WORLD TRADE  
ORGANIZATION  WT/AFT/W/9 
11 May 2006 
 
 (06-2310) 
Aid for Trade Task Force Original:   English 
  
 
COMMUNICATION FROM THE UNITED NATIONS  
INDUSTRIAL DEVELOPMENT ORGANIZATION 
  
 The following communication, dated 3 May 2006, is being circulated to the Aid for Trade Task Force at the request of the United Nations Industrial Development Organization (UNIDO).   
 
_______________ 
 
 
RESPONSES TO WTO TASK FORCE ON AID FOR TRADE 
 
 
I. INTRODUCTION 
1. The importance of trade to development, growth  and poverty alleviation in the developing 
countries is undisputed.  It is also widely accepted that the developing countries do not just need 
lower tariffs if they are to derive tangible be nefits from the emerging rules-based global trading 
system;  they need vastly improved capacities to produce and trade better quality products.  Trade can 
have high returns in terms of increasing growth, re ducing poverty and facilitating the realization of 
ambitious global trade reforms.1  Concepts such as "aid for trade" and "trading your way out of 
poverty" re-emphasize these points.   
2. The Doha Declaration confirmed that "technical cooperation and capacity building are core 
elements of the development dimension of the multilateral trading system" and recognized that 
"sustainable financed technical assistance and capaci ty building have important roles to play".  Within 
that context, this paper addresses a number of specif ic issues that have been raised in the WTO Aid 
for Trade Task Force through answ ers to the questions posed.   
II. WHAT IS THE CURRENT SCOPE AND CONTENT OF YOUR AID FOR TRADE 
PROGRAMMES?  WHAT ARE THE LESSONS LEARNED? 
A. CURRENT SCOPE AND CONTENT OF THE UNIDO  TRADE CAPACITY BUILDING PROGRAMME  
3. In both the Plan of Action adopted at the LDC III Conference in 2001 and the market access 
initiative launched in the New Partnership for A frica's Development (NEPAD), it is recognized that 
gainful trade participation relies on:   
(a) Supply Capacity:  Effective industrial productiv e capacity needed to ensure optimization of 
production and product diversification. 
 
                                                      
1 The share of aid for trade in tota l aid commitments increased from 3.6 per cent in 2002 to 4.2 per cent 
in 2003, WTO and OECD (2004) cited in World Ba nk/IMF Development Committee, Global Monitoring 
Report 2005. WT/AFT/W/9 
Page 2  
 
  (b) Conformity:  Ability to comply with inte rnational standards needed to exploit the 
opportunities offered by the liberalized global trading system. 
 (c) Fairness:  Equitable integration into the multilateral trading system 
 
4. If the developing countries are to succeed in  enhancing their export potential and increasing 
their share in global manufacturing value-added2 at a time when manufactures account for 75 per cent 
of global trade, their enterprises need to be able to produce according to client country standards and 
technical regulations, and their products must prev ail in highly competitive markets.  They need to 
focus on sub-sectors with high export potential such as agro-industries, including the production of 
organic products.  The developing countries need to  achieve higher levels of productivity through the 
use of modern management techniques and exploit economies of scale, while applying new technologies that reduce the pollutant intensity of the manufacturing sector.  In the ultimate analysis, 
supply has to be capable of meeting both market demand and product standards.   
5. The strategic approach to trade capacity bu ilding adopted by UNIDO is geared to securing a 
considerable increase in developing-country exports through three discrete actions:   
• Developing competitive manufacturing capability; 
• Developing and promoting conform ity with market requirements; 
• Enhancing connectivity to markets. 
 
 
 
  
 
  
 
  
 
  
 
 
 
  
 
  
6. Competitiveness:  Activities under this heading are orie nted towards strengthening capacities 
to produce competitive goods, in particular by first identifying those goods with the greatest 
competitive potential and removing supply-side cons traints.  The services focus on small- and 
medium-sized enterprises (SMEs) and include the pr omotion of export cluste rs and consortia, along 
with the provision of process technology and enhanc ing capacity to meet international standards, 
client requirements and e nvironmental regulations. 
                                                      
2 According to the most recent estimates, the deve loping countries (including China) accounted for a 
23.9 per cent share in world total MVA (at current pric es) in 2002.  International Yearbook of Industrial 
statistics 2006, UNIDO, p. 34, Table 1.1. Connect to 
the MarketProducts to Market
Develop
Competitive 
Manufacturing
CapabilityProve Conformity 
with Market 
Requirements
Compete Conform Connect WT/AFT/W/9 
 Page 3 
 
