WORLD TRADE  
ORGANIZATION  WT/IFSC/W/15 
29 June 2006 
 
 (06-3137) 
Integrated Framework Steering Committee  
  
 
AN ENHANCED INTEGRATED FRAMEWORK 
 
Report of the Chairman of the Task For ce on an Enhanced Integrated Framework, 
 
Including Recommendations  
 
 
 The following communication dated 19 June 2006, is being circulated at the request of the 
Chairman of the Task Force on an enhanced Integr ated Framework.  It contains his Report and the 
Task Force's recommendations.  
_______________ 
 
 
1. A Short History of the Integrated Framework 
 The first WTO Ministerial Conference, held in 1996, recognized that the Least-Developed 
Countries (LDCs) faced difficulties integrating into the global economy.  This led to the adoption of 
the WTO Plan of Action for Least-Developed Countries.  The following year, the WTO convened a 
High Level Meeting to discuss the specific needs of the LDCs and to formulate a programme to strengthen their trade capacities, including supply-sid e and market access capacities.  The outcome of 
this meeting was what became known as the Inte grated Framework for Trade-Related Technical 
Assistance to Least-Developed Countries, or the "IF" in short.  
 
 The main objective of the IF was to improve th e capacity of the LDCs to formulate, negotiate 
and implement trade policy so as to be able to full y integrate into the multilateral trading system and 
to take up the market opportunities this presents.  Support was offered to the IF by six major multilateral agencies, namely the International Mone tary Fund (IMF), the International Trade Centre 
(ITC), the United Nations Conference on Trade and Development (UNCTAD), the United Nations 
Development Programme (UNDP), the World Bank (WB) and the World Trade Organization (WTO).  
  The achievements of the IF during the early years were modest, with only a handful of LDCs accessing benefits from the initiative.  When the six agencies met in 2000 to review progress they 
adopted a number of recommendations and implemen ted institutional changes to improve the IF's 
effectiveness.  Two main objectives were formulated for the revamped IF;  firstly, to mainstream trade 
into the LDCs' Poverty Reduction Strategy Papers (P RSPs) or similar national development plans;  
and secondly, to assist in the coordinated de livery of trade-related technical assistance. 
  A new tripartite governance and management stru cture was established to enable the IF to be 
more country-driven and better coordinated. The revamped structure, which still applies today, 
comprises:  
• The IF Steering Committee (IFSC): the six core agencies and representatives of the LDCs and 
donors.  Participation is open to all WTO Member s and Observers.  The main functions are to 
oversee the IF, provide policy direction and assess progress. 
 WT/IFSC/W/15 
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  • The IF Working Group (IFWG):  the six core agencies, two LDCs and two donors.  The main 
functions are the overall management of the IF, monitoring implementation, and overseeing 
the Trust Fund. 
 
• The IF Secretariat (IFS):  housed in and st affed by the WTO Secretariat.  The IFS is 
responsible for the day-to-day management of the IF. 
 
• The IF Trust Fund (IFTF):  managed by UNDP and funded on a multi-donor basis. 
  The IF was restructured around two funding "windows": 
 
o Window 1:  for financing Diagnostic Trad e Integration Studies (DTISs) (US$300,000 
per country) and strengthening in-country  structures (US$38,000 per country). 
 
o Window 2:  for financing priority capacity building projects in the LDCs as identified 
in the DTIS Action Matrices (US$1 million per country). 
  At the country level, the delivery of the IF  was structured around a number of processes and 
responsibility centres, including: 
 
• The National Steering Committee (NSC):  repr esentatives of government, civil society and 
private sector.  Main functions are to provide overall in-country coordination and direction to 
the IF, to monitor progress and to he lp integrate trade into the PRSP. 
 
• The National Focal Point (NFP):  usually a high level civil servant from the Trade Ministry or 
other core economic Ministry.  Main functions  are to coordinate the IF process, build 
awareness and liaise closely with the donors. 
 
• The IF Facilitator (IFF):  a representative of the local donor community.  Main functions are 
to coordinate activities between the donors and the government, to assist the government in 
developing a work programme, and to liaise with donor HQs. 
 
• The Local Project Appraisal Committee (LPAC):  comprising various representatives of 
government, private sector, civil society, the core agencies, the NFP and the IFF.  Main function is to approve projects  for funding under Window 2. 
  Approximately 40 Diagnostic Trade Integrati on Studies (DTISs) have been undertaken so far 
or are in the pipeline.  These diagnostics include a comprehensive appraisal of barriers to trade and 
typically cover market access, trade policy, transp ortation, trade facilitation, sector studies and the 
investment framework, as well as the overall macroeconomic situatio n and an institutional 
assessment.  DTIS recommendations are summarized in an Action Matrix.  
2. Why Enhance the Integrated Framework? 
 A number of evaluations of the IF have been undertaken recently.
1 A simulation workshop2 
was also undertaken last year.  The general conclu sion from these is that the IF has provided a good 
framework for helping the LDCs enhance their trad e development capacity and facilitate adjustment 
                                                      
