to achieve
higher standards of living for its people, trade needed to be mainstreamed in the country'sdevelopment priorities.   The importance of the trade minister had to be recognised as much as other
ministers in policy decision-making.
29. Second, inter-agency cooperation and coordination were crucial for the management of the
IF.  Inter-agency coherence was required, not only on process, but also in terms of WTO-compatible
trade policy.  Moreover, trust amongst the agencies needed improvement in order for them to achievethe common objectives.  More transparency was required.WT/IFSC/M/1
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30. Third, it was important for all IF stakeholders to exercise patience.  The Pilot Scheme was
essential for establishing guiding principles fo r other LDCs.  While some LDCs had expressed
frustration with the IF in the past, it was important to make sure that the pilots would bring positive
results.  Otherwise, the IF again be viewed as an empty shell.
31. Fourth, it was essential to communicate to the outside world what the IF was trying to achieve
in providing assistance to LDCs.  While the IF had not been a success, thus far, the public ought to
know the efforts by donors, LDCs and agencies to work towards common objectives.
32. The representative of the United States said that despite additional resources that would be
made available for the IF, Members of the Steering Committee should not forget the original purpose
of the IF, and should focus on the issues of co-ordination and collaboration.  She also re-assured
Bangladesh that the United States was fully engage d in the IF Pilot Scheme through participation in
the Steering Committee, and also through bilateral activities within the context of the IF.
33. The representative of Haiti said that the participation of LDCs was important in the selection
process of pilot countries since they were the  beneficiaries of the IF process.  The Steering
Committee offered a forum for donors, LDCs and the agen cies to discuss important issues such as the
selection of pilot countries.  It was important, at this stage, for the Steering Committee to set out
guiding principles for the IF process.  He also shared the concern expressed by the IMF regarding therole of the agencies in the Steering Committee.
34. The representative of Mauritania stressed that it was important to start something concrete
before LDC-III.  While the selection of pilot countries was an important issue, it was also important
for LDCs to support the success of the Pilot Scheme. Solidarity was important amongst LDCs,
development partners and agencies, as well as amongst LDCs themselves.  The selection of pilotcountries should not be politicised.  It was important to ensure the success of the initial pilots, which
would lead to the extension to other pilots.  Mauritania was prepared to extend its support to
whichever countries would be selected for the pilots, which would ultimately lead to success for all
LDCs.
35. The representative of Japan expressed appreciation for the invitation not only to contributing
donors, but also bilateral donors.  Japan would actively participate in the Steering Committee.  Japan
provided a wide range of technical assistance to the LDCs through the Japanese International Co-
operation Agency (JICA), and would coordinate their bilateral and multilateral assistance within the
framework of the IF.  In this regard, the Government of Japan had held a workshop for trade-related
capacity building in Okinawa on 4-5 March 2001, where the IF had been well received by all
participants from developing and developed countries, as well as development officials from the
Government.
36. The representative of Sweden welcomed progress that had been made to the IF.  This was
desirable in view of the forthcoming LDC-III in  May 2001.  Given its tradition, Sweden did not wish
to see the  Steering Committee  micro-manage  the day-to-day operations of the IF.  It needed only to
provide general guidelines.  Furthermore, th e respresentative announced that Sweden would
contribute 3 million Swedish Crones, approximately US$ 300,000, to the IF Trust Fund.
37. The representative of the Netherlands said that his country was fully in support of the IF and
would provide financial support for the implementation of the Pilot Scheme.  He reiterated that the
responsibilities of the Steering Committee should be confined to those defined in paragraph 8 of the
Pilot Scheme document: (i) setting policy guidelines, coordination, and providing oversight; and, (ii)
assessing progress of the IF.   It was important for the Steering Committee to play the role as specifiedand, therefore, it should not micro-manage.  Regarding the selection of pilots, he fully shared the
views expressed by Canada.WT/IFSC/M/1
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38. The representative of Yemen welcomed the IF Pilot Scheme and expressed appreciation for
those donors who had undertaken commitments to provide resources for the implementation of the IF.
Regarding the rules and conduct of the Steering Co mmittee, he fully agreed with the views expressed
by Canada.
39.  The representative of Tanzania wished to clarify his previous intervention by saying that he
fully agreed with the views expressed by Canada, which was subsequently supported by the
Netherlands.  While it was not for the Steering Committee to select pilot countries, at this meeting,
nevertheless, it was important to discuss general prin ciples for the selection process.  It was not the
matter of micro-management.
40. The representative of the United States shared the views expressed by Tanzania.  The Steering
Committee could discuss the parameters for selecting p ilot countries, as they would have an impact on
the complementary activities that the United States  was contemplating within the context of the IF.
She also stressed the importance of the success of the pilot cases.  Success would make possible the
extension of the scheme to other LDCs.
41. The representative of the United Kingdom suggested that the Steering Committee discuss the
issue of the selection of pilots under agenda item J: Presentation by World Bank on the draft Pilot
Phase Work Programme.
42. The Chairman, on behalf of the Vice Chairman and himself, expressed appreciation for the
support of Members of the Steering Committee. Regarding the concern that had been expressed by
LDCs on the role of the Steering Committee, he said that one of the objectives for the establishment
of the Committee was to ensure  transparency, which had been lacking under the "old" IF.  At the
same time, the Steering Committee should not dictate the procedural details as to how the IAWGshould conduct routine business.  He proposed that the Steering Committee should take up the
questions and concerns by Members under Agenda Item J.
43. It was so decided.
F. APPOINTMENT OF SPECIAL REPRESENTATIVES TO IAWG
44. The Chairman said that paragraph 9 of the IF Pilot Scheme document, as contained in
WT/LDC/SWG/IF/13, stipulat ed that the IAWG/IFTF would comprise the 6 core agencies, the
DAC/OECD Secretariat, and special representatives (of donors and LDCs) in the pilot phase.  The
IAWG was the coordinating mechanism amongst the IF six core agencies.  Under the "old" IF, there
had been lags between decisions taken by the IAWG, and the communication of those decisions to
donors, LDCs and others.  It had been suggested that if special representatives could "take part" in
IAWG meetings, in a purely advisory capacity, transparency in agency, donor and LDC interaction
would be achieved, ownership would also be improved, and confidence would be strengthened.Recognizing the necessity to strengthen support for its work, the IAWG had already invited the
DAC/OECD Secretariat to participate in its meetings.  Special Representatives' participation at IAWG
meetings would further improve coherence and transparency and strengthen confidence amongst
agencies, donors and LDCs.  In this regard, consultations had produced nominations for these special
representatives to the IAWG.