 
  7. Conformity:   Activities under this heading are oriented towards upgrading the conformity 
assessment infrastructure, improving the capacity of domestic laboratories and establishing adequate testing capacity so as to promote conformity with market requirements and secure a larger share in 
export markets.  
8. Connectivity:   Activities under this heading are orie nted towards enhancing linkage with 
markets in industrialized countries as well as in a nd between developing countries.  These activities 
fall more within the scope of other agencies, primarily WTO and ITC.   
9. Consistent with this analysis, UNIDO's Tr ade Capacity Building programme was launched 
during the 2002 Finance for Development Summit, t ogether with the Europ ean Commission.  It 
focuses on (i) helping countries to establish the techni cal infrastructure needed to enable conformity 
with international requirements;  and (ii) suppor t selected high potential export sectors to achieve 
competitiveness and increase exportable production.  Therefore the UNIDO trade capacity building 
programme fully meets the concern of Aid for Trad e.  It joins forces with other international 
organizations and agencies, as well as bilateral ag encies and professional institutions, especially in 
areas complementary to UNIDO's own activities.   
10. As part of the programme, UNIDO has ente red into cooperation agreements with:  
(a) specialist organizations active at the global level in the area of standards, metrology and 
accreditation such as:  the International Standards Organization (ISO), the "Bureau 
International des Poids et Mesures" (BIPM) and the "Organisation Internationale des Poids et 
Mesures" (OIML), and the International Laborat ory Accreditation Committee;  etc.  This is 
aimed at making available the services of these organizations also to developing countries.   
 
(b) Other intergovernmental organizations, incl uding but not limited to WTO, ITC, UNCTAD, 
FAO and WHO.  The basic objective throughout is  to increase efficiency  and effectiveness, 
and ensuring comprehensive support to member st ates while keeping w ithin the boundaries of 
agency mandates.  This creates synergies in the delivery of assistance across a broad spectrum 
and reduces the risk of duplication.  The UNIDO/WTO trade capacity building initiative in 
nine pilot countries (launched in 2004 and since extended to eleven) and the joint UNIDO/WTO development programme for cotton are cases in point. 
 
11. UNIDO is currently the largest provider of trade-related technical assistance among the 
multilateral agencies.
3  However, the current volume of its capacity building activities is certainly 
inadequate to deal with the urgent requirements of developing countries.   
12. A number of examples of UNIDO's project activities are given in the Annex to this document.  
The best example of our approach is given by a pr oject recently started in Bangladesh (funded by the 
European Commission), at the same time establishing/strengthening the technical support infrastructure related to standards, metrology and conformity testing and working with the 
textile/garment and shrimp export sectors, the tw o main export sectors, to improve competitiveness 
and increase exports.   
B. L
ESSONS LEARNT  
13. UNIDO has learnt that a comprehensive appr oach to the trade-related requirements of 
developing countries is the only way to ensure th at they can increase their participation in 
international trade, and thereby realize the consid erable potential contribution export trade can make 
                                                      
3 Joint WTO/OECD Report on Trade-Related Tech nical Assistance and Cap acity Building, December 
2005. WT/AFT/W/9 
Page 4  
 