1 E.g. "Evaluation of the Revamped Integrated Fr amework For Trade-related Technical Assistance to 
the Least-Developed Countries", Capra-TFOC Consortium, November 2003, and "Integrated Framework for 
Trade-Related Technical Assistance Addressing Challenges of Globalization:  An Independent Evaluation of the World Bank’s Approach to Global Programs: Case Study".  Agarwal and Cutura, 2004.  
2 Integrated Framework Simulation, Addis Ababa, Ethiopia, September 2005.  WT/IFSC/W/15 
 Page 3 
 
 
  and integration into the multilateral trading system, but that there are still significant shortcomings in 
the process.  The IF has generally failed to ma instream trade into the PRSP process and has not 
provided adequate financial and human resources to the LDCs to deliver the intended outcomes.  The 
process has been slow and the success in moving from th e diagnostics and priority-setting of the IF to 
investments by the donors and agencies under their permanent programmes has been relatively low.  
In other words, there is an implementation gap;  priorities identified in the DTIS process are not being 
picked up in mainstream investments.   It is also apparent that country ownership has been weak.  The nati onal IF structures have 
generally not worked to integrate trade into the de velopment process and there is often still a lack of 
awareness of the importance of trade at the national level.  Capacity to take  the integration process 
forward is generally inadequate and the capacity building support that has been provided through the 
IF has been inadequate to the t ask.  Trade is still seen primarily as the prerogative of the Ministry of 
Trade and, although the active engagement of th e Ministries of Finance, Planning and Economic 
Development is essential to the success of the pr ogramme, it has not always been present. In some 
cases these barriers have been overcome, usually due to  strong political leadership, but this is not the 
norm.   The donor community has generally not responded adequately to the needs identified in the 
DTISs.  The fact that the findings and recommendati ons of the DTISs have not been adequately fed 
into the PRSP and similar processes, or into  the programming frameworks of other donors, 
contributes to this problem.  The IF is still often seen  by both the donor community and the LDCs as a 
stand-alone process.  Trade is inadequately seen, by  both donors and recipients, as an integral aspect 
of economic development and poverty reduction, so do es not feature high enough on their priorities.  
 
3. The Work of the Task Force 
 Given the growing interest in trade and de velopment, and the weaknesses noted above, the 
Development Committee of the World Bank and IMF at their meeting in September 2005 concluded
3 
that the IF should be enhanced and provided wi th additional resources.  The World Bank staff 
estimated that an amount of between US$200 m illion and $400 million would be needed for an 
enhanced IF, based on the needs id entified in the current 40 recipient countries and assuming that the 
IF would be expanded to include the "IDA-only" count ries.  Subsequent to this, the IFSC established 
a Task Force to develop proposals for such an enhancement, includ ing expanding the IF’s resources 
and scope, and making it more effective.  The Terms of Reference of the Task Force are provided in Appendix I.    The Task Force included representatives of LDCs and donors (see Appendix II for list of 
members) and, after an initial meeting chaired by  the Ambassador of Zambia, the Ambassador of 
Canada was invited to assume the Chair.  The T ask Force conducted its work in two phases, before 
and after the Hong Kong WTO Ministerial.  In its  initial phase the Task Force developed consensus 
recommendations on its terms of reference and key elements.  These were approved by Ministers at 
Hong Kong.   
 Subsequently, the Task Force met twelve ti mes between January and May, 2006, including a 
session to hear the views of the IF agencies (W TO, World Bank, UNDP, IMF, UNCTAD, ITC).  To 
guide its substantive discussions, individual discussi on papers were prepared by members on scope, 
funding, in-country performance, and on manageme nt, governance and administration.  The Task 
Force conducted a two-day workshop, 1 to 2 Apr il, at Coppet, Switzerland, to develop initial 
                                                     
 
3 Development Committee Communiqué of the Joint Ministerial Committee of the Boards of 
Governors of the Bank and the Fund on the Transfer of Real Resources to Developing Countries, of 
25 September 2005. WT/IFSC/W/15 
Page 4  
 
  recommendations.  In its final meetings the Task Force refined these recommendations, a task 
considerably aided by contributions made by the IF agencies.    Throughout its work the Task Force benefited from the strong engagement of its members, ensuring that there was always a lively and info rmed discussion.  Task Force members took their 
responsibilities extremely seriously.  It was partic ularly gratifying to note that there was often 
representation from capitals (from both the LDCs and donors) as well from the Geneva missions, 
illustrating the importance attached to the work of the Task Force by its me mbers.  The Task Force 
benefited from a strong blend of developmen t and trade expertise among its membership. 
 
 The point of departure for the substantive discussions of the Task Force was the Hong Kong 
Ministerial Declaration
4, which reaffirmed the commitment "to effectively and meaningfully integrate 
LDCs into the multilateral trading system," noted th at the Ministers attached "high priority to the 
effective implementation of the Integrated Framewor k" and recognised the "urgent need to make the 
IF more effective and timely" (paragraph 48).  Minist ers required the Task Force to report back to the 
IF Steering Committee by 30 April 2006 so that  an enhanced IF could be launched by 
31 December 2006.  It was agreed that the enha nced IF should comprise three specific elements: 
 
(i) increased, additional, predictable fina ncial resources to implement Action 
Matrices;   
(ii) strengthened in-country capacities to ma nage, implement and monitor the IF 
process;  and 
(iii) enhanced IF governance. 
 The Task Force recognized the importance of trade liberalization and the fact that such 
liberalization should lead to improved economic co nditions in the LDCs and assist in meeting the 
Millennium Development Goal of reducing poverty by half.  However there was also a recognition 
that trade liberalization in itself would not bring about such improvements unless it was handled in a 
sustainable manner and integrated into a country's overall development strategy.  
  The Paris Declaration on aid effectiveness
5 was seen as very important in this process, and 
our recommendations draw on these principles.  
                                                      
4 Ministerial Declaration of the WTO Ministeria l Conference held in Hong Kong, D ecember 2005. 
5 The Paris Declaration on Aid effectiveness:  Ownership, Harmonisation, Alignment, Results and 
Mutual Accountability, March 2005.  High Level Forum.  WT/IFSC/W/15 
 Page 5 
 
 
   
The Paris Declaration  makes specific commitments in the following areas: 
1. Strengthening partner countries’ national d evelopment strategies and associated operational 
frameworks (e.g., planning, budget, an d performance assessment frameworks). 
2. Increasing alignment of aid with partner count ries’ priorities, systems and procedures and 
helping to strengthen their capacities. 
3. Enhancing donors’ and partner countries’ resp ective accountability to their citizens and 
parliaments for their development polic ies, strategies and performance. 
4. Eliminating duplication of efforts and rationa lising donor activities to make them as cost-
effective as possible. 
5. Reforming and simplifying donor policies and procedures to encourage collaborative 
behaviour and progressive alignment with partner countries’ priorities, systems and 
procedures. 
6. Defining measures and standards of performanc e and accountability of partner country 
systems in public financial management, procurement, fiduciary safeguards and 
environmental assessments, in line with br oadly accepted good practices and their quick and 
widespread application. 
 