45. The representative of Tanzania said that as a result of consultations among LDCs, Nepal and
Tanzania had been identified to represent LDCs to the IAWG.
46. The Chairman of the IAWG said that after his consultations among donors, the United
Kingdom and the United States had been nominated to the IAWG.WT/IFSC/M/1
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47. The Chairman invited the Steering Committee to agree to the nominations of Nepal,
Tanzania, the United Kingdom and the United States as Special Representatives to the IAWG, who
would act in an advisory capacity in order to improve coordination.
48.  It was so agreed .
G. STATEMENT BY THE UNDP AND THE WORLD BANK ON PROPOSALS FOR POSSIBLE
CONTRIBUTIONS TO THE IF T RUST FUND
49. The Chairman said that the UNDP and the World Bank had an extensive network of
operational country presence, and that they had made significant contributions to re-design the IF to
ensure that it delivered to the LDCs.
50. The representative of UNDP said that her organisation attached great importance to the IF as
part of its commitment to development and poverty reduction agenda.  Despite its financial problems,
the UNDP had decided to make a contribution of US$100,000 per year to the IF Trust Fund for thenext three years from its Global Program.  The UNDP also would create ad ditional technical posts in
its headquarters and sub-regional office to support activities related to trade and development.
Furthermore, given its decentralised structure, where significant resources for programs were held by
countries, it was expected that as the IF Pilot Phase matured, additional resources would be allocated
for capacity-building projects directly from the country program.
51. The representative of the World Bank said that his organisation had increased its attention and
efforts to trade integration, and that trade had become one of the five priorities for the World Bank in
its strategic work plan.  The strategic work plan influenced the direction provided by the senior
management to the Banks' country departments, where budget decisions were made.  Moreover, a
proposal had been put forward, as part of the Bank's internal budgetary allocation process, to doublethe amount of work in the area of trade, which w ould be equivalent to additional US$ 3 million in
terms of staff and staff time.  While there was no guarantee for such allocation, the request itself was
the indication that the Bank was devoting its efforts to trade.
52. With respect to the IF Trust Fund, a request for possible contribution had been made to the
Development Grant Facility, which was the mechanism to allocate the Bank's resources to theactivities which were managed outside of the organisation.  The IF fit the criteria of the Facility.  The
request of US$1.5 million had been made to the Facility, and had been supported by the senior
management and by the internal networks dealing with economic policies.  The Development Grant
Facility, however, was an independent body of the Bank, and allocated resources on the basis of
competitive process.  While the efforts could be successful, it was important to recognise that trade
was competing with many other development priorities.
53. The Chairman, on behalf of the Steering Committee, expressed appreciation to the two
institutions for their encouraging and positive statements.  He proposed that the Steering Committee
takes note of the statements, and reverts to the item at its next meeting for updates, if any.
54. It was so decided.
H. INDICATIONS BY DONORS ON SPECIFIC PLEDGES TO THE IF T RUST FUND
55. The Chairman said that the European Commission and Sweden had already made
announcements on their pledges to the IF Trust Fund under item E.  He invited other donors to
announce their pledges.
56. The representative of Switzerland said that Switzerland attached great importance to trade in
its development assistance to LDCs, and would therefore like to support the IF.  However, due toWT/IFSC/M/1
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administrative and bureaucratic procedures, Switzerland was not in the position to announce its
specific pledge to the IF Trust Fund at this meeting, but would do so in the near future.
57. The representative of Norway announced that  his country would support the IF with a
contribution of US$500,000 to the IF Trust Fund.
58. The representative of Canada said that hi s country's contribution would officially be
announced by his minister at the LDC-III Conference in May.  He added that the fund should be used
for country projects, but not for administration
59. The representative of United Kingdom said that one of the key strengths of the IF was its
tripartite setting whereby the six international agencies, with the participation by donors and partner
countries, would coordinate policies to achieve better integration of developing countries into the
global economic environment.  All parties needed to work collaboratively to make the Pilot Scheme
succeed.  Success would allow possible enlargement of the initiative.  Recalling the statement by therepresentative of Canada, she reiterated the importance of trust among all parties for the effective
implementation of the IF.
60. The UK fully supported the IF, and recognised the importance of mainstreaming trade into
county's overall development strategy and of ensuring coherence  coordination between trade policy
and trade-related technical assistance at the country level.  To support the IF Pilot Scheme, the UKwould make a contribution of US$ 500,000 to the IF Trust Fund.  The official announcement would
be made by it’s the UK Secretary of State at the Development Minister's meeting to be held in London
on 19 March 2001.
61. The representative of the Netherlands announced that his country would contribute US$
300,000 to the IF Trust Fund.  Moreover, he welcomed the announcements made by the UNDP and
the World Bank for their contribution and possible contributions respectively.
62. The representative of Denmark said that his country was in the process of finalising the
administrative procedures, which would be completed within a few weeks.  Denmark intended to
make a contribution of US$ 300,000 to the IF Trust Fund, provided that the UNDP would also make a
contribution to the IF Trust Fund.
63. The representative of the European Communities repeated the previous announcement that
the Community would contribute 200,000 Euro for the IF Trust Fund.  He was encouraged by the
announcements made, and reminded other donors that there was still much time left before LDC -III to
consider their pledges.
64. The representative of Ireland said that his government was actively considering its
contribution to the IF Trust Fund, though he could not specify the amount at this meeting.
65. The Chairman, on behalf of the Steering Committee, expressed appreciation for the
announcements made.  The contributions were great encouragement for the agencies and LDCs.
Recalling the suggestion made by Canada, he proposed to issue a press release on the pledges made to
the IF Trust Fund, at this meeting, in order to increase public awareness.
66. It was so agreed.
67. The representative of Haiti congratulated the donor partners for their efforts and contributions
to the IF.  Their announcements signified their commitments to revitalise the IF.  He was further
encouraged by the announcements made by the two IF agencies.  While the World Bank was still
awaiting for an approval for its possible contribu tion to the IF Trust Fund, he welcomed the request
that had been sought by the Bank staff.  He also congratulated the UNDP for its contribution at a timeWT/IFSC/M/1
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of financial difficulties.  Lastly, he reiterated that the funds needed to be directed to the problems of
LDCs, not to the administration.