  to balanced and sustainable development and the a lleviation of poverty.  Ensuring that markets are 
open is not sufficient.  There is, however, still a co nsiderable need to explain the importance of the 
technical infrastructure related to quality, metrol ogy and conformity tes ting of products as many 
actors in both developing countries as well as donor  countries do not understand or appreciate these 
highly specialized functions (although clearly recognized in the TBT and SPS agreements). 
14. UNIDO has also learned that strengthening a c ountry's capacity to deal with international 
standards has also major benefits for the domest ic markets and consumers through improved food 
safety, the capability to test imported products such as pharmaceuticals, improved reliability of medical and other equipment, etc.   
15. Thirdly, it has become even clearer that the penetration of regional and global markets is 
essentially a joint venture between the public and pr ivate sectors.  Although enterprises rather than 
governments are the major drivers of the growth of export trade, governments have a critical role to 
play.   
III. ARE THERE, IN YOUR VIEW, OUTSTANDING IMPORTANT TRADE-RELATED 
ASPECTS THAT ARE NOT MET TODAY? 
16. At present, despite initiatives such as the "duty-free/quota-free" provisions contained in the 
African Growth and Opportunity Act (AGOA) in the United States and Everything but Arms (EBA) 
in the European Union, developing countries are not enjoying the gains they expected from the 
liberalized trade regime for want of adequate suppl y and conformity capacities.  This is particularly 
apparent in one area where they could have been ex pected to secure immediat e benefits:  agro-food.  
It is the area facing the most stringent standards and conformity requirements. 
17. Furthermore, aid for trade endeavours as ex emplified by the Integrated Framework for 
Technical Assistance to the Least-Developed Countries drawn up after the WTO Ministerial Conference in December 1996 and subsequently reva mped have tended to focus almost exclusively 
on trade-related policies and cross-border facilitati on.  Even though the Integrated Framework was 
intended to address all issues related to supply cap acity including standards, testing, quality and 
conformity, the subsequent focus has been on such aspects as customs procedures, physical 
infrastructure, special treatment for the least-dev eloped countries, access to finance and governance.  
The net result has been that the benefits accruing to the least-developed countries have been relatively 
limited.  The problem is undoubtedly attributable  to shortcomings in the supply of competitive 
tradable goods or products.  As the World Bank concluded
4, despite the undisputable importance of 
trade liberalization, its success will remain limited unless supply-side and conformity issues such as 
TBT/SPS and Standards Metrology, Testing and Qu ality (SMTQ) capacity development, which are 
essential to the developing countries' effective particip ation in global trade, are properly addressed.   
18. From the standpoint of UNIDO, attention should be paid to delivering technical assistance 
relating to increasing supply capacity and overcomi ng technical barriers to trade arising out of 
standards and conformity assessment requirements.  "Aid for Trade" should encompass the removal 
of supply-side constraints and the development of  systems to promote conformity with market 
requirements (both technical and regulatory), thus securing for the developing countries a larger share 
in export markets, creating jobs  and alleviating poverty.  
                                                      
4 World Bank, Assessing World Bank Support for Trade 1987-2004: an IEG Evaluation, 2006.  WT/AFT/W/9 
 Page 5 
 
 
  IV. HAS TRADE AS A VEHICLE TO PR OMOTE GROWTH, DEVELOPMENT AND 
POVERTY REDUCTION, BEEN ADEQUA TELY ADDRESSED IN COUNTRIES' 
NATIONAL DEVELOPMENT PLANS AND POVERTY REDUCTION STRATEGIES?  IF NOT, WHAT ARE THE MAIN REASONS FOR THIS AND HOW 
COULD THIS BE CORRECTED? 
19. Initially virtually all PRSPs ignored the productive sectors and by implication trade in their 
analysis of poverty reduction strategies, focussi ng instead on health, education and other social 
aspects of development.  Similarly many Unite d Nations Development Assistant Frameworks 
(UNDAFs) neglect the potential contribution of the productive sectors and related trade to development.  National development plans in genera l have had a more balanced approach.  Recently 
also international programme frameworks like NEPAD have identified the productive capacity and 
trade capacity building as vital strategies in supporting the development of Africa.  External assistance 
and donor policies are, with some exceptions, s till in practice neglecting these aspects.  One reason 
may be that, for many bilateral donors, assistance to  the productive (and private) sectors is not easy to 
defend, and many have limite d experience or take the view that the private sector should take care of 
this.  This attitude however ignores the important roles that the public sector should play in trade 
capacity building and in enabling the private sect or to increase production and exports, overcoming 
many of the serious obstacles encountered today.   
V. HOW, IN YOUR VIEW, SHOULD TRADE-RELATED NEEDS AND PRIORITIES 
BE IDENTIFIED? 
20. In its programme launched at the Finance fo r Development Conference UNIDO has identified 
the key elements of technical infrastructure that needs to be functioning in each country and be 
available to potential exporters (even if some of th ese could be shared between countries).  In his 
recent book "Fair Trade for all", Joseph Stig litz quotes these requirements (page 212):   
• A national/regional standards/standardization body
:  Standards are essential for production 
and trade, but also for consumer protection.  To ensure international (and national) standards 
are set in a balanced manner, developing countri es need to participate in the development of 
such standards;  
• A national/regional metrology system :  A system that ensures that the measurements and tests 
required for all production, quality and certifi cation activities are consistent and correct; 
• A certification/conformity assessment system :  A system including internationally-recognized 
testing facilities that are able to test  products and certif y that products and 
management/production processes comply with applicable requirements and standards; 
• An accreditation system :  A system which evaluates calibration and testing laboratories and 
other bodies involved in certification of products, systems and processes, with a view to 
ensuring that testing facilities and methodologi es, and thereby the certification activities, 
satisfy international standards and are recognized.   
 