4. The Main Conclusions of the Task Force 
 The Task Force recognized that the IF has had positive results in a number of LDCs and that 
it was important to capture and build on the strengt hs of the existing arrangements to improve its 
effectiveness and efficiency.  The Task  Force identified four critical issues: 
 
• There needs to be much stronger ownership of the IF by the LDCs and the donors.  In part 
this is a capacity problem.  Capacity needs to  be developed and strengt hened in the LDCs to 
facilitate greater ownership.  Similarly, donors n eed to give much greater prominence to these 
issues and to provide more resources.  
 
• There is a gap that needs to be filled betw een the diagnostic and submission of "bankable 
projects".  In addition, the diagnostic work of the IF needs to be more dynamic, with the DTISs and Action Matrices being updated on a regular basis.  
 
• Responsibility for management and implementati on must be more focussed.  Currently it is 
spread wide and thin.  Everyone, yet no one is r esponsible.  There needs to be a much clearer 
management and governance structure.  
 
• There is a need for adequate funding, provided in  a predictable manner, to meet the objectives 
of the IF.  
  In making our recommendations, we considered various options and alternatives, sometimes 
with protracted and rich debate.  However, we  reached specific conclusions on each aspect.   
 
 The Task Force was unanimous in recognising that the IF should be country-driven.  We 
realized, however, that the LDCs are often unable to  do all that is necessary for the country to take 
ownership.  The capacity is often just not there.  The IF therefore has to support capacity building in 
the LDCs to enable countries to assume greater owne rship.  We agreed that much more support needs 
to be given to the national Focal Point.  This s upport could include such measures as partial coverage 
of staff costs, costs of local experts, a portion of  local running costs and equipment such as computers 
and related accessories.  Provision also should be ma de for short term inputs such as sectoral studies 
and cost-benefit analyses.  The IF al so needs to help raise the profile of trade and of the trade ministry WT/IFSC/W/15 
Page 6  
 
  in the LDCs so that the highest organs of stat e give adequate recognition to the topic.  The 
establishment of a high level inter-ministerial commi ttee is highly important to ensure buy-in across 
government departments.    Another facet of ownership concerns the donor s, who have generally not paid sufficient 
attention to the need to provide adequate resour ces and to provide them in a well-coordinated and 
harmonised manner.  The donors need to give great er recognition to the importance of trade and to 
secure more funds in a sustainable manner.  They need to harmonize procedures and coordinate more 
amongst themselves in the delivery of projects and programmes – focussing on the priorities in the Action Matrices.  Donors should be encouraged to harmonize their trade related programming around 
the DTIS, which is an example of a shared analysis as identified in the Paris Declaration.  They also 
need to invest in capacity building measures internally , both at Headquarters and in the field.  Internal 
capacity building will be critical as we scale up the IF and respond more generally to the aid for trade 
agenda.  
 The Task Force agreed that the scope of th e IF should be broadened to support activities 
related to the analysis and prioritization of needs,  and the mainstreaming of these into development 
strategies, the development and implementation of  Action Matrices, and coordination among donors.  
We recognized that, while the DTIS provides a good diagnostic base and the Action Matrix articulates 
what needs to be done, the process could, and h as stopped there as there is no clear mechanism to 
facilitate implementation.  More effort is need ed to fill the gap between the Action Matrix and 
implementation leading to bankable projects that wi ll attract the necessary funds.  Accordingly, we 
agreed that the scope of the enhanced IF shoul d be enlarged both upstream and downstream.  
  We further realized that as the global economy is moving at a fast pace, the IF should also 
finance updates to the DTISs and Action Matrices an d facilitate other studies and activities that would 
be needed from time to time.  This would make  the Action Matrices living documents and enable 
them to be better integrated into PRSPs or other eco nomic development plans.  The need for the IF to 
address supply-side issues, along with the importan ce of facilitating development of appropriate 
infrastructure was emphasized, especially by LDC members of the Task Force. 
  The Task Force discussed at some length wh ether the IF coverage should be expanded to 
include other low income developing countries that  are not LDCs but which have a need for trade-
related technical assistance.  We concluded that the IF should remain exclusively for the LDCs, as 
their needs are particularly acute, although a similar mechanism could be of use in other countries.  
  Under current arrangements, responsibility fo r the IF amongst the agencies and donors is 
diffuse.  The WTO hosts a small Secretariat; UNDP is responsible for the Trust Fund;  the World 
Bank, and sometimes UNDP, are responsible for the DTISs; and different donors are appointed as facilitators in the different LDCs.  The role of the other three agencies is rather unclear.  Management 
is fragmented, with the result that there is a lack of clear accountability.  The IFWG itself also has had 
a major role in decision-making, yet it meets only infrequently and is not a suitable body for undertaking day-to-day management functions.  
 