68. The representative of Tanzania, on behalf of all LDCs, expressed deep gratitude to the
contributing countries, Canada, Denmark, the EC, the Netherlands, Norway, Sweden and the UK, for
their pledges.  He also expressed appreciation to UNDP for its contribution and the World Bank for itsintention which he hoped would be realised.  He was also thankful  to those countries which would
make contributions, but could not specify their pledges at this meeting.  Finally, he reiterated that the
funds should be used directly for the benefit of the countries, rather than for administration.
69. The representative of Bangladesh thanked the donors and the two agencies which had
announced their contributions to the IF Trust Fund.  He sought clarification from the World Bank on
how its pledge, when made, would be translated in to action, in terms of staff and staff time.  He
repeated that the funds should not be spent on administrative aspects, but on concrete benefits forLDCs.
70. The representative of the United States said that her county would channel its resources into
the IF Pilot Scheme on a bilateral basis.  The U.S.  would like to know which LDCs would be the pilot
countries as it was preparing the use of its resources which would target specific activities for the IF
Pilot Scheme.  The details of these activities would be specified by the time of LDC-III in May 2001.
Specific figures, activities,  and countries would be provided at a later meeting.
71. The representative of the World Bank, in response to the clarification sought by Bangladesh,
said that the request for resources that had been ma de to the senior management was in terms of staff
time.  Since the IF was an unfunded mandate for the institution, there had been no resources dedicated
for delivering activities under the IF.  Moreover, assistance to developing countries in mainstreamingtrade into development strategies had become one of the strategic priorities at the Bank, which now
provided the basis in seeking for such resources.  Resources obtained would be available for technical
assistance, but also and more importantly, for actual lending and projects in trade-related areas.  From
the Bank’s perspective, this was the precondition for launching IF work as it would help direct
available resources at the country level for trade-related work.
72. The Chairman of the IAWG recalled the IF seminar which the six agencies had jointly
organised on mainstreaming on 29-30 January 2001, and said that the Government of Canada had
contributed 25,000 Canadian dollars to support the cost of participation of some LDCs at the seminar.
I. STATEMENT BY UNDP ON THE INTEGRATED FRAMEWORK TRUST FUND
73. The Chairman recalled that the Heads of th e IF agencies at the July 2000 meeting had
decided that UNDP would administer the IF Trus t Fund (IFTF), on behalf of the six agencies,
on the basis of terms to be agreed amongst the agencies and donors.
74. The representative of UNDP, as the manager of the IFTF and on behalf of the six agencies,
expressed appreciation to the donors who had indicated their generous contributions which amounted
to approximately US$ 4.5 million.  The IFTF had an account with the Chase Manhattan Bank, with its
account number 01522284.  UNDP would provide further details later.
75. She said that the draft terms of reference of the IFTF had been drawn up by the IAWG and
had been circulated to the IF Steering Committee.  The terms of reference were drafted in standard
financial language.  In addition to  each contribution to the IFTF, UNDP as the manager of the trust
fund, would exchange a financial agreement with each donor separately for each contribution, as perits standard financial agreement format.WT/IFSC/M/1
Page 10
76. The contributions to the IFTF would initially s upport mainstreaming activities, i.e. integration
of trade into development strategies such as PRSPs, diagnostic studies, and prioritisation of trade-
related activities in the trade chapters of the PRSPs.  UNDP would be keen to move beyond the
mainstreaming stage into the next stage of capacity building activities.
77. There would be two windows in the IFTF.  Window I was an un-earmarked window, and
Window II could be earmarked if donors wished to make earmarked contributions to specific
countries.  The IFTF was open to all donors, in cluding bilateral donors, agencies, NGOs, and any
other organisations.  Standard UNDP financial rules would apply to all financial contributions.  When
matters related to the Trust Fund were discussed by the IAWG, UNDP as the manager of the IFTF
would be the chair of the session.  Financial reporting for the IFTF would be done if requested by
specific donors and reflected in separate financial agreements with them.  There would be a fee of 3%
for the management of the IFTF, which was charged separately from the executing agency’s 13%separate fee.
78. The representative of the United Kingdom said that her country was pleased with the
contributions that the World Bank and UNDP had proposed to the IF Trust Fund.  Regarding the
management fee for the IFTF, while she noted that UNDP had standard articles for trust fund
management, she would like to have clarification whether the total charge for the IFTF would be 13%plus 3%.  She also made a proposal whether it would be possible for UNDP to make a contribution
which would be equivalent to the charge.  This issue could be considered since the IF was at the stage
of a pilot scheme.
79. The representative of Haiti echoed the suggestion by the UK, and said that the full amount of
money in the trust fund would be directed to projects in LDCs.  Moreover, he suggested that if UNDP
could not make the contribution equivalent of the 13% or 16% fee, it could contribute in kind, i.e.
offering management service gratis, which would be considered as its contribution to the IF Trust
Fund.
80. The representative of Norway fully endorsed the comment by the UK.  He  supported the
position that all matters related to the Pilot Scheme, including the issue of the management fee for the
IFTF, should be reviewed after the pilot phase.
81. The representative of UNDP clarified her previous statement.  She said that 3% was for the
management fee of the IFTF which UNDP would charge, and 13% was for mainstreaming activities
to be executed by any one of the six agencies under the pilot phase.  Most of the activities would be
executed by the World Bank, as well as by the other agencies, who would usually charge the UN
standard 13% fee.  However, it would be up to each executing agency to wave or reduce the fee.  In
the case of UNDP, it had every intention of waiving considerable part of the executing fee.  However,regarding the management fee of the IFTF, UNDP would charge 3% as the manager of the Trust
Fund.  In response to the suggestion by Haiti, she said that UNDP had already decided to make
contribution of US$ 300,000 to the IF Trust Fund.
82. The representative of Bangladesh, on behalf of LDCs, appealed to the agencies to waive the
13% executing fee since the IF was in its pilot phase.  He said that all available funds should be used
for the benefits of LDCs.
83. The representative of the Netherlands said that the explanation by UNDP was still not yet
clear, but he supported the suggestion by Banglades h.  He also sought clarification concerning the
status of the document, whether the terms of reference for the IF Trust Fund were still a draft, and
whether the Steering Committee needed to take action on the document.  Moreover, he inquiredwhether the document concerned only UNDP or all the six agencies.WT/IFSC/M/1
Page 11
84. The Chairman of the IAWG said that UNDP had presented the document on behalf of the six
agencies.
