RESTRICTEDWORLD TRADE
ORGANIZATIONWT/COMTD/M/27
25 November 1999
(99-5108)
Committee on Trade and Development
Twenty-Seventh Session
NOTE ON THE MEETING OF 18 OCTOBER 1999
Chairperson:  H.E. Mrs. Absa Claude Diallo (Senegal)
I. ADOPTION OF THE DRAFT AGENDA
1. The Chairperson welcomed Members to the 27th Session of the Committee on Trade and
Development (CTD).  The revised draft agenda for this meeting was to be found in
WTO/AIR/1177/Rev.1.  She indicated that she had two items that she wished to raise under Other
Business.  First, there was a request for observer status from the League of Arab States.  Second, she
indicated that she would make a proposal regarding the dates of future meetings.  She also  asked if
any Member wished to add any other item to the draft agenda, or to raise any other  matter underOther Business.  There being no such requests, she then proposed that the draft agenda be adopted.
2. It was so agreed.
II. PRESENTATION BY THE CHAIRMAN OF THE OECD DEVELOPMENT
ASSISTANCE COMMITTEE (DAC)
3. Continuing the series of information sessions on related work of other international
organisations, the Chairperson invited Mr. Jean-Cla ude Faure, Chairman of the OECD Development
Assistance Committee (DAC), to make a presentation about the work the DAC in the development of
trade capacity.  Two related OECD publications were available in the room.1  The full text of
Mr. Faure's presentation is included as Annex to this document.
4. At the end of his presentation, Mr. Faure stated that he felt that there was a need for dialogue
among all of those concerned with co-operation in the areas of trade and development assistance.  Hehoped that the present exchange of views would be the beginning of such a process.
5. The Chairperson thought that the Committee shared the sentiments expressed by Mr. Faure,
and that the CTD would wish to maintain contact with the DAC.
III. ADOPTION OF THE ANNUAL REPORT OF THE CTD
6. The Chairperson said that the draft of the annual report of the CTD had been circulated as
document WT/COMTD/63.  When the draft was circulated, the Secretariat had requested Members to
communicate to it by 16 October any proposals or amendments.  The only such proposal, from
Mexico, related to paragraphs 6, 8 and 16 of the draft report.  In order to meet the reporting
requirements of the General Council, the final re port had to be forwarded to the General Council
                                                     
1 OECD, Trade, Investment and Development-"Policy Coherence Matters", Paris 1999; OECD, Trade,
Investment and Development- "Reaping the full Benefits of Open Market", Paris 1999.WT/COMTD/M/27
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by 22 October 1999.  Accordingly, the Chairperson proposed to suspend the Committee's formal
meeting and to continue immediately in informal mode to discuss the draft report.  She would then
close the informal meeting, ask the Secretariat to revise the document, and would revert to formal
session to consider the revised draft.
7. The Committee agreed.
8. Returning to the formal session, the Chairperson stated that the Secretariat had revised the
draft annual report of the CTD, and she asked the Secretariat to read the amendments.
9. Regarding paragraph seven of the revised draft text, the representative of Mexico stated that
the reference to High Level Symposia (HLS) on Trade and Development and on Trade and the
Environment in the footnote raised a problem.  He explained that the HLS were outside of the official
work of the CTD, and that Mexico did not wish to see this reference which could lead to difficulties
for the Third Ministerial.  Accordingly, Mexico proposed to delete the phrase "A Secretariat
background document was prepared for the HLS" as well as the words linking the two symposia.  He
stated that if the WTO Secretariat wished to publi sh an informal compilation of material from the
HLS that was one thing, but the CTD should not refer to these matters in its annual report.
10. The representative of the United States stated that the United States would not press the point
of having the reference to the HLS on Trade and Environment, notwithstanding the fact that both
symposia were agreed in the General Council to be held in tandem and that the United States had
technical issues with respect to how its contribution to the symposia would be handled.  Another
method would have to be found on how to handle this concern.
11. It was also agreed to remove footnotes 1 and 3 of page 2 of the revised draft text.
12. On paragraph 11 of the revised draft text, the representative of Guatemala said that the
reference to presentations by the Commonwealth Secretariat and the World Bank at the 26th Session
of the CTD should be in a separate paragraph, because this was separate from the submissions of
documentation submitted by six countries on the issue of small economies.  This was agreed.
