RESTRICTEDWORLD TRADE
ORGANIZATIONWT/COMTD/W/76
1 August 2000
(00-3145)
Committee on Trade and Development
Twenty-Ninth SessionOriginal:  English
UNIDO TECHNICAL ASSISTANCE PROGRAMME
IN SUPPORT OF TRADE PROMOTION
Communication by UNIDO
The following paper was received from the United Nations Industrial Development
Organization (UNIDO) with the request that it be circulated to delegations.  It reflects the presentation
made by the UNIDO representative at the 29th Session of the CTD on 28 June 2000.
I. INTRODUCTION
1. Industry and trade have a strong correlation, as without productive and technological
capacity, countries have limited ability to diversify their exports and engage in high value added,
international trade.  So from a supply-side perspective, much of what UNIDO does, impacts on thedeveloping countries ability to trade at the nationa l, regional and international level, and thus their
ability to overcome poverty.
2. By the nature of UNIDO’s work and mandate, UNIDO’s  contribution to trade promotion is
through promoting the industrial competitiveness of developing countries,  improving their productive
capacities and addressing overall supply-side conditions.  By concentrating on the linkage between
agriculture and industry, particularly in Africa, UNIDO responds to the urgent need for diversification
of  their largely commodity-based economies.
3. UNIDO has engaged in a major reform process that was launched in early 1998. Since then,
UNIDO has drastically reoriented its operations, both on the administrative and organizational level,
but most importantly on the programmatic level. Basically, UNIDO has been refocusing its services
into 16 core services in pursuit of sustainable industrial development, which the organization defines
as competitive economy , productive employment , and a sound environment  (the so-called 3 E’s).
These basic dimensions capture the essence of UNIDO’s services, intended to enhance the
competitiveness of enterprises and of the countries in which they operate, to address and prevent
ecological problems in industrialization, and to stimulate the creation of productive jobs.
II. UNIDO SERVICES IN THE FIELD OF TRADE PROMOTION
4. The following technical assistance services render support to developing countries and
economies in transition, from a trade and supply-side perspective:
− formulation of industrial or supply-side policies.  The main objective of this service is to
encourage good industrial governance by providing policy advice and build institutional
capacity for policy analysis and formulation.  In the process of policy formulation and
implementation, UNIDO suggests to set up public-private sector consultation mechanisms soWT/COMTD/W/76
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as to fully involve the private sector and tap into its developmental potential.  Often a
environmental policy element is being introduced, such as in China, where UNIDO is
conceiving strategies for the competitiveness of key sectors, in particular the automotive
sector.
− sub-sectoral support.  Under this service modules, UNIDO seeks to strengthen the link
between agriculture with industry and to upgrade entire productive systems in the
agro-industry sector. In line with UNIDO’s comparative expertise, priority sector include
food processing, textile and leather, wood, agro-machinery and chemicals.  To enable the
production of competitive goods of consistent quality demanded by the specific markets,
UNIDO pursues a holistic approach, involving the full range of sector-specific and
cross-sectoral institutions and policy issues.  Projects also integrate factory-level support,
such as technology assessments and on-the job training on technology transfer issues, productquality, process optimization, maintenance, cost minimization and product safety.
− continuous improvement and quality management at the productive level.  The aim of this
service module, is to restructure and upgrad e industries to enhance their competitiveness,
through the introduction of quality management principles.  At the institutional level, UNIDO
works with local institutions which are being trained in enterprise diagnosis, technical audits,performance improvement and good manufacturing practices.  Through these institutions,
UNIDO works directly with enterprises which are being coached in the implementation of the
financial and operational restructuring plans.
− support to standardization, certification and metrology bodies.  The aim of this service
module is to strengthen country’s standardization infrastructure together with national
capacities at government, institutional and enterprise level.  This involves the technical and
managerial upgrading of national or regional st andardization bodies.  It also involves the
establishment or improvement of certification and accreditation procedures.  National and
regional certification and accreditation bodies are being supported to achieve international
recognition of certification for products, systems, laboratories, tests and technical personnel.Institutions in turn improve the capacity at th e enterprise level for improved product and
process quality, export performance, environmental performance and certification to relevant
international standards.
A good example of this service module has found application in Tanzania and Uganda, whose
exports to the EU were banned due to the contamination of fish from Lake Victoria.  In
parallel with the introduction of safety regulations and inspection standards, UNIDO has been
setting up a laboratory and certification procedure to ensure compliance with EU regulations.
As a result, Tanzania managed to obtain re-access of its fish products to the European market
during 1999, while the ban on Uganda fish exports is about to be lifted.
− cleaner production programmes, pollution control and waste management.  The objective is to
create a sustainable balance between industri al development and environmental management
and conservation.
By advising on appropriate clean and waste management technologies and related production
processes, UNIDO seeks to reduce environmental degradation and pollution caused by
industrial production.  A centrepiece in this endeavour are national cleaner productioncentres (CPCs), which provide advisory servic es on cleaner production technologies to the
local industry.  UNIDO has established CPCs in some 17 countries (including Guatemala,
Morocco, the Russian Federation, Hungary, I ndia, Nicaragua, Mexico, Slovakia, Tunisia,WT/COMTD/W/76
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Tanzania, Vietnam and Tanzania), while an additional three are planned in Ethiopia, Kenya
and Mozambique.