85. The Chairman, stated that the Steering Committee should take note of the document on the
terms of reference of the IF Trust Fund.
86. The representative of the World Bank said that his institution charged a maximum of 10% for
overheads, which was also negotiable, depending on the purpose of trust funds.  He added that while a
request for reduction of the overhead fee could be made, it was important to note that there were
overheat costs associated with the management of trust funds.
87. The representative of UNCTAD said that that his organisation did not have any authority for
reducing the prescribed 13% administrative overhead fee.
88. The representative of the Netherlands said that while the WTO General Council had taken the
decision on the 13% overhead fees, there was the Program Support Fund to channel resources for
technical assistance as a way for maximising the utilisation of funds.  The Program Support Fund
could be considered as a solution to the 13% overhead fees.
89. The representative of the European Communitie s said that while acknowledging that there
were costs for administering programs and projects, the Integrated Framework was in the pilot phase
which had long-term implications.  Moreover, after having made much efforts to make fund availablefor the Pilot Scheme, it would be difficult for fina ncial administrators in the Communities to accept
that the IF Trust Fund would charge 16%, which was 3% more than the usual 13%, and which was an
additional management fee for the fund.
90. The representative of Canada, echoing the previous comments, said that it was important for
the IF to demonstrate maximum results with its still limited resources.  It was important to make clear
how much was needed for administration of th e fund and how much for delivery of concrete
activities.
91. The representative of Haiti said that he supported the comments by the Netherlands, the EC
and Canada.  The 13% overheads costs of the US$ 4.5 million of contributions to date amounted to
US$580,000.  Together with the additional 3% management fee, the total of US$720,000 would bededucted from the IF Trust Fund in order to support administrative costs.  He asked whether the
agencies could waive such fees at least during the pilot phase when utmost efforts should be directed
to  the take off of the IF Pilot Scheme.  Moreover, such gesture would send a positive signal to the rest
of the world.
92. The representative of the World Bank, in response to the comment from the EC, said that
since the World Bank only charged 10% for the overheads cost, therefore, the overall 13% could be
met.  Secondly, the 13% fee was not only used for the administration of the IF Trust Fund, but also forthe implementation of projects in the field, in this  case, for undertaking activities to mainstream trade
in LDCs.  However, the 3% charged by UNDO would be used for the administration of the fund.
93. The Chairman said that Members would like to see the bulk of the resources spent on actual
projects and not on  the administration of the IF Trust Fund.  There was the need to explore options,
including the possibility of waiving or reducing the 13% fee.
94. The representative of UNDP said that the agencies would like to informally consult among
themselves in order to explore some options for consideration by Members.
95. The Chairman suspended the meeting to allow informal consultations among the six agencies.WT/IFSC/M/1
Page 12
[Informal consultations]
96. The representative of UNDP stated that all agencies shared the feeling of Members that the
bulk of  resources in the IF Trust Fund should be expended on activities in countries.  However, the
agencies would like to emphasise that they already bore considerable expense from their regular
budget for the purpose of the IF, including for country missions, coordination and transactions.  It wasimportant to  recognise that the core agencies had already allocated significant  resources from their
budgets in support of IF.
97. With regard to the possibility of waiving  or reducing the overhead cost for the IF Trust Fund,
positions of the core agencies were as follows: i) two agencies had  indicated flexibility  in waiving all
or part of their percentage charges; ii) one agency would not charge for any work undertaken under
the IF Pilot Scheme; iii) another agency was prepared to make a request to waive or reduce the
percentage; and, iv) two other  agencies had very little flexibility, if at all, in their financial proceduresfor reducing or waiving the percentage charges.  The agencies, as a group, would therefore like to
propose to the Steering Committee that on average, no more than 13% would be charged, covering
both the 3% management fee by UNDP and the overhead fee for the executing agency.  She added
that the agencies had now reduced the original proposal of 16% for the total costs  to 13%.
98. The representative of the Netherlands requested the agencies to discuss the matter with their
respective boards.
99. The representative of Haiti appealed to the ag encies to show flexibility concerning the fees
for the Trust Fund in the pilot phase.  He said that  the matter could be revisited at the next meeting of
Steering Committee.
100. The representative of Tanzania asked if the agencies could reduce the fees to less than 13%
on average.
101. The Chairman said that while donor and LDC Members of the Steering Committee had
expressed their wish to see the reduction in the fees for the IF Trust Fund to 13% or lower, it was
important to bear in mind that the agencies could not break the rules set by their memberships.  He
proposed that the Steering Committee take up the matter at its next meeting.
102. It was so agreed.
J. PRESENTATION BY THE WORLD BANK ON THE DRAFT PILOT PHASE WORK PROGRAMME
103. The Chairman said that the World Bank, given its research and analytical capacity and
experience in the area of trade, as well as its extensive network in countries, had  been designated as
the lead agency to undertake mainstreaming work in LDCs for the IF.  Other core agencies, based on
their comparative advantage, would support the Bank's lead role in mainstreaming.  The chairman
invited the representative of the World Bank, on behalf of the IF core agencies, to make a presentationon the draft Pilot Phase Work Programme.
104. The representative of the World Bank, speaking on behalf of the IF core agencies, said that
the Pilot Phase Work Program proposed a programme for activities to be undertaken during the pilot
phase.  The overall objective of the pilot program was to develop trade integration strategies for
individual LDCs as part of their national devel opment strategies.  The primary vehicle or achieving
this goal would be the PRPS process.  The program would essentially assist countries that were
committed to integrating  trade into their PRSPs, to identify ways in which they could expand their
exports, production and employment in labour-intensi ve sectors in the context of the strategy aiming
to reduce poverty.WT/IFSC/M/1
Page 13
105. The Work Programme would initially start in three pilot countries.  Once the three pilots were
completed by November 2001, the extension of the program to other LDCs could be considered by
the Steering Committee.  The Work Programme also  provided ways to address the needs that had
been identified at the IF Round Tables held under  the "old" IF.  A colleague from the ITC would
provide further details in this regard under agenda item K.
106. The key criteria for country selection for the pilot scheme was  full commitment and
ownership by the government towards the objective of putting trade into their development strategies.