21. These systems are also required in order for countries to comply with their commitments 
under the Uruguay Round agreements.  Evidently th ese requirements are additional to the physical 
(transport) infrastructure needed for exporters, streamlined trade documentation systems etc.   
22. In addition to these requirements largely in the domain of "public goods", i.e. best provided, 
at least initially, by the government, there are a number of other trade-related services and measures 
that could facilitate the performance of the pro ducers and potential exporters, and that currently 
largely do not exist or do not function well in mo st developing countries.  This includes business-
development services, upgrading assistance to enterpri ses, marketing and market information, support 
to find marketing technology or investment partners etc.   WT/AFT/W/9 
Page 6  
 
  23. In our view, for at least the first category, sy stematic surveys should be carried out at the 
country and sub-regional level, to identify existing facilities and their effectiveness, and on this basis, 
draw up an overview of required assistance.  In our  view, it could be useful  to identify and initially 
focus on two or three main export sectors where payb ack in terms of increased exports can expect to 
be fastest.  UNIDO is currently carrying out an initial survey of the technical infrastructure as 
explained above in the Africa region, and will be read y to share the results later this year.  Similar 
surveys should cover the situation of, and requi rements for assistance in the other "public good" 
requirements.   
VI. IS THE EXISTING SYSTEM OF DELIVERY MECHANISMS FOR AID FOR 
TRADE ADEQUATE?  IF NOT, WHERE ARE THE GAPS, AND WHAT OPTIONS 
MIGHT EXIST TO ADDRESS THOSE GAPS? 
24. Existing mechanisms for Aid for Trade have largely focused on the issue of access to 
markets;  physical infrastructure needed to trans port products to market;  streamlining trade policies 
and simplifying/reducing trade-rela ted taxes and bureaucracy, improvi ng trade documentation and, to 
a limited extent, trade-related information.  Th ese are evidently essential areas for Aid for Trade.  
However, until now, very limited attention has been paid to two areas critical for realizing increased 
(export) trade from developing countries:  the capacity to produce and the ability to ensure 
compliance of products with market requirements.   
25. As Secretary-General Kofi Annan observed five  years ago:  "The LD Cs have neither the 
surplus of exportable products nor the production cap acity to take immediate advantage of new trade 
opportunities.  They will need substantial investment  and technical assistance in order to expand their 
production".  Very little has changed (except probab ly temporarily for exporters of selected raw 
materials and commodities).   
26. The importance of the technical infrastructure is borne out by the findings of the International 
Development Research Centre in Canada who foun d that countries that cannot meet standards and 
regulations in developed-country markets are effect ively barred from trading with those markets.  It 
went on to say that the least-developed countries had to  learn to deal effectively with impediments to 
trade that were not related to duties or quotas.   
27. It is all the more surprizing th at until now "Aid for Trade" has not systematically covered this 
area as the Uruguay Round agreements very explicitly  promised such assistance.  Article 12.7 of the 
TBT agreement specifically states:  "Members shall … provide technical assistance to developing country Members to ensure that the preparation and application of technical regulations, standards and 
conformity assessment procedures do not create unnecessary obstacles to the expansion and 
diversification of exports from developing country Members".  A special reference to the LDCs even 
strengthens this point.  Similarly, Article 9 of the SPS Agreement states that:  "Members agree to 
facilitate the provision of technical assistance to other members, especially developing country 
Members, either bilaterally or through the appropr iate international organizations.  Such assistance 
may be, inter alia, in the areas of processing technologies, rese arch and infrastructure, including in the 
establishment of national regulatory bodies, and may take the form of advice, credits, donations and 
grants, including for the purpose of seeking technical  expertise, training and equipment to allow such 
countries to adjust to, and comply with, sanitary or phytosanitary measures necessary to achieve the 
appropriate level of sanitary or phytosanita ry protection in their export market".  
28. Currently some individual donors and development organizations have taken up the challenge 
and, through individual projects, supported a numbe r of countries or regional organizations with 
selected parts of the requirements.  A multi-donor fund focused on these requirements could certainly 
speed up the establishment of key facilities and reduce the overall costs.    WT/AFT/W/9 
 Page 7 
 