13. In paragraph 12, the representative of the United States requested that the qualifying adjective
"extensive" be deleted.  It was so agreed.
14. The Committee adopted the annual report.
IV. FUNDING OF TECHNICAL ASSISTANCE ACTIVITIES (WT/COMTD/W/20)
CHAIRPERSON'S REPORT ON DISCUSSIONS WITH THE COMMITTEE ON
BUDGET, FINANCE AND ADMINISTRATION
15. The Chairperson recalled that in the 25th Session the Committee had been informed about the
critical financial situation in technical co-operation and about the resulting difficulties of the
Secretariat in responding to Members' requests.  The Committee had requested the Chairperson to
bring this matter before the Committee on Budget, Finance and Administration (CBFA).
Accordingly, at the informal meeting of the CBFA on 14 September 1999, the Chairperson of the
CTD and a representative of the Secretariat gave an overview of the situation.  The Chairpersonthanked the Chairperson of the CBFA for organizing  the informal Meeting of the CBFA and for the
very positive exchanges of views that Members had on this subject.  She reported that there was a
widely shared view that the funding of technical assistance should among the areas for immediate
decision by Ministers in Seattle.WT/COMTD/M/27
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16. The Chairperson asked the Secretariat to introduce the document WT/COMTD/20 on
Technical Assistance Activities.
17. The representative of the WTO Secretariat said that, at the informal meeting of the CBFA on
14 September 1999, Members had requested that the information provided on resources and
expenditure on technical co-operation for 1999 be provided in writing and this was contained indocument WT/COMTD/20, in which the information was also updated to 15 September 1999.  The
document distinguished three types of resources used for technical co-operation: the Regular Budget,
Extra-Budgetary funds used for special activities and Other Extra-Budgetary funds.  The second part
of the document provided a brief review of the evolution of technical assistance activities since 1995,
demonstrating the rapid growth in demand for such activities, most of which were now financed by
extra-budgetary funds.
18. The representative of Turkey asked the Secretariat to distribute to the CTD Members a
document relating to the impact on Member's contributions in 2000 of possible increases in technical
assistance funding through the Regular Budget resulting from the possible shift of funding from
Extra-Budgetary funds to the Regular Budget.
19. In response, later in the day, the representative of the WTO Secretariat circulated to Members
two documents (CRP (99) 31 and 32) on scales of contribution.  He explained that the Secretariat had
provided information on two options for the integration of a total of Frs. 10 million into the  regular
budget.  Under one option, there was an expansion to Frs. 4 million in the first year, to be followed by
two more equal annual increases of Frs. 3 million, over a total of three years.  Under the second
scenario, the full amount of Frs. 10 million would be integrated in one step.  These scenarios had been
proposed by Members in the General Council.  The figures were also based on the budgetaryproposals put forward by the Director-General for 2000 year, and did not take into account any
changes that might result from the general review  of the budget currently being undertaken in the
Budget Committee.  However, in any event the last column of each document would not change since
it represented the difference (Frs. 4 million in the first table, and Frs. 10 million in the second) that
was the impact of Members contribution in the integration of the Regular budget in the first yearunder the two scenarios.
20. The Committee took note of the statements made.
V. THREE-YEAR PLAN FOR TECHNICAL COOPERATION (WT/COMTD/W/64)
21. The Chairperson recalled that, according to the guidelines adopted by CTD on
15 October 1996, the three-year plan for technical co-operation was to be presented to the CTD at its
last Session of the year.  The document WT/COMTD/W/64 was a first draft for the three-year plan,
2000-02.  Given the critical financial technical assistance situation, as well as other issues, such as the
launch of the "Global Trust Fund" for technical co-operation by some Members; the presentation of a
number of proposals on the approach, the funding, the administration and evaluation of technical
co-operation activities; the results of the Working Group on improved technical co-operation, whichhad been circulated in March 1999; and the decisions to be taken in Seattle, the Secretariat had
decided that a conservative approach had to be taken in preparing the three-year plan.  She also noted
that the document raised several questions which needed to be examined, in particular, the broad
guidelines for technical co-operation activities in 2000.  Some specific activities, divided up by
regions, could be found in Annex 1 of the WT/COMTD/W/64.  For the years 2001 and 2002, thedocument gave some general vision in keeping with th e spirit of continuity and it also contained some
general information on priorities for the future.  Sh e suggested that, as the CTD had just received this
document and bearing in mind the aforementioned considerations, the CTD come back to the issue atWT/COMTD/M/27
Page 4
its first meeting in 2000.  In that way, the CTD would be able to take account of decisions taken in
Seattle.  Nevertheless, she asked if there were any comments on the subject.