 In considering an optimal governance structure for the IF the Task Fo rce discussed several 
different models.  These ranged from tinkering at the edges to making very radical changes, including: 
 
• improving the current arrangements wit hout changing current attributions; 
 
• concentrating management and main respons ibilities into one agency but keeping the 
Secretariat separate; 
  WT/IFSC/W/15 
 Page 7 
 
 
  • concentrating all the functions in  one of the existing agencies; 
 
• establishing a completely new organization with its  own legal status or even contracting the 
whole process out to a private sector provider. 
  We undertook a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis for each 
of these options and realized that there were trade offs for each option.  We discounted the first and 
last options as being incompatible with  the challenges of an enhanced IF.  
  The Task Force agreed that the IF should be  managed on a sustainable basis with adequate 
resources to ensure it functions in a professional and time-efficient manner.  Clear lines of accountability must exist.  Annual work plans and b udgets must be set to improve predictability and 
facilitate increased involvement by the donors.  We th us concluded that the existing Secretariat should 
be strengthened and a Chief Executive Officer appointed  to lead it.  This would allow for clear lines 
of responsibility and authority, and would also  facilitate quicker decision making and improved 
implementation.  We decided that the WTO would be  the best agency in wh ich to house the Executive 
Secretariat as it provides the current IF Secretariat and is intimately connected with the trade agenda, 
Geneva is probably the best location because of th e presence of the WTO but also to capitalize on the 
presence of other key trade and deve lopment institutions and to fac ilitate access for the LDCs, many 
of which have trade representation there.  However the Task Force strongly felt that the CEO should report directly to its own board and be independent of the WTO to allow it sufficient flexibility and 
independence.  The Executive Secretariat would ha ve to engage actively with the national Focal 
Points in the LDCs and develop strong a nd close working relationships with them. 
 
 The Task Force recommends that the CEO re port to a Board, which although similar in 
structure to the current IFWG would not be invo lved in day-to-day management issues, as these 
responsibilities would be delegated to the CEO.  The Board in turn would report to the IFSC which 
would meet at least once annually.  The IFSC woul d continue to provide policy oversight, but, in 
addition, would ensure transparency and inclusiv eness in the decision making process.  We also 
agreed that there must be strengthened and c ontinuous monitoring and evaluation to ensure the 
enhanced IF achieves its objectives.   The Task Force further agreed th at, to be successful, the IF would need to continue to benefit 
from the expertise and knowledge brought to it by th e six IF implementing agencies.  Each of the 
agencies has its own individual competences.  We recognized that to function well the IF will 
continue to rely on services provided by these agencies in the field.    Throughout its deliberations the Task Force rec ognized the critical role of the private sector, 
which ultimately drives trade.  There was a broad c onsensus that the private sector should be included 
in the work of the IF at the country level, at all st ages, including the diagnosis stage.  To this end, the 
Task Force agreed that the IF Secretariat should deve lop strategies to include the private sector in the 
work of the IF. 
 
 The Task Force appreciated th at the current level of funding, approximately $35 million, is 
inadequate.  We therefore looked at what would be  required to build a reasonable level of capacity 
locally and meet reasonable demand.  Our indicativ e costing exercise suggested that the IF should 
mobilize around $400 million over five years, th rough a multilateral trus t fund and bilateral 
cooperation.  There would need to be sufficient f unding available in the multilateral trust fund to meet 
the costs associated with domestic capacity building (Tier I), some, but not all activities identified in 
the Action Matrices (Tier II), and the costs of the Executive Secretariat.  Donors committed to 
participating in a pledging exercise which woul d be initiated following the approval of the Task 
Force’s recommendations. WT/IFSC/W/15 
Page 8  
 
   
 The Recommendations of the Task Force on an  Enhanced Integrated Framework and an 
Indicative Costing for the Enhanced IF are included in this report at Appendix III.  
5. The Next steps 
 Once the IFSC has approved the Task Force' s recommendations more work will need to be 
done to flesh out the details and undertake some specific actions so that implementation of the 
enhanced IF can proceed in January 2007.   This work will need to focus on: 
 
• institutional issues, including staffing of the Executive Secretariat,  
• defining the in-country approach and programming issues, and 
• launching the replenishment process. 
 
The specific institutional issues include: 
 
• transmitting details of the enhan ced IF to all stakeholders, 
• drafting new terms of reference for the IFSC and the Board, 
• transforming the IFWG into the Board, 
• clarifying the status of the Executive Secretariat and its relationship with the WTO, 
• drafting a service agreement with the WTO, 
• specifying the type of staff for the Executive S ecretariat, including drafting job descriptions, 
• initiating the recruitment process for the CEO and other staff, and 
• investigating the most cost-effective method for managing the trust fund. 
 The in-country issues that have to be fleshed out include the following: 
 
• detailing likely in-country measures needed to support the Focal Point through the national 
implementation unit, 
• discussing the role of donors in-country including that of the donor coordinator, 
• clarifying the roles of the different agencies and other stakeholders, and 
• working out details for in-country programming whereby the different agencies would have a 
clearer picture of their possible specific responsibilities and how the process would work, including pre-DTIS work, preparation of the DTIS, mainstreaming work, preparation for and implementation of activities funded through Tier 2. 
 
The work regarding the replenishment process includes:  
• further clarifying the cost estimates, and 
• fixing a date for and organizing a pledging conference.  WT/IFSC/W/15 
 Page 9 
 
 
  Appendix I  
Task Force on an enhanced Integrated Framework  
 
Terms of Reference  
 
 
 A Task Force is set up in light of the ou tcome of the Development Committee of the World 
Bank/IMF Annual Meeting of 24-25 September 2005 which endorsed the proposal for "an enhanced 
Integrated Framework for Trade-Related Technical  Assistance to the Least-Developed Countries, 
including expanding its resources and scope and making it more effective".6 
 
Phase One 
 
 The Task Force shall consult with stakehol ders and make proposals to the Integrated 
Framework Working Group and Steering Committee on aid for trade and the enhancement of the 
Integrated Framework. 
  The Task Force shall report to the Inte grated Framework Working Group and Steering 
Committee no later 2 December 2005.   The recommendations contained in the report shall build on the outcome of the World 
Bank/IMF Annual Meetings of 24-25 September 2005, a nd take into account the recent IF Simulation 
exercise, the Kigali Workshop and evaluations of the IF.  
Phase Two 
  Taking into account any decisions taken by the Integrated Framework Working Group and 
Steering Committee and the WTO Hong-Kong Minist erial Conference, further proposals will be 
elaborated beginning in January 2006 and with a timet able to be agreed in Phase One.  A report shall 
be submitted to the Integrated Framework Worki ng Group and Steering Committee by 30 April 2006.  
The enhanced IF should be launched 31 December 2006 at the latest.  Consultations 
 
 The Task Force shall consult with the six IF Agencies and other stakeholders. 
 