 
  VII. IS THERE A NEED FOR STRENGTHENING MONITORING AND EVALUATION? 
IF YES, HOW CAN THIS BE DONE? 
29. Currently the normal monitoring and evaluation procedures are followed by the organizations 
involved.  In general these are satisfactory.  UNIDO is working closely with both donors and 
recipients on the main projects it has under implemen tation.  However, overall it could be worthwhile 
to evaluate existing programmes at the country leve l in terms of impact, i.e. in terms of actual 
increases in exports realized and th e link with the interventions.  
VIII.  WHAT SHOULD BE THE ROLE OF THE PRIVATE SECTOR IN IDENTIFYING 
NEEDS AND IN IMPLEMENTING RESPONSES? 
30. As private sector actors are the key (potential) e xporters, it is essential that they are involved 
in identifying the key obstacles, critical requireme nts as well as key potential export sectors.  As they 
are also the future user s of the "public goods" outlined above they  should be involved in defining the 
best way of locating and running the services, several of which should be run on a cost recovery basis, 
and some could eventually even be run on a comme rcial basis by private sector enterprises (e.g., 
metrology and calibration services).   
31. Also in terms of the strengthening of productio n capacities it is the private sector that should 
realize the investments needed, find partners and access the markets.  Business development and the 
different support services should be defined in clo se consultation, and where possible hosted and run 
by the private sector (e.g., through Chambers or similar structures). 
32. One potentially powerful mechanism to enable  small- and medium-sized enterprises to 
participate in international trade is the formation of  clusters or export consor tia.  Consortia also help 
their members to move fro m simply supplying products to customers to a true export strategy where 
domestic marketing activities can be extended and technical specifications and/or prices are not 
simply prescribed by clients.  By joining forces,  a consortium can also boost its bargaining power and 
can even develop its own distribution channels, t hus improving the profitability of the members' 
export operations.   
IX. HOW SHOULD AID FOR TRADE REINFORCE THE PRINCIPLES OF AID 
EFFECTIVENESS AND COHERENCE, AS AGREED IN THE PARIS DECLARATION AND AS EMBODIED IN INDIVIDUAL POVERTY REDUCTION STRATEGIES? 
33. Coherence in trade-related aid projects is in principle addressed by the Integrated Framework 
(although this is currently limited to the least-devel oped countries), which is intended to ensure that 
aid for trade corresponds to country priorities and focuses on poverty reduction.  The diagnostic 
studies conducted within the context of the Integrat ed Framework are valuable tools for promoting 
coherence.  On the condition that (i) the coverage  is extended to include all developing countries;  
(ii) the government and other country level actors take  a lead role in defining the requirements;  and 
(iii) the issues of building up the productive capacity  and technical infrastructure as specified in the 
Uruguay Round agreements are included, aid coheren ce at the country level could be assured using 
this mechanism.   
34. Strong support to inter-agency programmes, that effectively integrate the complementary 
expertise and mandates of different actors as define d before, could greatly reinforce the effectiveness 
of Aid for Trade.  The current joint WTO/UNI DO programmes are a possible example of such 
initiatives. WT/AFT/W/9 
Page 8  
 
  X. ARE THERE OTHER IMPORTANT GAPS IN THE DELIVERY OF AID FOR 
TRADE? 
35. Much of the debate on trade-related assistan ce has centred on "preference erosion", special 
and differential treatment and concessionary market  entry mechanisms.  Added to that are the 
elaborate estimates that have been made of the potential benefits accruing to the developing countries 
in the wake of the Doha Round and other initiatives.  In distinct contrast, little has been done to assess 
the saleability of developing-country products or the challenges those products face in terms of 
compliance and conformity. 
36. As already pointed out, for all the importance of addressing the cross-border transactions 
related to trade, development of that particular in frastructure is of limited benefit, unless the country 
has proven supply capacity and its products demonstrable market compliance. 
37. The large number of international standards al one is a significant problem for developing 
countries.  That problem has been compounded by the introduction of a large number of increasingly 
stringent standards and regulations in the food sector .  Not only is there closer scrutiny of production 
and processing techniques, but also stricter trac eability and labelling requirements across the food 
supply chain.  For example, the new EU rules on food hygiene require all food businesses after the 
primary production stage to put in place, impl ement and sustain a procedure based on Hazard 
Analysis and Critical Control Points (HACCP) prin ciples.  In 2004, exports valued at $1.75 billion 
were disrupted as they failed to comply with SPS, yet donors contribut ed only $53 million to 
measures to overcome those problems.
5   
38. Retailers in developed economies are constantly  introducing private product specifications in 
addition to international standards and regulations.  For example, in food safety, private standards and 
protocols are comparatively more stringent and more  effectively enforced than generic international 
standards and protocols.6  Such standards, which de facto  represent market entry conditions, are in 
addition to the Agreements on TBT and SPS.  They are not publicly announced nor are they easily 
accessible;  they vary markedly from market to ma rket.  Furthermore, despite the framework set by 
the SPS Agreement favouring "equivalence" of measur es, exporters often introduce a multiplicity of 
requirements for different markets.7   
39. In addition to product-related standards and tec hnical regulations, enterp rise-related standards 
(system standards) are rapidly spreading.  More and more international buyers ask for proof that 
internationally-recognized (certified) operational systems and procedures are in place for the control 
of food contamination (HACCP), quality mana gement (ISO 9000), environmental management 
(ISO 14000), traceability, social accountability (SA 8000), occupational hea lth and safety, and 
others.8   
                                                      