22. The representative of Guatemala noted that in the programme there were no changes to the
programme of Trade Policy Courses that were nor mally held every two years for Spanish-speaking
countries.  He asked that more frequent courses for Spanish-speaking countries, once or even twice ayear, be included in the three-year plan.  Spanish-speaking countries had raised this concern on more
than one occasion and they had sent a letter to the Director-General, Mr. Moore, on this subject.  They
hoped that their concerns would be taken into account.
23. The representative of Cuba supported Guatemala.
24. The representative of El Salvador supported Guatemala and Cuba, adding that his delegation
had also expressed its concern on the matter on several occasions.
25. The Committee took note of the statements made.
VI. THE WORK PROGRAMME OF THE COMMITTEE
26. The Chairperson recalled that the work programme of the CTD had been discussed at the
previous meeting in July, based on an informal note by the Secretariat, and that, at that time, the
Committee had dealt with the period to the Ministeria l Conference in Seattle.  Since then delegates
had been focusing on the draft Ministerial Declaration for Seattle.  Accordingly, she suggested that
the Committee might look at what had been achieved hitherto and to have a preliminary discussion on
what the Committee should do after Seattle.  In her view, four main themes could be discerned under
the Committee's terms of references: special and differential treatment; technical co-operation;participation of developing countries in multilateral trading system; and the experience of the
developing countries with their own implementation and the implementation by their partners of
WTO agreements.  She also said that, at this stage, the Secretariat was completing two studies
requested by the Committee:  a paper on Special and Differential Treatment, of which a draft had
been sent to Members, and a paper with updated statistics on the participation of developing countriesin international trade.  The Chairperson asked the Secretariat to inform the CTD on the progress of
these studies.
27. The representative of the WTO Secretariat said that the two studies mentioned by the
Chairperson were close to finalization.  The study on special and differential treatment had been more
or less completed by the summer of 1999.  However, the Secretariat had since received some
additional information from other divisions of the Secretariat.  This information referred to
discussions on special and differential treatment in individual committees of the WTO.  He stated thatthe Secretariat was on the very last stages of this paper, and he hoped that this paper could be made
available to Members shortly.  The second paper, relating to the participation of developing countries
in the multilateral trading system, would be based on statistics on international trade available up to
1998 or 1999.  The Secretariat was trying to include, as far as possible, data for 1999 to try to get
some feel for the latest developments.  The Secretariat did not want to look at only at the time of thefinancial crises and the immediate effect on the financial crises on trade of developing countries,
which was obviously very important in 1998, but, hopefull y, also to look at developments through the
first seven or eight months of 1999.  The first part of the paper was a very long term look at the
development of developing countries trade since the beginning of the GATT 1948 up to the present
time, and this would be based on the paper that the Secretariat had produced for the High LevelSymposium in March 1999.  The second part would take a look at developing countries' trade from
1990 to 1998, or least to the financial crises.  The third part would try to analyse developments duringWT/COMTD/M/27
Page 5
and following the financial crises of 1997-98.  The Secretariat had already drafted the second part of
the paper and was now looking at the data for the third part. The Secretariat had not been able to
complete the paper until now because reliable data were not been available for 1999;  these were
important to show the post-crisis developments.  He hoped that the paper would be completed before
the Seattle Meeting, as requested by Members of the Committee.
28. Regarding the "Illustrative List of Elements for a Possible Work Programme" prepared by the
Secretariat, (the Illustrative List), the representative of the United States asked the Committee to
consider the same approach that the Chairperson had recommended for the Technical AssistanceThree-Year Plan.  The representative of the United States stated that several tirets listed in the
document included elements covered by various proposals before the General Council for Seattle.