This had to be understood in the context that for many LDCs, trade might not be the priority among
other development priorities, and it was up to the country to define  its priorities. The Pilot Scheme
would therefore work with countries which had identified trade as their key priority.
107. The PRSP process would be the primary vehicle for the pilot countries.  It would be a
country-driven process whereby the Bank team would assist the country, through the participatoryprocess, in defining the trade integration strategy for the country.  The in corporation of the trade
integration strategy into a PRSP would depend on the availability of already existing trade-related
programs, for instance, export development programmes, and on the progress that has been made in
the PRSP process.
108. There were two broad dimensions to the five activities as specified in the Work Program.
First, there would be the assessment of the broad policy framework, including the assessment of the
incentive regime that pertained to investors and investors in particular activities of export growth
potential.  Second, specific attention would be paid to individual sectors where a Bank team would
identify the priorities for alleviating key constraints and bottlenecks that impeded investment,
production and export in the sectors.  In developing such trade integration strategy, efforts would bemade to place the country within a framework of  economic performance, using general indicators
such as GDP per capita, growth, and export growth.  Attention would also be focused on  particular
activities, from the trade point of view, that would help in poverty alleviation in the country.  This
focus on poverty alleviation was the key element of the PRSP process.   A major challenge for the
trade integration strategy was to identify how trade and trade-related policies and activities couldassist in achieving the objective of poverty alleviation.
109. Activities to be carried out under the Work Program would essentially involve missions to
each of the pilot countries, led by the World Bank, working together with the other core agencies and,
most importantly, with national stakeholders.  The ro le of a counterpart team in the country would be
an important element for mainstreaming trade in it’s the country's development strategy under the
auspices of PRSP process.  As part of the participatory nature of the PRSP process, a series of
consultations would be held with the private sector, such as the Chamber of Commerce, as well aswith the civil society.  The objective of this approach was to establish an advocacy voice in the
country which would assist in moving the trade agenda forward to the  core of the country's
development strategy.  Without such a constituency  for supporting trade, it would be difficult to
mainstream trade in the country's' development plan or strategies for poverty reduction.
110. The visit to the country would involve at leas t two mission.  Such missions would involve the
assessment of policy environments, the investment climate, and the identification of key bottlenecks
in areas such as customs clearance and transportation.  The assessment of macroeconomic
environments, including the use of fiscal incentives  for export production, would be assessed by the
IMF which had the expertise in this area.  The results of these missions would then be incorporated
into a trade integration strategy, which would contain several elements.  First, the Bank team, inconsultations with local counterparts, would identify priority areas for policy reforms, which would
then be supplemented by a number of sector-specific action plans focusing on alleviating key
constraints and bottlenecks in these sectors.  The team would also be expected to design project
proposals which could offset these constraints.  The proposals would then be presented at
Consultative Group (CG) meetings for possible financing by the donor community.  Project proposalsWT/IFSC/M/1
Page 14
involving large scale infrastructure investments co uld also be put forward for financing through
credits from the Bank, or through the PRGF grant facility of the IMF, at the end of PRSP process.
111. The budget for each trade integration strategy would largely depend on the availability of
existing work on trade in the country, but it was expected to be in the order of US$300,000 per
country under the Work Program.  Projects that would be identified by the trade integration strategycould be submitted to CG meetings for financing.  The goal was to ensure that these proposals would
not be only driven by the trade ministry, but would be embedded in the country's national
development strategy, and therefore be identified as one of the priorities by the government for
financing.  Once it was achieved, there would be additional resources for achieving the goals of trade
integration and of pro-poor economic growth.
112. The representative of the World Bank continued that a list of countries which could be
considered for pilots included: Cambodia, Djibouti, Eritrea, Guinea, Lesotho, Malawi, Mali,
Mauritania, Madagascar, Mozambique, Nepal, Sao Tome and Principe, Yemen and Zambia.  Given
the limited amount of resources available, only a subset of these countries would be included in the
pilot phase.  The Work Program would first start w ith three pilot countries for the trade integration
strategies, and the five countries that had held the Round Tables under the old IF.  The five countries
included Bangladesh, the Gambia, Haiti, Tanzania and Uganda.  The objective for the five countrieswas to follow up on the projects that had been identified as priority trade-related technical assistance
needs at the IF Round Tables.  The budget in the order of US$300,000, equivalent to the cost of a
trade integration strategy, would be made available for each of the five countries.
113. Finally, speaking from the view of the World Bank, the representative said that once the
internal budgetary process ended in June, he would be in the position to know which countries couldbe added to the three initial pilots for the trade integration strategy.
114. The Chairman, on behalf of the Steering Committee, thanked the World Bank for its
presentation.  He said that once good results were obtained from  the initial three pilot countries, there
could be more resources available for other LDCs.
115. The representative of Lesotho said that his country had completed its Interim-PRSP in
December 2000, and was preparing various elements for a full PRSP through the participatory process
which was designed on issue-based forums.  Lesotho’s Interim-PRSP had little emphasis on trade, and
the Government intended to strengthen the tr ade dimension of PRPS in its full PRSP.  The
Government had followed the guidelines that had been set by the World Bank and the IMF for the
preparation of its PRSP.  However, the guidelines had not so far set out steps for advising  the
Government on how to design and ensure the trade di mension in PRSPs.  The representative therefore
asked the World Bank whether the guidelines for PRSPs had been revised to reflect the emphasis onmainstreaming trade into overall national development strategies.
116. The representative of the Development Assistance Committee at the Organisation for
Economic Co-operation and Development (DAC/OECD) thanked the Steering Committee for inviting
her organisation as an Observer to this meeting.  The DAC/OECD was closely following the progress
of the IF which had so far been encouraging, and hoped that her Organisation could constructivelycontribute to discussions in the area of trade-related capacity building.  Regarding the Work Program,
she asked what role the other core agencies would play in the preparation of trade integration
strategies, and to what extent local experts would be involved in the process.  In her view, the
involvement of local counterparts and experts in the process was necessary.  .  Moreover, she inquired
whether the timing of the CG and UNDP Round Tables meetings had been taken into considerationfor the pilot countries, as it was an important factor for managing the expectation of LDCs.
117. The representative of Canada expressed her country’s wish to come back to the discussion on
the Work Program at a later date.  As a  preliminary comment, she said that it would be useful to linkWT/IFSC/M/1
Page 15
the Work Program with other multilateral and bilate ral efforts, such as the JITAP which encompassed,
inter alia , four LDCs, and which focused on mainstreaming trade.