5 Standards and Agro-Food Exports from Developing Countries, Rebalancing the Debate, World Bank, 
Policy Research Working Paper 3348, 2004. 
6 For example, in the EU countries, the EUREPGAP , a consortium of major retailers, set standards for 
fruits, vegetables, beef and fish products requiring privat e certification which in almost  all instances are stricter 
than the technical regulations.  With the advent of the new ISO 22000 standard on food safety, the boundaries 
between private and public aspects of standard setting in this field are becoming even more blurred. 
7 For example, out of a total of 67 different test s applicable to compliance for different fish and 
shellfish products, FDA, EU and Japan all require different combinations and total number of tests. 
8 The most recent official data supplied by ISO show that as at December 2004, 670,399 
ISO 9001:2000 certificates had been recorded, a 35 per cent increase over the previous year and 64 per cent over 
2000.  In addition 90,569 ISO 14000 certificates had been recorded. (ISO, 2004).  WT/AFT/W/9 
 Page 9 
 
 
  40. Little has been done on assessing the costs of comp liance.  UNIDO has estimated that in the 
case of shrimp exports to the EU, for example, th e costs of EU-related testing and compliance adds 
2.8 per cent to the product cost.  Meeting quality an d safety requirements set by retailers adds another 
5 per cent, while the cost implications in te rms of improving or establishing the institutional 
infrastructure (standards, metrology, testing, certific ation and accreditation) in individual developing 
countries range from $5-20 million depending on the export sector.  Analysis of such issues 
constitutes a public good that is essential to  the manufacturing sector's ability to introduce 
improvements in terms of product quality and compliance.   WT/AFT/W/9 
Page 10  
 
  ANNEX 
 
Examples of Typical UNIDO Interventions Covering Supply Capacity & Conformity
 
 
 
 
I. INSTITUTIONAL INFRASTRUCTURE IN WEST AFRICA (UEMOA) 
1. UNIDO is currently assisting the eight member states of the West African Economic and 
Monetary Union [Benin, Burkina Faso, Côte d'Ivoi re, Guinea Bissau, Mali, Niger, Senegal and Togo] 
in the establishment or strengthening of their trade- related institutional infrastructure.  Financed by 
the European Union, the €14 million project is aime d at promoting regional integration and greater 
participation in international a nd regional trade.  Focused on overcoming the technical barriers to 
trade, the project is geared towards establishing a regional system for accreditation and certification, 
harmonizing standards and strengthening standards bodies, as well as promoting quality and consumer 
protection.  
2. The programme's impact is reflected in:   
• Development of the fishing industry and increase in the export of fish products to the EU 
(involving more than 100,000 fishermen and their families); 
• Boost in cotton exports and increase in sales revenue (impacting on no less than 10 million 
people); 
• Increase in consumer awareness and introductio n consumer protection programmes based on 
regional legislative framework; 
• Greater participation in international trade through the establishment of accreditation systems 
and the development of standardiza tion and quality promotion activities. 
 
II. THE BANGLADESH QUALITY SUPPORT PROGRAMME 
3. Starting early this year, this programme with  a budget of approximately €8 million, funded by 
the European Commission with co-financing from Norway, started implementation.  Following 
exactly the lines of the UNIDO strategy, it includes two main components:  
• Improving competitiveness and export capabilities in  particular for the textile, garment and 
food (shrimp) sectors, two of the largest export sectors, by reducing technical barriers to trade and promoting skill developmen t and quality assurance.  
• Setting up appropriate certification and accreditati on facilities particularly in fisheries and 
agriculture sectors to meet international sanitary  and phytosanitary standards to contribute to 
the export of quality products and enhance consum er confidence in products that are safe and 
comply with good business practices. 
 