Therefore, she proposed that discussion be deferred until after Seattle, otherwise it would be
necessary to include additional points based on suggestions of which Members were aware.
29. The Chairperson thought that the representative of the United States was in agreement with
her proposal to hold discussions after Seattle, that is, in the first half of the year 2000.  She drew
attention to the fact that the Illustrative List brought together  under four broad headings all the
elements that had been previously discussed.  However, she would appreciate hearing from the
Committee on the priorities that Members attached to these four headings, for instance, elements thatMembers believed needed further work or areas in which the Committee could cooperate with other
international institutions, such as the fiscal implications of liberalization, where the World Bank and
the IMF had carried out significant studies.  She asked what approaches the Committee might usefully
follow.  For example, did Members think it worthwhile having seminars that could be organized under
the auspices of the CTD and at which with experts might be invited to present and discuss theirstudies with Members outside of the formal framework of discussions?  The CTD also needed to look
at special and differential treatment.  She would like to hear Members' comments.
30. The representative of the European Commission (EC) stated that he welcomed the Illustrative
List drafted by the Secretariat.  However, points (I), (II), (IV) were the subject of proposals for
Seattle, and it was premature to start a lengthy discussion on how to approach these issues whichmight be overtaken by events in six weeks time and which might seem to prejudge many political
issues.  He proposed that the Committee use the disclaimer "Pending the Outcome of the Seattle
Ministerial" before "Illustrative List of Elements for a Possible Work Programme".  If the Committee
put this kind of sentence in bold in the heading, everybody would understand the character of the
document.
31. The representative of the United States noted that her previous intervention was in lieu of
putting disclaimers into the document, such as that  suggested by the EC.  However, it was not enough
to put in a disclaimer.  For example, in paragraph (II) on capacity building there was a reference to a
proposal having been made for a day of reflection on technical co-operation activities.  In fact, several
proposals had been made and this was being highlighted over others.  She said that the United States
would perhaps like to see other proposals listed in  the Illustrative List at this time, pending the
outcome in Seattle.  Elements  could even be added to this Illustrative List in Seattle.  If theCommittee went into this discussion at the present time or just put in a disclaimer, that would not do
justice to the amount of work on proposals that had been already put in the General Council and in the
preparatory process.  She would have to see whether the proposal for a day of reflection was before
the CTD or any other body.  The United States with other delegations had made a proposal for a
regular review of these issues in the General C ouncil. The United States would not be comfortable
with an illustrative list that only mentioned one proposal.
32. The representative of Mexico stated that he needed to consult with his capital on the
Illustrative List.  However, what was described on the Illustrative List were development-relatedWT/COMTD/M/27
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aspects, and this should be clearly defined.  As in  the case of capacity building, that the Committee
was talking about matters that should be focused on development.
33. The representative of Japan said that Japan welcomed the Illustrative List as a good basis for
discussion.  Nevertheless, he had the same concerns that had been raised by the EC and the United
States.  Members were, at this moment, in the preparatory process for the Ministerial Conference inSeattle.  There were also substantial proposals, made in the drafting phase of the Ministerial
Declaration, that were not reflected in the doc ument, such as the proposal to elevate the LDC
Sub-Committee to a full committee.  If this were accepted, what would be the relationship between
the CTD and the Committee on LDCs?  Would the  concerns of small economies be raised in the CTD
or in the future possible Committee on LDCs?  Another example was sustainable development which
was very important for Japan, but which was not covered in the Illustrative List.  The list was useful,
but the Committee could not be seen to prejudge the outcome of the Ministerial Conference of Seattle.Therefore, the Illustrative List should be sent to capitals for consideration and then the CTD could
revert to the issue after the Seattle in informal or formal mode.