118. The representative of Tanzania sought clarification on two versions of the Work Programme
regarding the treatment of Tanzania.  In the earlier version, Tanzania was mentioned as part of the
possible set of countries for the trade integration strategies, out of which three would be selected.  Inthe later version, Tanzania was mentioned only as part of the five Round Table countries whose
prioritised trade-related projects would be considered at the next Steering Committee meeting.  He felt
that it was such a dramatic change for the status of his country.
119. The representative of the World Bank said that, in response to the question raised by Lesotho,
the current version of the PRSP Sourcebook, which provided guidance for the preparation of PRSPs,
had a light trade section.  The Bank had been prep aring a methodological handbook or chapter for the
Sourcebook.  The draft had been circulated for comments to trade experts, inside and outside of theinstitution.  The Sourcebook would be in circulati on in the coming weeks.  Another important factor
in ensuring the mainstreaming of trade into PRSPs was the strong support from relevant country
departments in the Bank, which were instrumental in the PRSP process.  The representative suggested
that Lesotho communicate its commitment to mainstream trade to the country department responsible
for his country.
120. In response to the question from the DAC/OECD,  the representative of the World Bank said
that the process outlined in the Work Program was one of partnership.  For instance, missions to the
pilot countries would be led by the Bank, but also might be joined by other core agencies if they had
competence and interest in particular areas, such as customs and transportation.  Local consultants,
from both the Government and the private sector, woul d also be intensively involved in the process,
as they had information regarding the country. Howe ver, the level of their involvement would depend
on the availability of information and studies on the country.  With respect to the timing of CG and
Round Table meetings, he noted that ideally, a trade integration strategy would be completed and
embedded into a PRSP before the next planned meetings.  However, the reality could be different, due
to the complexity of planning these meetings.  Nonetheless, efforts would be made to ensure that theoutcomes of the trade integration strategy would feed into CG meetings.
121. In response to the question from Canada, the representative said that the objective of the IF
was to co-ordinate multilateral and bilateral efforts in  the area of trade-related technical assistance and
capacity building, including JITAP.  By utilising the IF network, the agencies would be able to avoid
duplication of activities, but  would be able to generate linkages of activities and synergies out of the
IF process.
122. In response to the question from Tanzania, the representative said that the specific needs of
the five countries had already been identified at the IF Round Tables.  Some of these needs could be
addressed without going through the pilot scheme.  The agencies would be consulting with the five
countries to identify and prioritise the projects which had emerged at their IF Round Table processes.
123. The representative of Haiti sought clarification on the selection of pilot countries.  He thought
that the task of the selection was vested  in the Steering Committee, with which he fully agreed.
However, the new version of the document appeared to be unspecific about who was in charge of that
task.
124. The representative of Ethiopia asked who would make the assessment of the 14 countries
listed for possible pilot countries whether they fulfilled the criteria to be considered as  pilots.
125. The representative of the European Communities sa id that at  first sight, the Work Program
generally looked fine, though it still needed to be looked at more carefully.  In particular, he was
pleased with inter-agency co-ordination in the PRSP process that other core agencies wouldWT/IFSC/M/1
Page 16
participate in World Bank-led missions.  He reiterated that not only the World Bank and the IMF, but
also the other agencies, would have a full role in the exercise.
126. Regarding the selection of pilot countries, he emphasised that the Steering Committee should
not micro-manage all details of the Work Program.  The Work Program had made significant
progress, by addressing the issue arising from the old IF for the five countries which had held the IFRound Tables.  This had at least removed the concern of preferential and non-preferential treatment in
the pilot program.  It was premature to select pilot countries at this meeting.  Therefore, it would be
appropriate for the IAWG, where Members of the Steering Committee were represented on a smaller
scale, to consider the selection of pilot countries, since expertise for the task was with the agencies.
The IAWG would then report to the Steering Co mmittee which was the body providing overall policy
oversight and guidance for the IF.  The Steering Committee was not well-equipped for the selection
task.  Rather, the Steering Committee should make sure that there was a basic framework for theimplementation of the pilot scheme, and should urge the agencies to implement it.  It was important
for the Steering Committee to trust the agencies for the day-to-day management of the Work Program.
127. The representative of Uganda stressed that it was important for the Bank and the IMF to
factor trade into their programs at the country level.  The guidelines for drawing up PRSPs and
UNDAF had little emphasis on trade, and as a result, Uganda's PRPS had little on trade.  His TradeMinister had indicated that Bank and IMF country representatives had not talked about trade in their
discussions with the Ugandan Government.  As Uganda was part of the five countries which had held
the IF Round Tables, he wondered how the follow-up activities for the IF Round Table countries (i.e.
prioritised and sequenced trade-related capacity building projects) would be mainstreamed into the
on-going PRSP process in Uganda.
128. The representative of the United States said in her preliminary comments that the Work
Program looked fine at the first sight, but that th e United States would like to come back with more
detailed comments at a later date.  She reiterated that the process in the Work Program needed to be
based on demand-driven efforts by LDCs.
129. The representative of the World Bank said that in response to the question raised by Uganda,
it was up to the Government of Uganda to decide on priorities for the country’s development strategy,
in terms of the utilisation of available resources.  Moreover, a PRSP had to be seen as a dynamic
process where adjustments were made as the country’s needs changed over time.  The agencies,
therefore, would stand ready to assist the Ugandan Government in mainstreaming trade into its PRSP.
130. The representative of UNDP, commenting on the issue raised by the DAC/OECD regarding
the timing of CG and Round Table meetings, sa id that once the mainstreaming process was
completed, it should be fed into the next CG or Round Table meeting, where the trade-related
capacity building needs that had been  identified in  the trade integration strategy would be addressed.
It was important for the agencies to ensure that th ere would be no time-lag in the pilot process, and
that the agencies would respond  to needs immediately, as soon as  they were identified.
131. The representative of Haiti re-stated the question that he had posed earlier in his intervention
regarding the selection of pilot countries.  He said that if it was not for the Steering Committee to
decide on this matter, it should be stated clear ly that the IAWG would be take up the task.