4. The programme is complemented by a parallel and complementary ITC project dealing with 
export marketing. 
III. SRI LANKAN CLOTHING INDUSTRY 
5. The clothing sector is Sri Lanka's largest e xport sector, generating sales in the order of 
$2 billion, encompassing over 800 companies and empl oying more than 300,000 workers.  Under 
threat following the abolition of the Multi-Fibre Agreement and the emergence of an increasingly 
rules-driven global trading system, the industry w as compelled to become more efficient through 
reduced costs, improved quality and rapid deliver y capability.  The industry not only had to prove  WT/AFT/W/9 
 Page 11 
 
 
  compliance and conformity with international produ ct, quality, safety and environmental standards; it 
also had to demonstrate flexibility in response to rapidly changing fashions. 
6. Following an assessment of the macro-challeng es facing the sector, UNIDO helped set up a 
training and services centre in the textiles sector.  Its testing services have proven 50 per cent cheaper 
and speedier than overseas testing services, much to  the benefit of local garment manufacturers.  
Through the improvement of its services related to conformity and compliance and the technical 
assistance it provides, the centre is now able to issu e credible test certificat es that are mandatory for 
participation in international trade.  The centre's client base covers 140 garm ent exporters as well as 
11 government institutes. The centre can almost  support itself; revenues are close to covering 
operational expenditures, thus paving the way to fina ncial and operational autarchy in the near future. 
7. The project has contributed to:   
• The establishment of a rapid response centre demonstrating the benefits of modular 
production systems; 
• Introducing training programmes in the app lication of modular production systems; 
• Training 100 middle managers in operations ma nagement, costing, marketing and quality; 
• International accreditation for the training and services centre textile testing laboratory; 
• Reduction of technical barriers to trade thr ough the activities of the accredited laboratory; 
• National certification capacity developed for ISO 14000, ISO 9000 and ISO 17025. 
 
IV. UNIDO ASSISTANCE TO THE EGYPTIAN TRACEABILITY CENTRE FOR 
AGRO-INDUSTRIAL EXPORTS (ETRACE) 
8. ETRACE aims at enhancing competitiveness, export capacity, product quality and safety.  
Serving the exporters of fresh produce, NGOs, farm  associations and public institutions, the project 
seeks to ensure that in terms of quality, saf ety and traceability, the fresh produce complies with 
international regulations on food safety including the European legislation of food safety 178/2002, 
critical for continued exports.   
9. The project provides technical and financial assistance to farms, exporters, dealers, traders 
and other operators in the agro-industrial sector  in the alignment of their systems with the 
requirements set by the importing countries.  Traceability allows importers and authorities alike to trace all the steps taken during the preparation and distribution of food products and so ensures compliance with international quality and safety sta ndards, thus improving access to export markets.  
In addition to supporting the adoption of traceab ility schemes at the enterprise level, upgrading 
technology related to traceability, quality, safety and supply-chain management and fostering 
certification and accreditation, the project provid es for the preparation of traceability manuals and 
national guides outlining legal and t echnical requirements, thus facilita ting the integration of Egyptian 
exporters in global value chains.   
10. Costing $7 million and financed under a debt-fo r-development swap agreement between the 
governments of Egypt and Italy, the project will contribute to: 
• Training at least 40 national experts in traceability who will be able to assist producers in 
their certification efforts; 
• Securing international accreditation in traceability  for at least two Egyptian certification 
bodies; 
• Support via the Financial Assistance Facility  to the adoption of traceability schemes, 
including investment in technology, certificati on and accreditation.  Such financial support is WT/AFT/W/9 
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  essential to providing producers, exporters and support institutions with the technology and 
human and technical resources they need to  comply with international regulations; 
• Linking at least one national institution to the network of the European Food Safety 
Authority , thus guaranteeing prompt sharing of information on food safety rules and 
requirements, as well as market demand; 
• In addition to the operational focus on traceab ility, integrating activities with other initiatives 
in the field of quality improvement and product labelling. 
 