34. The representative of India thought that there were two or three points of which Members
might wish to take note.  The first, mentioned by  the EC, had also arisen in the Committee on Trade
and Environment which had used the phrase "pending the future work programme".  There, Membersdid not even want references to Third Ministerial Conference in Seattle.  The delegation of Japan was
right.  There were several proposals which if accepted might or might not change the nature of the
work in the CTD.  Japan would obviously want to change the role of the CTD to that of an advisory
role.  India would not necessarily share this view at this point of time without understanding fully
what an advisory role meant and what impact it would have on the various negotiating groups.  Inorder to preserve Members' positions, India suggest ed that the Committee either went in one or two
ways.  One way approach might be to say "pending the future work programme".  Otherwise, it would
be necessary to go through the painful process of referring this document to the capitals and sitting
down and negotiating.  He supported the former approach, because those words had been used in
another Committee which was at least similar if not the same.  He proposed that the CTD stated"pending the future work programme" and then went on saying  "Illustrative List" and that Members
would come back to take a final decision at the first meeting in 2000.
35. The representative of Canada stated that this matter had been already discussed several times
during the summer CTD session.  She thought that, generally speaking, the Illustrative List
corresponded to the points raised in the CTD.  The list obviously did not try to coordinate all the
proposals made by all delegations in the context of the General Council's work.  She proposed that the
CTD examine the list at the appropriate time and come back to it on January 2000 year when theresults of the Ministerial Meeting were known.  Those results would set out the priorities that the
CTD should adopt, and nobody at the present CTD meeting wished to prejudge what would be
decided at the Ministerial Meeting.  As the Illustrative List did not have an official number, the CTD
probably did not need to take any action on the document.  It should be put it on hold and the CTD
could come back to it in January at an informal meeting.  In the meantime, the Secretariat might even
revise it in the light of the Ministerial results.
36. The representative of Egypt stated that he supported the statement made by India.
37. The representative of the United States supported the statements by Japan and Canada.  The
United States could not agree to adopting the document at the present meeting.
38. The representative of India suggested that the Committee could make it very clear that the
Illustrative List was not the final work programme of the Committee.  Delegations need some time to
see whether they could accept this paper with the disclaimer.WT/COMTD/M/27
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39. The representative of the European Commission thought that the Committee had nothing to
decide now.  The Committee should merely take note of the paper,  adding the disclaimer "Pending"
and decide to come back to it in January.
40. The representative of Turkey agreed with what had just been said by the representative of the
European Commission.
41. The representative of the United States agreed with the last point made by the EC.
Nevertheless, in taking note, the United States would want to come back on some of the text as well,
and did not feel that the disclaimer alone was enough.
42. The Chairperson reminded the committee that the in formal note was mainly in order to elicit
Members' comments.  It was not a formal draft.
43. The representative of the WTO Secretariat stated that, in presenting this Illustrative List of
Elements for a Possible Work Programme for the CTD, the Secretariat had tried to preserve an
invisible wall between propositions in the Committee and in the General Council preparatory process.
If the Secretariat had it wrong, especially in relation to the day of reflection on technical assistance,
this could be removed.  However, it was purely a document for reflection and it was not the intention
to present it for any decision at the present meeting.  It had been the intention to look at it more
closely after Seattle.
44. The Chairperson suggested that the Committee meet in informal mode in January 2000 to
work on this item.
45. It was so agreed.
VII. MELANESIAN SPEARHEAD GROUP TRADE AGREEMENT: NOTIFICATION
FROM PAPUA NEW GUINEA (WT/COMTD/N/9):  TEXT OF THE AGREEMENT
(WT/COMTD/21).
46. The Chairperson drew the Committee's attention to document WT/COMTD/N/9 that
contained the notification made by the delegation Papua New Guinea on the Agreement, concluded
between Fiji, Papua New Guinea, the Solomon Islands and Vanuatu.  This was a preferential
agreement between countries, notified under paragraph 2(d) of the Enabling Clause.  The text of the
agreement had been reproduced in document WT/COMTD/21 which had been circulated to WTO
Members.
47. The representative of Australia welcomed this notification.  WTO notification and
transparency requirements were important, and Australia appreciated the notification and the
communication from Papua New Guinea in that light.  Australia attached great importance tosupporting the economic and trade development of the countries of South Pacific region.  It
recognized the significant challenges that these countries faced and the need to ensure that WTO
provisions catered for their needs.
48. The Committee took note of the statement by Australia.WT/COMTD/M/27
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VIII.  OTHER BUSINESS
49. The Chairperson recalled that a request from the League of Arab States for observer status
had been circulated to Members.  As she had indicated earlier, no decision taken by the General
Council on the status of observers.  However, she wished to hear CTD's comments on this request.