A sector-specific centre, focussing on the oil and gas industry, was established in the Russian
Federation.  In the pesticide sector, a regional cleaner production and information programmecovers some 15 countries in Asia and the Pacific.  This resulted in the banning of the most
persistent and toxic pesticides and facilitated the introduction of new environmentally friendly
and bio-pesticides.
− private sector and enterprise development.  UNIDO places private sector development at the
core of its vision and technical assistance and fully subscribes to the global shift away from
government intervention towards the creation of an environment in which market forces play
a dominant role.
UNIDO projects are based on an integrated support strategy, that may include the promotion
of a more favourable policy and institutional environment for SMEs, the strengthening of
business service centres and business incubators with a view to create, expand and modernize
private enterprises.  They may also involve the formation of SME clusters of enterprises toallow for collective business strategies.  Such an integrated private sector development
programme is under implementation in Guinea, where the types of enterprises targeted vary
from micro and small enterprises (such as artisans in the traditional textile sector) to formal,
medium-sized enterprises (ready to engage in partnerships with foreign investors).
In addition, UNIDO is increasingly establishing linkages with institutions and enterprises in
the private sector of developed and developing countries, many of which become partners in
projects or providers of technical expertise.  In India, for example, UNIDO has forged a
multidisciplinary partnership with FIAT, INSEAD, the Prince Of Wales Business Leaders
Forum, the Automotive Component Manufacturers Association, the Automotive ResearchAssociation of India, and the Government of Indi a.  The aim is to strengthen the supply chain
of Indian SMEs in the automotive component sector, with a view to linking them to global
supply chains of multinational car manufacturers.  Through provision of shop floor
interventions by international experts in areas such as quality, productivity and organization,
Indian SMEs are being upgraded to meet international quality levels and become accredited tomultinational buyers.
− investment and technology promotion.  Invest ment and technological innovation are the
prime movers of economic development and globalization.  To achieve sustainable increases
in investment and technology flows, UNIDO strengthens local investment promotion agencies
in the promotion and negotiation of foreign investment and technology projects, with a view
to forming international industrial partnerships, particularly among SMEs.  To this end,
UNIDO offers a package of tools and method ologies for the formulation and appraisal of
investment projects, their promotion towards foreign investors, the finalization of cooperation
agreements as well as linkages with the financing system.
III. INTEGRATED PROGRAMMING STRATEGY
5. A central element of UNIDO’s reform, was not only the focussing and streamlining of its
technical assistance services, but also a rethinking in the way these services are being delivered.
While in the past, UNIDO would addr ess support requirements through small projects isolated from
each other, the new strategy is to package services into integrated country programmes, withWT/COMTD/W/76
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well-defined linkages among the various components allowing for a more holistic approach and
multi-disciplinary solutions.
6. Since 1998, integrated programmes have beco me the main vehicles for UNIDO’s technical
cooperation activities.  Currently there are 37 ongoing programmes, of which 12 are in Africa, 9 in
Arab Countries, 6 in Asia and the Pacific, 4 in Eastern and Central Europe, and 5 in Latin Americaand the Caribbean. Of the total, 11 are in LDCs (see annex for full list of countries).
7. These integrated programmes are on average based on four to five service modules, have a
duration of three years, and an average budget of USD 6 million.  Cross-cutting themes are agro-
based sectoral support, quality and standardization and  SME and private sector development.
Admittedly, the mobilization of full funding remains a challenge.  Operating on the basis of seed
money allocated from the Industrial Decade from Africa and various donor contributions to UNIDO’s
Industrial Development Fund, UNIDO is strongly advocating government ownership in the funds
mobilization process.
IV. COOPERATION AND COORDINATION WITH THE WTO
8. UNIDO is not a member of the core group of six agencies under the Integrated Framework
for LDCs.  However, UNIDO is an associated partner and participates in the roundtable preparations,if it is so requested by Governments. In the case of Tanzania, Haiti, and Guinea (and Madagascar,
which is currently preparing a roundtable later in  the year), UNIDO’s supply- side oriented technical
assistance programmes were included in the multi-year technical assistance packages presented at the
roundtable meetings.
9. UNIDO has been seeking coordination with the JITAP programme, so as to ensure
compatibility between the trade promotion and supply-side support.  This is particularly important, as
in five of the eight JITAP countries, UNIDO has ongoing integrated programmes under
implementation (Burkina Faso, Côte d’Ivoire, Ghana, Tanzania and Uganda).  Coordination is
pursued at the level of the ITC management unit and through the focal points at the field level.
10. In a current initiative, UNIDO is exploring a cooperation programme with the WTO in the
field of TBT and quality and standardization related support.  An initial idea is to set up a global
monitoring system to record countries constraint s in complying with international standards and to
identify their specific needs to overcome constraints at policy, infra-structural or technical capacity
level.  The aim is to initially involve some twenty African countries and to draw up dedicated
technical assistance programme to address the identified needs.WT/COMTD/W/76
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ANNEX
UNIDO Integrated Programmes under Implementation
(Status:  July 2000)
Africa
Burkina Faso
Côte d’Ivoire
Eritrea
EthiopiaGhana
Guinea
Mali
Mozambique
RwandaSenegal
Uganda
UR TanzaniaAsia
India
Iran (Islamic Rep.)
Lao PDR
NepalPakistan
Sri Lanka
Thailand
Arab
Algeria
EgyptJordan
Morocco
Palestine
Saudi Arabia
Sudan
Tunisia
YemenEurope
Armenia
Russia
Tajikistan
Uzbekistan
Lac
Bolivia
Colombia
Cuba
GuatemalaHonduras
__________