Composition 
 
 The Task Force will be composed of repr esentatives of the Integrated Framework Donor 
Group and Integrated Framework Le ast-Developed Countries.  The members of the Task Force will 
select its chair.  The Task Force will be supported by consultants.  Decision of the Integrated Framework Working Group
 
 
 The IFWG agreed that an enhanced IF  comprises the following three elements: 
 
(i) increased, additional predictable financial resources to implement Action 
Matrices; 
                                                      
6 Development Committee Communiqué of the Joint Ministerial Committee of the Boards of 
Governors of the Bank and the Fund on the Transfer of Real Resources to Developing Countries, of 25 September 2005 . WT/IFSC/W/15 
Page 10  
 
   
(ii) strengthened in-country capacities to ma nage, implement and monitor the IF 
process;  and 
 
(iii) enhanced IF governance.   WT/IFSC/W/15 
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  Appendix II  
Task Force on an enhanced Integrated Framework  
 
Membership of the Task Force  
 
 Benin    Dominique Fifatin 
Eloi Laourou 
Canada (Chair)   H.E. Don Stephenson 
Mark Gawn 
European Commission   Jan-Peter Mout 
Peter Young Walter Kennes Andrea Nicolai 
Finland    Jatta Jamsen 
France    Emmanuel Farcot 
Italy    Dario Ciccarelli Japan    Kiminori Iwama      Asoko Sato Lesotho    Pheko Masabata Nepal     H.E. Gyan Chandra Acharya.  
Norway    Frederik Arthur 
Rwanda   Edouard Bizumuremyi Senegal    Mbaye Ndiaye Sweden    Niklas Strom Switzerland   Jean-Pierre Cuendet 
    D a r i u s  K u r e k  
UK    Edward Brown     Susan Prowse USA    Nance Kyloh 
Nancy Adams Anne Simons-Benton 
Zambia    H.E. Love Mtesa 
  Note:  
The Task Force was open ended. 
 WT/IFSC/W/15 
Page 12  
 
   
Appendix III
 
Recommendations of the Task Force on an enhanced Integrated Framework  
 Preamble 
 
 The Task Force endorses the mission of the IF.  The goal of the IF is to enhance the capacity 
of LDCs to integrate into the multilateral trading system in order to reduce poverty and benefit from 
increased market access.  The Task For ce reaffirms the mandate of the IF: 
 
• to mainstream trade into LDCs’ national de velopment plans such as  Poverty Reduction 
Strategy Papers (PRSPs); 
• to assist in the coordinated delivery of trade-re lated technical assistance in response to needs 
identified by LDCs; 
• to develop the capacity of LDCs to trade, including through capacity building and addressing 
supply constraints. 
 
 In the light of the evolving situation the IF  should complement the current aid for trade 
discussions and other related initiatives.    Commitment to mainstreaming trade into th e national development processes such as the 
PRSP process is critical to achieving Millennium Development Goals.  The IF is a tool and a means to an end.  It is a process feeding into the br oader framework for donor support and programming around 
a country's development planning and priorities. 
  The Task Force wants to strengthen the IF process, building on the existing structure and modalities wherever possible, and to continue to benefit from the full participation of the six IF 
Agencies (IMF, ITC, UNCTAD, UNDP, WTO and the World Bank). 
 
 The enhanced IF should be guided by the aid effectiveness principles set out in the Paris Declaration, such as donor harmoniza tion, using country systems, pr omoting ownership and involving 
stakeholders such as the local private sector.  The strength and potential that the IF concept offers 
could be considered as a methodology for further delivery of trade related assistance.  
 Pursuant to the Hong Kong Ministerial Declara tion, the enhanced IF should be comprised of 
the following three specific elements:  
• Provide increased, predictable, and additional funding on a multi-year basis;  
• Strengthen the IF in-country including through mainstreaming trade into national 
development plans and poverty reduction strate gies; more effective follow-up to diagnostic 
trade integration studies and implementation of action matrices; and, achieving greater and 
more effective co-ordination amongst donors and IF stakeholders, including beneficiaries; 
• Improve the IF decision-making and management structure to ensure an effective and timely 
delivery of the increased financial resources and programmes. 
 1. Scope 
 
 It is proposed that the current Window 1 should be modified to support greater in-country capacity and should cover a core package of activities.  It is proposed to call this "Tier 1".  The current 
Window 2 should be modified to facilitate greater implementation of activities identified as priorities 
in the Action Matrix.  It is proposed to call this "Tier 2".   WT/IFSC/W/15 
 Page 13 
 
 
  1.1 Coverage 
  The coverage of the IF should be enhanced to include:  
• Upstream activities – capacity building to help prepare countries for undertaking a DTIS and 
integrating the DTIS into their national development plans such as the PRSP; 
• An expanded DTIS to include broader trade -related issues such as needs assessment for 
infrastructure including related policy design,  cross-cutting and regional issues when so 
requested, and response to needs emanating fro m on-going trade liberalisation processes and 
new trade rules, including the DDA; 
• Periodic updates to the DTIS as and when necessary; 
• Downstream activities covering integration with  the national development plan, preparation 
for implementation of projects and programmes identified in Action Matrices, and 
implementation of projects, including projects ta rgeted at removing supply-side constraints, 
according to criteria to be developed. 
  The core areas eligible for intervention as defined in the modalities for Window 2 would 
remain the same and would support bridging activ ities identified in action matrices.  The existing 
terms of reference for Window 2 include the following items: 
 
• Institution-building to handle trade policy issues; 
• Strengthening of export supply capabilities; 
• Strengthening of trade support services; 
• Strengthening of trade facilitation capacity; 
• Training and human resource development; 
• Assistance in the creation of a supportive tr ade-related regulatory a nd policy framework to 
encourage trade and investment. 
 