50. The representative of Egypt supported the request, and hoped that at the next CTD meeting
Members would reach an agreement and would take a decision on this request.
51. The representative of Kuwait supported the request of the League of Arab States for observer
status.  The Arab League Council of Economic and Social Affairs conducted work on  trade,
investment and labour.  In addition, the Council had established an Arab Free Trade Area among its
members based on Article XXIV of GATT 1994.  The endeavour of the Council of Economic and
Social Affairs of the Arab League was to increase standards of living and improve the economicdevelopment of its Members.  Therefore, the representative of Kuwait asked WTO Members to give
positive consideration to the request.
52. The Chairperson said the CTD had taken note of the request from the League of Arab States.
The request would remain on the agenda for the next meeting of the CTD.
53. Turning to the dates of forthcoming formal and informal CTD meetings, the Chairperson
stated that the dates would need to take into account the Ministerial Conference in Seattle and the
UNCTAD X Meeting which would take place in Bangkok from 13 to 22 February 2000.  She thought
that it would be useful after Seattle to review the CTD work programme informally and proposed that
the CTD meet in an informal mode on 18 January 2000 for this purpose.  She then proposed to hold
the next formal meeting, the 28th Session, on 28 February 2000 (just after the UNCTAD Conference).
She proposed to hold the seminar on Special and Differential Treatment just before the next formal
session on 25 February 2000.
54. It was so agreed.
55. The Committee was adjourned.WT/COMTD/M/27
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ANNEX
Address by Mr. Jean Claude Faure, Chairman of the OECD Development Assistance Committee
to the Committee on Trade and Development, 18 October 1999
Introduction
Ambassador Diallo, ladies and gentlemen,
This is a welcome and timely opportunity for me to address the WTO Committee on Trade
and Development and I am very grateful for the invitation.
As Chairman of an OECD Committee, I full y share in the consensus emerging from the
OECD Ministerial meeting last May that in a new trade Round, development considerations must be a
central element.
As Chairman of the Development Assistance Committee (DAC), I want to convey just how
much importance the donor community attaches to interacting with the trade community, to better
understanding the opportunities and constraints faced by developing countries as they strive to
become more prominent players in the world tradin g system, and to working actively to help them do
so through the instruments of development co-operation.
I welcome this opportunity therefore to be able to inform you of the ways in which we work
in the DAC and how donors might be able to respond  constructively to some of the trade challenges
faced by our developing partners.
Allow me to say a few words about the role of the DAC in the OECD, how we operate and
how, through the co-ordinated activities of our Member states, we might make a contribution to
enhancing the capacity of developing countries to share in the dynamic synergies between trade and
growth in the global economy.
As an intergovernmental organisation that promotes policy dialogue on a wide range of policy
issues of relevance to its 29 Member states, the OECD has no executive powers or funds to disburse.
It does not provide technical assistance in any classical sense, except in a few exceptional cases.  Butby providing analysis in and across different policy areas as a basis for dialogue, encouraging peer
review and good practices, working to produce policy guidelines and harmonising views as a basis for
effective approaches to international issues, Member states benefit a great deal from sharing
experiences with others.  And increasingly, this process of sharing experience, good practices and
guidelines is extending beyond the membership of the OECD, as our Organisation reaches out to
other regions and actors.
This work of the OECD is essentially accomplished through our Committee structures.  The
DAC is one such Committee, where representatives from bilateral agencies, with the UNDP, the
World Bank and the IMF as permanent observers, try to develop common approaches, enhanceeffectiveness of aid delivery, improve co-ordination among donors, identify good practices and
develop guidelines.
In 1996, the DAC produced a short, high level report "Shaping the 21
st Century:  the Role of
Development Co-operation", which laid out a strategy based on internationally agreed developmentgoals and partnership principles.  This has since become known as the Development Partnerships
Strategy.  I must say that this approach has prov ed to be a powerful influence in the international
system.  Just a few weeks ago, at the time of the annual IMF/WB meetings in Washington, it was
agreed that World Bank and IMF programmes for poor countries will in future be based on povertyWT/COMTD/M/27
Page 10
reduction strategies and partnership principles.  The Managing Director of the IMF, M. Camdessus,
set out in the form of 7 Pledges  , the key UN Conference goals that had been identified in the
DAC Report.