132. The Chairman said that, on the one hand, Members of the Steering Committee would like to
see the actual implementation of the Work Program as transparent as possible but, on the other hand,
it was not practical and effective for them to get invo lved in every small detail of the process.  These
concerns needed to be balanced.  As laid out in the IF Pilot Scheme document, the SteeringCommittee had the responsibility for (i) setting policy guidelines, policy co-ordination and oversight;
and, (ii) assessment of progress of the IF.  The task of the Steering Committee at this meeting,
therefore, was to evaluate the Work Program, including the methodology for selecting the pilots,WT/IFSC/M/1
Page 17
which was put forward by the World Bank, in the name of the IAWG.  Thereafter, the Steering
Committee would ask the IAWG to identify three pilots out the 14 countries listed in the Work
Program, and to report to the Steering Committee at the next meeting.  He believed that this would be
a reasonable  and balanced division of labour between the Steering Committee and the IAWG.
133. The representative of Tanzania fully agreed w ith the Chairman's view that the IAWG should
take up the task of identification of three pilot countries, and asked the Chairman to clearly reflect this
in the text of the Work Program.  He believed that the IAWG, where both donors and LDCs were
represented in a smaller format than the Steering  Committee, would follow the guidelines which had
been set by the Steering Committee.
134. The representative of Bangladesh  advised  caution regarding the inter-agency missions which
were envisaged in the Work Program, citing his previous experience in preparations for Bangladesh's
If Round Table.  The visit by a large, high-level inter-agency delegation to Dhaka had not resulted inany concrete actions under the old IF.  He was also cautious that, despite the importance of
empowering advocacy groups, especially among the private sector, for mainstreaming trade in the
country, it was important to target the right groups and  experts for that purpose.
135. The representative of Canada stated, on behalf of all donors, that she was in full support of the
suggestion made by Tanzania.  Donors and LDCs would rely on their Special Representatives to the
IAWG to ensure that decisions would be taken in accordance with their will.
136. The Chairman suggested that the next revision of the Work Program should incorporate the
position that the IAWG would identify and agree to the "three pilot countries.  He summarized
positions expressed by Members that the Steering Committee agreed with the Work Program with
amendments suggested by members.  He then asked the IAWG to proceed with the selection of pilot
countries, as laid out in the Work Program.  Moreover, he proposed that since the Steering Committee
had held preliminary discussions on the Work Program, the Committee should hold another exchange
of views on the Work Programme, at the next meeting,  in order to continue to build on current
progress being made and to assist the implementation of the pilot phase.
137. It was so agreed.
138. The Chairman congratulated the World Bank and the other agencies for putting together the
Work Program, and urged a speedy continuation.
139. The representative of the World Bank repeated that his presentation and subsequent
interventions had been made on behalf of the IF six agencies, not only of the Bank.
140. The representative of the United States asked whether the Steering Committee was adopting
the Work Program at this meeting.
141. The Chairman responded that the Steering Committee had not adopted the Work Program.
However, it was authorising the IAWG to proceed wi th the Work Program, in accordance with the
guidelines that had been set by the Steering Committee and the understanding that had been reached.
This approach would enable the Steering Committee and the agencies to gain time in view of the
collective wish to demonstrate early tangible results on the Pilot Scheme.  However, this was the first
reading of the Work Program, and the Steering Committee would take it up again at its next meeting.
142. The representative of Haiti sought clarification as to whether donors and LDCs were part of
the IAWG.WT/IFSC/M/1
Page 18
143. The Chairman responded that having appointed four Special Representatives from donors and
LDCs to the IAWG earlier at the meeting, it was clear that the IAWG had a new composition – the six
agencies, 2 Special Representatives each from donors and LDCs.
144. The representative of the European Comm unities reiterated the importance of speedy
implementation of the Work Program, and asked when the IAWG would meet and take necessary
decisions on the three pilot countries.  In his view, the question of the adoption of the Work Program
was not necessarily an important issue.  However, it was important, by the time of the Third United
Nations Conference on LDCs in May 2001, that work on mainstreaming trade would have already
started, at least, in the three pilot countries.
145. The Chairman said that the next IAWG meeting would be held at the margins of the Third
Preparatory Committee meeting for  LDC-III in New York, within the next two weeks.  He urged the
IAWG to keep this timetable, so that results in the three pilot countries would be obtained byNovember 2001.
K. P
RESENTATION BY ITC ON STATUS REPORT ON THE FIVE ROUND TABLE COUNTRIES
146. The Chairman stated that outstanding work fro m the old IF process needed to be resolved,
including in those five LDCs that had held Round Ta bles prior to the review of the IF.  While the IF
now proceeded with the new focus on mainstreaming, it was important to follow up activities whichhad been initiated by the five countries at their Round Tables.
147. The representative of the ITC said that five trade-related IF Round Tables had been held in
Bangladesh , The Gambia, Haiti, Tanzania and Uganda between December 1998 and January 2000.  It
had been well known that donor response to trade-related technical assistance projects presented at
these Round Tables had not met the expectation of these countries.  The IAWG had asked the ITC tohelp validate and prioritise those trade-related technical assistance proposals for possible renewed
interests of donors and/or funding from the IF Trust Fund, and had asked the ITC to bring the results
of consultations to the IAWG and Steering Committee.
148. Under the old IF approach, trade-related priorities had been determined by the countries
themselves in accordance with their expectation towards the level of available resources.  Thecountries had prepared documentation for the Round Tables, and had also established IF focal points
to facilitate the process.  On average, 20 project proposals had been prepared for each of the Round
Tables.  The sum of those projects tabled had mounted to some US$200 million, of which US$100
million had been related to technical assistance and another US$100 million related to infrastructure.
The important result from these Round Tables had been the manifestation of interests by donors for
certain proposals.  However, with a few exceptions, no official pledge had been made.  There had
been no follow-up mechanism since the Round Tables had been held.
149. The representative of Haiti said that it was important for the IF to move forward on two
tracks, and commended  the ITC for its work in following up the Round Tables.  He asked if the ITC
would be eligible to benefit from financing of fo llow-up activities to the Round Tables out of the IF
Trust Fund?