1.2  Modalities 
  Tier 1:  This would provide resources from the Trust Fund that are available to all IF countries for core functions, taking into account the availability of alternative funding and building on 
existing activities in the trade sector.  This would cover: 
 
• upstream HR capacity building; 
• preparation and/or updating of a DTIS; 
• provision of support to the national implementa tion unit and key institutions, including human 
resource capacity and small capital equipment such as computers, etc; 
• assistance to facilitate integration in to the national development plan. 
 
 Tier 2:  This would provide funding from the Trust Fund for activities as identified in the 
Action Matrix, taking into account the availability of alternative funding and quality of projects.  The 
Trust Fund would provide bridging funding to jump start activities identified in the DTIS such as 
project preparation, feasibility studies as well as funding of smaller projects including seed projects.  Illustrative activities/projects include:  
• assistance to implement specific WTO and other trade policy commitments; 
• preparatory activities for infrastructure development and infrastructure projects;  
• activities to harmonize action matrices with national development plans such as PRSPs, and 
to prioritize and provide cost benefit analysis  leading to project design and implementation; 
• further assistance to the national implementation unit and key institutions; WT/IFSC/W/15 
Page 14  
 
  • assistance to develop a national trade plan and/or sectoral programmes; 
• assistance with project design for regular programming processes such as World Bank 
Consultative Groups and UNDP Round Table meetings; 
• Independent implementation of small projects identified in DTIS Action Matrices. 
  For the larger implementation activities as identified in the Action Matrix, such as 
infrastructure, support should be sought from mechan isms outside of the IF Trust Fund for example 
through World Bank Consultative Groups and UNDP Round Tables.  One of the objectives of the IF 
is to help leverage these resources and to ensure coherence.  Information on other resources for the 
implementation of activities outlined in action matrices should be included in IF reporting. 
 1.3 Country Coverage 
 
 The IF is for LDCs.   2. In-country Management and Operations  
 The IF needs to be better aligned, integrated and sequenced with the PRSP and similar 
national development plans as well as with Trade Policy and Private Sector Development programmes.  The aim should be to harmoni se around one common approach for the economic 
sectors, to be determined in country as appropriate .  While it is imperative that LDCs mainstream 
trade into development planning, the donors and agenci es also need to do better at integrating trade 
into their planning and programming. 
 
 While the IF recipient countries have a dive rsity of in-country governance and management 
structures, some best practices have been identifie d.  The IF should build on and strengthen existing 
structures that have been identified as working b est, including those identified in the IF Simulation 
workshop held in Addis Ababa in September 2005. 
 
2.1 Institutional Mechanisms   To provide senior level engagement and coordi nation, and to provide political commitment, a 
high level inter-ministerial committee should be estab lished.  This should be led at the Ministerial 
level and be coordinated by the by the Ministry of Trade, Finance, Planning or any other Ministry as 
best determined by each country.  The close collaboration of the Ministries of Trade, Planning and 
Finance is critical.   To support the development of the DTIS and implementation of the action matrices a 
broad-based stakeholder process including government , private sector and civil society representation 
should be established. 
  To improve the implementation of the IF, the IF Focal Point should be strengthened including 
through the creation of a national implementation unit where necessary.  The Focal Point, who is 
appointed by the national authorities, is responsib le for coordinating in country IF activities in 
consultation with the IF Secretariat.  The IF will provide resources as appropriate to strengthen this 
capacity, including the provision of secretariat reso urces (human and physical), preferably through 
engagement of local expertise.  Th is unit could be set within an a ppropriate government department or 
set outside normal government structures, as per specific country requirements.  The Focal Point should report to the inter-ministerial committee as part of the development planning process. 
 
 To provide an effective response and avoid du plication, the agencies, donors and beneficiaries 
need to work together through local processes.  To this end it is vital that an effective local donor  WT/IFSC/W/15 
 Page 15 
 
 
  facilitator, with clear terms of reference adapted to  the local situation, be appointed by donors in 
consultation with the local authorities.  The main  objective of the donor facilitator is to help 
mainstream trade into donor programming to ensu re timely implementation of the action matrices. 
  The IF agencies have a critical role to play at  the country level in the mainstreaming of trade 
into development.  The role each agency play s in the IF programme in each country will be 
determined through a dialogue among the agencies, local development authorities, the IF Focal Point 
and the IF Secretariat.  Key elements of their ro le include participation in the diagnostic process, 
implementation, local fund management, and m onitoring and evaluation.  To facilitate the 
involvement of agencies at the country level, a pr ogramme approach should be adopted. In order to 
fully play their role, Agencies should make the requi red trade and development expertise available to 
the local level and, to support this, to reinforce th eir core capacity in the trade and development area. 
 2.2  The DTIS Process  
 It is important that the recipient country itself take the lead in the preparation and/or updating 
of its DTIS, including selecting in consultation with the IF Secretariat the executing entity.  The DTIS team should include local expertise and should work closely with the national PRSP team.  
  To facilitate consistency, information shar ing and implementation, a global template for 
undertaking the DTIS should be developed to guide  the process.  The ultimate quality control of the 
DTIS would rest with the recipient country supported by the executing entity.  The DTIS should be a 
living document, sequenced and sy nchronized with the national deve lopment planning process such as 
the PRSP;  possibly through the creation of a natio nal trade plan.  The Focal Point should take the 
lead for updating the DTIS and for integrating it into the national development plan.  All six of the IF 
agencies have valuable contributions to make to th e DTIS process.  Normally all six agencies would 
have a role from the start of the process. 
 2.3  Linkages Between the LDC Capitals and Geneva   The IF in country process should be driven from the countries rather than from Geneva.  
 