The centrepiece of these goals is the reduction of the incidence of poverty by one half by the
year 2015.  It is clear that such a goal can only be achieved if developing countries can generate a
dynamic and sustainable growth process.  That requires the possibility and the capacity to engage in, a
dynamic fashion, in global trade and investment flows. In this context, a new WTO Round will be a
major opportunity for the trade policy community to contribute to an historic reduction of poverty in
the world at the beginning of the 21st Century.
OECD Support for Integrating the Developing  Countries in the Global Trading System
In the past two years, the OECD Council at Ministerial level has given prominence to better
elaborating the links between trade, investment an d development, to promoting more coherent policy
making towards developing countries, and to enhanc ing the role of the OECD in helping to integrate
developing countries in the global trading system.  At the meeting this year, Ministers emphasised that
the new Round must be responsive to the needs of all developing countries and that in this respect,
particular emphasis must be given to the special needs of least developed countries, including
improved market access.
These views were echoed also at the DAC’s High Level Meeting of Development Ministers
in May of this year.  The DAC HLM stressed the importance of reflecting development perspectives
in preparations for the new Trade Round. Ministers also indicated that development co-operation
could help identify effective instruments and appro aches to build capacity for trade, for implementing
Uruguay Round Agreements and for effective developing country participation in the new round.
These messages have also been emphasised at the Cologne G8 Summit and at the annualWorld Bank/IMF meetings just three weeks ago.
In short, we consider the relationship between trade and development to be an essential one
and a major priority for everyone.
Developing countries clearly have a major responsibility themselves for putting in place
trade-friendly policies that promote their further integration in the global economy.
But the OECD countries also recognise that policy coherence matters  and the need therefore
in OECD capitals, to become more aware of the development impacts of policy incoherence and to
better co-ordinate policy-making in instances where trade or other policies risk undermining
development prospects.
So what does this mean for the OECD and for the DAC in particular?We will try to move forward on two fronts.
First, we will confront the challenge of policy coherence by moving to set in train processes,
both in OECD countries and at the OECD in Paris, to ensure that the development impact of policy
making is analysed, discussed and acted on.
Second , we must try to become better aware of the particular needs and constraints in
developing countries for enhancing their capacity to become dynamic participants in trade, and then to
respond with effective development co-operation activities.
I will now briefly address these two areas of activity.WT/COMTD/M/27
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Addressing the Challenges of Policy Coherence
The arrangements now in place for addressing policy coherence issues among the WTO, the
IMF and the World Bank are an indication that policy coherence is an area that requires systematicattention.
In the OECD, we have responded to a mandate from Ministers to prepare a report on the links
between trade, investment and development and how OECD countries can better promote policy
coherence.  This report, entitled "Policy Cohere nce Matters", has been provided for this meeting.
OECD Ministers thus do indeed recognise the central importance of policy coherence towards
developing countries, in national policy-making frameworks as well as in international policy
frameworks.  But as we all know, coherent policy-making is far from easy in practice.  There are
numerous political constraints at every level.
Keeping it on the agenda at the OECD is important.  And Members of the DAC and the Trade
Committee are deepening their interaction as preparations step up for Seattle and beyond.
In the DAC itself, we are now systematically including an assessment of policy coherence in
our "peer review" process.  This is a process of examining each DAC Member’s development
co-operation policies and is perhaps comparable to your Trade Policy Review Mechanism.  Byconsidering a few issues of policy coherence for each of the DAC Members in the context of the Peer
Review, we are able to stimulate awareness and policy discussion processes in capitals.