150. The representative of the Netherlands sought clarification from the ITC regarding the follow-
up to the Round Tables since paragraph 3(d) of the Pilot Phase Work Program stated something
different.  He said that not all project proposals from the Round Tables could be presented to the
Steering Committee for financing, since resources in the IF Trust Fund were limited to finance
projects such as infrastructure.  Instead, the follow-up mechanism should be with the World Bank
Consultative Group or UNDP Round Table meetings wh ere those projects, including infrastructure-
related, could be presented for financing.WT/IFSC/M/1
Page 19
151. The Chairman of the IAWG said that infrastructure would not be financed from the IF Trust
Fund, as currently designed.  While the IF was proceeding on the basis of the Pilot Scheme, some
outstanding issues from the old IF process needed to be resolved.  The IAWG had held consultations
and had agreed that as a mark of good faith, some trade-related technical assistance projects presented
at the IF Round Tables, on a prioritised and sequenced basis and in support of mainstreaming, wouldbe submitted to the Steering Committee for funding.  As stipulated in paragraph 3(d) of the Pilot
Phase Work Program, the IAWG would present a list of prioritised and sequenced trade-related
projects at the next meeting of the Steering Committee.  ITC's reference to the figure of US$200
million had exceeded what had been agreed at the agencies' consultations.  There was a ceiling of
US$300,000, up to which trade-related technical assistance in support of mainstreaming would be
financed.  The ceiling was the same amount that would be extended for a trade integration study.
152. In response to the question from Haiti regarding whether the ITC would benefit from the IF
Trust Fund, he said that the IAWG would make appropriate recommendations as to which agencies
would implement selected projects.
153. The representative of the ITC said that the ITC had been asked to undertake consultations,
using its own resources, to assist in updating trade-related projects which had been formulated in the
old IF process.  With regard to the follow-up mechanism to the Round Tables, he clarified that theLDCs had requested the agencies for follow-up activities to the outcomes of the Round Tables.
154. The representative of Canada suggested that in order to avoid the similar problems that had
occurred in the post-Round Table phase, a mechanism should be established to monitor progress in
targeted countries in the pilot phase.  Such mechanism would allow the Steering Committee to keep
track of progress in pilot countries.
155.  The representative of the United States said that it was important to balance the assistance
provided by contributing donors and by non-contributing donors in the IF Pilot Scheme, including in
the case of the follow-up to the Round Tables in th e five LDCs.  Since the U.S. was in the process of
channelling resources to some selected countries, such as Bangladesh, Haiti, Malawi, Mozambique
and Uganda, as part of its contributions to the IF Pilot Scheme, it was important to recognise the roleof bilateral donors in the process of prioritising and sequencing trade-related technical assistance
projects, as stipulated in paragraph 3(d) of the Pilot Phase Work Program.
156. The representative stressed the importance of the holistic approach in the IF Pilot Scheme,
where all activities were pooled together to assist LDCs.  The success of the scheme would be
important, as it would lay out  a road map for the IF after the pilot phase.
157. The representative of the Netherlands said that the two existing approaches eventually need to
be merged into one, where outcomes of a trade integration strategy and project proposals would  feed
into the CG or Round Table process.  However, it was up to donors and institutions to pick up projects
for financing and implementation.
158. The Chairman said that the request from the U.S. could be accommodated by adding the
wording "from on-going bilateral resources" in paragraph 3(d) of the draft Pilot Phase Work
Programme.  In response to the suggestion by Canada, he reminded the Steering Committee that theframework document for the Pilot Scheme in paragraph 11, Section VI, already  provided that the
Pilot Scheme would be monitored and reviewed, and that the IAWG would make a report on its
progress to the Steering Committee.
159. The representative of Haiti sought clarification to his early query, as to whether the ITC
would benefit from US$ 300,000 that had been allocated to each of the five LDCs from the IF Trust
Fund.WT/IFSC/M/1
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160. The representative of the EC, in response to the query by Haiti, said that resources would be
made for the five LDCs as part of the follow-up to those projects that had been presented at the Round
Table meetings.  This would assist in bringing to closure the old IF process.  At the same time, the IF
would proceed with the new approach where resources would be made available for the trade
mainstreaming work, led by the World Bank, and where projects resulting from such work would besubmitted, for consideration, to  the CG or UNDP Round Table m eetings.  The budget amounted to
US$ 1.5 million for the five LDCs under the old IF process and US$ 0.9 million for the three pilot
LDCs.  If all pledges materialised, additional LDCs would be considered for the Pilot Scheme.
161. The representative of the United States welcomed the Chair's suggested wording for
paragraph 3(d) of the draft Pilot Phase Work Programme, reiterating that projects as  a follow-up to
the IF Round Tables, including from both contributing and non-contributing donors, would be
presented to the Steering Committee.
162. The representative of Canada echoed the comment from the US, concerning the role of
bilateral donors.  She suggested that two additional points needed to be clarified in the draft Pilot
Phase Work Programme: first, US$300,000 was the ceiling for trade-related technical assistance
projects to be financed from the IF Trust Fund for each of the five LDCs which had held the IF Round
Tables; second, that a list of prioritised trade-related technical assistance projects would also bepresented at the CG or Round Tables.
163. The Chairman suggested that the changes be introduced in paragraph 3(d) of the draft Pilot
Phase Work Programme.
164. It was so agreed.
L. OTHER BUSINESS
165. The Chairman proposed that the next of meeting of the Steering Committee should be held on
3 May 2001, before the Third United Nations Conference on Least-Developed Countries (LDC -III),
14-20 May 2000.
166. It was so agreed.
167. In the absence of any other business, the meeting was adjourned.WT/IFSC/M/1
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Annex 1
Provisional Agenda for the First Meeting of the IF Steering Committee
15 March 2001, WTO
1. The Integrated Framework Steering Committee (IFSC) will hold its first meeting on 15 March
2001, beginning at 10.00 a.m. in Room D, WTO.
2. The items proposed for the provisional agenda are as follows:
(a) Opening statement by Mr. Mike Moore, Director-General, WTO
(b) Adoption of the agenda
(c) Election of the Chair and the Vice Chair of the IF Steering Committee
(d) Remarks by the elected Chair
(e) Exchange of views on the Terms of Reference of the IF Steering Committee
(f) Appointment of Special Representatives (2 donors and 2 LDCs) to IAWG
(g) Statement by UNDP and the World Bank on proposals for possible contributions to
the IF Trust Fund
(h) Indications by donors on specific pledges to the IF Trust Fund and other IF resources
(i) Statement by UNDP on the IFTF (Account Number and standard articles of Trust
Fund establishment)
(j) Presentation by World Bank (on behalf of the IAWG) on draft Pilot Phase Work
Programme
(k) Status report by ITC (on behalf of the IAWG) on the 5 LDCs that held Round Tables
(l) Any other business
(i) dates for next meeting
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