 The Focal Point should actively develop strong  linkages with the IF Secretariat, and an 
ongoing process of information sharing between the Focal Point and the IF Secretariat should be maintained.   The IF should be an umbrella for other na tional and regional trade capacity initiatives. 
 
2.4  Role of the IF Agencies   The Agencies will continue to play an activ e role in the implementation of the IF.  As 
described above, each country, in consultation with th e IF Secretariat, would decide which agencies or 
organizations are best suited to carry forward IF activities, building on their comparative advantages 
and mandates.  The participation of the IF agenci es in projects and programmes should be on a fully 
costed basis.   3. Governance, Overall Management and Administration  
 The Task Force recognizes that the effectiveness of the IF is hindered by the existing 
fragmented management structure and sub-optimal  division of responsibilities among the different 
agencies, principally among the WTO (Secretaria t), the World Bank (diagnostics) and the UNDP 
(Trust Fund), and by a lack of a clear accountability framework.   WT/IFSC/W/15 
Page 16  
 
   The Task Force does not propose to create a new organization.  The main aim of the proposed 
approach is to transfer responsibility to the c ountry level while conso lidating management and 
administration.  In order to build on the strengths of the existing structures as much as possible, the Task Force recommends a modified management and governance structure by proposing to keep the IF Steering Committee as the overall governing body , to transform the IFWG into a Board with 
greater recipient and donor participation, and to turn  the Secretariat into an Executive Secretariat with 
a Chief Executive Officer.  The IF would continue to rely on the agencies in achieving its mandate. 
 3.1 Steering Committee  
 The Steering Committee, based on the existing IF Steering Committee, should provide overall 
policy direction, review progress and provide a platform for the exchange of experience.  It should meet at least once per year.   3.2 Board 
 
 Reporting to the Steering Committee would be a Bo ard.  This Board, based on the current IF 
Working Group, should remain small but be rebalan ced.  It should continue to include representatives 
of the recipients, the donors and the agencies.  The Board should meet as regularly as necessary to 
conduct its business, to provide oversight and policy direction, and to decide programme criteria and 
allocative criteria. 
 
3.3 Secretariat   The Secretariat needs to integrate manageme nt functions at the global level to improve 
delivery (efficiency and effectiveness) and provide fo r greater accountability.  Accordingly, it should 
become an Executive Secretariat w ith a Chief Executive Officer acc ountable to the Board.  The CEO 
would be selected by the Board.   The Task Force recommends that the IF Secret ariat be a small, independent unit located in 
Geneva and that it be administratively housed in the WTO Secretariat, with a strong firewall around 
it.  
 
 The IF Secretariat would:  
• service the governing bodies; 
• propose to the Board an annual work progr amme and budget including allocations for 
staffing; 
• propose to the Board programme and allocation criteria; 
• prepare annual substantiv e and financial reports; 
• coordinate support to countries; 
• undertake financial management, including management of the Trust Fund; 
• identify new sources of funds; 
• maintain close links with th e national implementation units; 
• maintain close links with the implementing agencies; 
• provide outreach to stakeholders; 
• share best practice including through a website; 
• oversee monitoring and evaluation; 
• undertake other responsibilities to be delegated by the Board; 
• develop strategies to include the priv ate sector in the work of the IF. 
  WT/IFSC/W/15 
 Page 17 
 
 
   While recognizing that the Board and CEO s hould determine the new staffing structures for 
the IF Secretariat, the Task Force recommends that  the CEO be recruited on merit by the Board and 
report directly to the Board.  Staff will also be r ecruited on merit.  Staff appointed to the existing IF 
Programme Implementation Unit should be inte grated into the Executive Secretariat. 
 
3.4 Local Governance 
  Consistent with Section 3 above, the Focal Po int should be responsible for IF implementation 
at the national level.   
4. Monitoring and Evaluation 
  Currently there is no adequate single monitori ng and evaluation framework for the IF, making 
it difficult to measure results.   
• An effective monitoring and evaluation system needs to be developed and implemented at 
both global and national levels on a priority basis; 
• To encourage sharing of experience, the Steer ing Committee should showcase at each of its 
sessions the in-country experience of some IF members; 
• Links should be maintained with the OECD to benefit from the WTO/OECD/DAC database 
on trade related assistance; 
• An independent auditor should be appointed. 
 5. Funding 
 
 The Task Force recommends that there should be greater predictability of funding for the 
recipients as well as greater levels of funding, including identification of new sources of funds. 
 5.1 Level of Funding 
 
 At its Annual Meeting in 2005 the WB/IMF  Development Committee took note of an 
estimate from staff that an amount of US$200-400 million over five years would be required, based on anticipated requirements for 40 countries.  An  exercise based on the above recommendations has 
been undertaken to provide an indicative costing for the enhanced IF (see Annex). 
 
 The CEO, once appointed, should thereafter prepare a three-year rolling workplan and budget which would be subject to approval by the Board.  5.2  Donor Commitments and Supply of Funding  
 Predictability of funding is important.  Donor s should make multi-year indicative pledges 
over a three to five year period where possible, even though actual commitments/obligations may be 
on an annual basis.  There should be multilateral and bilateral funding.  Earmarking of funds is 
generally not desirable, although there could be  some flexibility in the way donors fund certain 
aspects of the IF. 
 