Further, we are setting out to prepare a "policy coherence checklist".  This checklist will
provide guidance for policy makers in OECD capitals with respect to the impacts of policies oneconomic and social development in partner countries.  It will also consider the institutional aspects of
policy coherence to see how different agencies, national and international are able to take
development impacts into account.  It will address a variety of policy areas including:
- trade, agriculture and food security, and issues such as research, intellectual property
rights and information technology;
- international finance, debt, investment, private sector relations and migration;
- environment issues;- peacekeeping and conflict resolution, and the arms trade.An important aspect of policy coherence is of course to ensure that trade and investment
flows are not only dynamic and inclusive, but contribu te to rising social and environmental well being
in developing countries.  Our current work programme in the DAC includes major projects in these
areas.  We are working to produce Guidelines for Donor Assistance to Poverty Reduction.  And weare supporting the endeavours of developing countries to establish effective processes for defining and
implementing national sustainable development st rategies and to meet their commitments under
global environment conventions.  In this way, the development co-operation community is actively
engaged, in a direct and practical way, in the social and environmental concerns that are important
issues in the WTO forum.WT/COMTD/M/27
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Integrated Efforts to Enhance Capacity to Trade
The other area where the DAC and its members can provide input is in developing common
donor approaches and enhancing bilateral donor efforts to build trade capacity in developing
countries.
We are very much aware of the Integrated Framework for least developed countries' trade
development and we maintain close contact with the co-ordinators from the different multilateral
organisations involved.
Since 1997 we have organised two workshops in Paris on the subject of capacity development
for trade in which we invited representatives of all six organisations, and we contributed a report tothe WTO High Level Meeting in 1997 on the activities of bilateral donors in this area.
The stress given in the Integrated Framework to  demand-led and locally owned approaches is
fully in line with the orientations reflected in the DAC’s Development Partnership Strategy.
Given the importance of trade and development linkages, many bilateral donors are now
striving to be more effective in their efforts to he lp the less advanced developing countries strengthen
capacity to trade.  The lessons we have learned from experience so far suggest strongly that successful
trade development must consist of a concerted, multi-faceted approach that targets numerous actors,
institutions and processes at the same time in an integrated and comprehensive manner.
This is not an easy approach when it comes to the level of operationalising it in the field.We are therefore embarking on a project to prepare a set of good practices for donors in this
area.  In May of next year we will hold another workshop with representatives from the public andprivate sector in partner countries to test the good practices before they are finalised and disseminated
at the end of next year.
Lessons learned from technical co-operation generally point to two critically important points.First, donors need to tailor their strategies to the specific needs of the particular developing
countries.  Systemic needs assessments undertaken by the partner country in co-operation with the
private sector must be the point of departure.  Such assessments must be much more than shopping
lists.  They must embody the country’s own vision of how it can insert itself into market-driven,
client-oriented patterns of trade in goods and services where value-added retained in the country is
high.
This implies a significant agenda of policy development and institution building and an
intensive dialogue between the Government and the private sector.  It involves a heavy initial
investment of time and effort, but ownership is essential for lasting impact.
DAC work in capacity building generally provides important guidance, including on
strengthening the participation of the private sector and civil society in developing countries.  Here is
a fundamental point, the wealth of nations is built not on natural resources or cheap labour, but on
institutional development which provides the framework of accountable and effective governance in
both the public and private sectors, so that enterprise and human and social development can flourish
on a sustainable basis.  Technical assistance for trade capacity building thus goes well beyond thecapacities needed to participate in the WTO.
Second, a locally owned,  needs based approach requires a shared agenda and good
co-ordination at the country level.  This can be facilitated by designation of a lead donor orWT/COMTD/M/27
Page 13
multilateral agency with a strong local presence and a comprehensive understanding of local
institutions and policy issues.  We cannot stress too strongly that donor efforts need to be more
focused and coherent within each developing country.  This requires real long-term commitment on
both sides, appropriate expertise and the cultivation of a "learning as you go" culture rather than the
delivery of pre-cooked generic packages.  Our good practices will focus on this need for coherent andco-ordinated approaches keyed to specific country contexts.
We look forward to the participation of the relevant multilateral agencies and policymakers
and other actors in developing countries as we elaborate these good practices.
I believe that my presence here today symbolises the emergence of a more systematic process
of interaction between the trade community and the development co-operation community.  We need
to work at this interaction, it has to be a dynamic evolving process that we discuss and evaluate
regularly.
Today we are in sense verifying that we are al l attaching the same priority to the need for
policy coherence in both developed and developing countries and to the role of trade capacitybuilding.  These are key building blocks for the future of a well-functioning global economy in which
all countries can take part.
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