5.3 Sources of Funding   New donors should be identified a nd invited to participate, including from the private sector, 
at both national and international levels.  WT/IFSC/W/15 
Page 18  
 
  5.4 Allocation of Resources 
  Tier 1 funding for core activities should be pr edictable.  Disbursement should be decided by 
the Focal Point in consultation with the IF Secretariat.  
 Tier 2 funding will be based on requests submitted by the Focal Point to the IF Secretariat. 
 6. Transitional Arrangements   The Task Force makes these recommendations understanding that some areas require further 
elaboration.  The Task Force further recognizes that it will be important to ensure the continuity of 
ongoing and planned IF activities during the transition period.  WT/IFSC/W/15 
 Page 19 
 
 
  Annex  
Recommendations of the Task Force on an enhanced Integrated Framework  
 
Indicative Costing for the Enhanced IF  
 
 
 This draft costing is based on the participa tion of 40 LDCs and covers an initial five year 
period.  The indicative costing in total comes to  about US$400 Million and is comprised of three 
elements:  
• Tier 1: Core function support costs ($77 million) 
• Tier 2: Action Matrix implementation support costs ($320 million) 
• Executive Secretariat costs ($14 million) 
  It is recognized that all countries are at diffe rent starting points and will have different 
requirements.  Thus the costings per country as well as the total costing should be treated as 
indicative.  Work programmes will need to be ta ilored accordingly.  For example, it will not be 
necessary to undertake pre-DTIS activities in c ountries which have already completed a DTIS. 
  Activities will be funded through a multilatera l trust fund and by bilateral cooperation. 
 Tier 1:  Core Function Support Costs
 
 
 A total costing of $77 million is proposed for Tier 1 – providing core function support to the 
participating LDCs.  Tier 1 will include a number of support measures.  The work programme in each 
country would vary according to its situation.  
• Pre-DTIS support will be provided to 20 LDCs not yet participating in the IF; 
• Provision is made for undertaking the DTIS  in 20 LDCs, based on the current budgeted 
amount for undertaking a DTIS; 
• Support to the national Focal Point could include pa rtial coverage of staff costs, costs of local 
experts, a portion of local running costs and equipment such as computers and related accessories.  Provision is also made for short term inputs such as sectoral studies and cost-
benefit analyses.  The government will be expected to provide office accommodation and 
other related costs; 
• The DTIS will need to be updated from time to time.  It is assumed that this will be done 
twice over the five year period. 
  
 Per LDC No. of LDCs Total Cost 
 $ No. $  $ 
Pre-DTIS support 50,000 1 50,000 20 1,000,000
DTIS 400,000 1 400,000 20 8,000,000
Support to Focal Point 300,000 5 1,500,000 40 60,000,000
DTIS updates 100,000 2 200,000 40 8,000,000
Total   77,000,000
 
  The IF multilateral trust fund will meet the co sts associated with Tier  1 activities where these 
are not covered by bilateral cooperation. 
 WT/IFSC/W/15 
Page 20  
 
  Tier 2: Support to Implementation of Action Matrices
 
  Based on estimates made by one of the implementing agencies, an indicative amount of $12 million per country over a five year period is iden tified to support implementation in four or five 
priority areas of the action matrix.  These costs include bridging funding to jump start activities in the 
DTIS such as project preparation, feasibility stud ies as well as funding of smaller projects including 
seed projects and some infrastructure developmen t projects.  Larger implementation activities 
identified in the DTIS would be funded outside of th e IF.  It is assumed that there will be divergences 
in the sequencing of implementation.  The assumption used is that one third of the countries will be 
able to start implementation right away, one third w ill be able to implement two thirds of the priory 
areas over five years, with the remaining countries implementing one third over five years.  This gives 
an average of $8 million per country, making a total of $320 million in total for Tier 2.  
 Cost Per LDC No. of LDCs Total Cost 
Priority areas from Action Matrix $8,000,000 40 $320,000,000
 
  It is anticipated that at least one half of th e costs associated with Tier 2 activities will be met 
through the IF multilateral trust fund. The rema inder will be met throug h bilateral cooperation 
reported to the IF on an annual basis.  
Executive Secretariat
 
  The costing for the Executive Secretariat is  proposed at $14 million, based on the following 
assumptions:  
• Seven professional staff employed in Geneva. 
• The professional staff will be supported by th ree locally engaged administrative staff. 
• Office running costs include rent, utilities, stationary and other consumables. 
• Thirty foreign trips are made by the professional staff in total each year. 
• While the task force did not make specific recommendations on evaluation an indicative 
figure is included. 
• A figure is included to cover costs related to  workshops and other networking and outreach 
activities 
 
 
 $ Qty Years Total 
Professional staff 250,000 7 5 8,750,000
Office support staff 100,000 3 5 1,500,000
Office running costs 200,000 1 5 1,000,000
Travel 5,000 30 5 750,000
Evaluation 200,000 1 5 1,000,000
Networking and outreach  200,000 1 5 1,000,000
Total   14,000,000
 
 
 The costs of the Executive Secretariat will be met by the IF multilateral trust fund. 
 Funding Approach
 
  The enhanced IF will be funde d through a combination of cont ributions to a Multilateral Fund 
and through bilateral contributions  consistent with the goals of the enhanced IF.  A number of  WT/IFSC/W/15 
 Page 21 
 
 
  countries have already announced their intention to  contribute resources on a multiyear basis either to 
the Multilateral Fund or bilaterally.  In order for the enhanced IF to enter into force it will be 
necessary for a critical mass of res ources to be pledged to it, this will necessitate a formal pledging 
process.  The Task Force encourag es all current donors to the IF to make contributions to the 
multilateral trust fund and ur ges other donors to do so. 
 
  
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