V. SAVING JOBS AND LIVELIHOODS IN THE FISHING INDUSTRY – LAKE 
VICTORIA 
11. In the late 1990s more than half a million peop le on the shores of Lake Victoria were earning 
a living from fishing and processing Nile perch.  Annual export revenues in excess of $200 million 
were shared by Tanzania (51 per cent), Uganda ( 43 per cent) and Kenya (6 per cent), with additional 
ripple effects to the benefit of local suppliers.  In 1999, the EU imposed an export ban on the 
suspicion that pesticides were being used in the fishing process.  The repercussions were enormous 
and fish exports were almost halved, with concom itant job losses and revenue cuts.  Several fish 
processing factories closed down and others ope rated at less than 20 per cent capacity.   
12. UNIDO was asked to assist in designing a relia ble fish safety assurance system, as well as 
improve the industry's organizational and regulator y framework and strengthen the capacity of the 
fish inspection services and technical support instituti ons covering all stages of the supply chain.  In 
parallel with those endeavours, UNIDO assisted in  setting up the Uganda National Bureau of 
Standards (UNBS) that ultimately became the fi rst internationally-accredited laboratory in Sub-
Saharan Africa (except South Africa). 
13. The outcome of the project was:  
• A major upgrading of fish safety and quality assurance systems at all stages of the supply 
chain; 
• A lift of the EU ban on all three countries at the end of 2000; 
• Revival of some 200,000 jobs around the Lake; 
• Recovery of the EU market share; 
• Penetration of new markets such as the United States. 
 VI. UNIDO CONTRIBUTION TO UPGRADING THE INDUSTRIAL SECTOR IN 
TUNISIA 
14. Designed to overcome the numerous structural weaknesses that became apparent in the wake 
of the Uruguay Round and the association agreement to set up a free trade area with the European 
Union, the project was aimed at helping count ries increase their productivity, reduce costs and 
improve quality in order to become more compe titive, increase their market share, boost exports and 
create employment. 
15. Involving the Tunisian Agency for Industrial Promotion, the Office for Upgrading, and eight 
sectoral technical centres, the project contributed to: 
• Strengthening technical centres in three sectors:  textiles and clothing;  leather and footwear;  
and food; 
• Introduction of diagnosis and upgr ading schemes in 70 companies:  30 in the textiles and 
clothing sector;  30 in the leather and footwear sector;  and 10 in the food production sector; 
• Introduction of hazard analysis critical control points in 10 food companies;  WT/AFT/W/9 
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  • Training of 22 trainers; 
• Strengthening of nine national consultancy forms; 
• Improvement of the databases at the Office for Upgrading. 
 
VII. UNIDO SUPPORT FOR CAMELID BREEDERS IN PERU 
16. In May 2002, UNIDO initiated a project to help  camelid  (llamas and vicunas) breeders, 
artisans and small enterprises enhance their productivity and competitiveness on local and 
international markets.  The ultra-fine woolly hair  of these animals is a highly valued textile/fashion 
raw material fetching a very high price.  UNIDO established two technology innovation centres for 
camelid-fibre textiles at Puno and Huancavelica provi ding individuals and enterprises access to new 
technologies, tools and processes, as well as inform ation on best practices on production, processing, 
storing and commercialization of camelid fibres.  It also established two mobile testing and quality 
control laboratories that provide on-site quality control.  
17. The camelid breeders have since formed gr oups and share their newfound knowledge with 
other breeders as well as micro and small enterprises.  Links are also being established with partners in both industrialized and developing countries.  The next important step will be to establish a 
sustainable procedure for launching locally made products on to international markets. 
18. Since introducing the scheme: 
• 3,300 herds have undergone improvement; 
• The proportion of alpacas in total breeding programme stands at 10 per cent, with indirect 
effect on 60 per cent of all alpacas in Peru; 
• The technology transfer has been of direct benefit to 8,000 farming households; 
• The stockpiling and fibre sorting facility has increased revenues of 250 livestock breeding 
households by 40 per cent; 
• 100 producer associations in Puno and Huancavelica now dispose of exporting capabilities; 
• An exhibition under the banner of Huancavelica to  the World has yielded initial export orders. 
 
VIII.  RECOVERY OF THE ARGENTINEAN INDUSTRIAL SECTOR – A MEAT 
PRODUCTION CONSORTIUM  
19. In cooperation with two NGOs experienced in th e development of the meat sector in Santa 
Fe, UNIDO is providing assistance to a group of sm all- and medium-sized meat producers in that 
region.  Forty-eight meat producers joined the project .  It has since passed th rough the initial stage of 
setting up a consortium to upgrading the members' produc ts so that they meet the quality, productivity 
and safety requirements essential to entering foreign markets. 
20. The project has contributed to:   
• The development band implementation of a co mmon system for good quality, production, 
hygiene and safety practices; 
• Piloting a traceability system and a platform to  conform to EU Directive 178/2002, which 
lays down the principles governing food and feed in general, and food and feed safety in 
particular; 
• The creation of a scientific panel to re view traceability practices in Argentina; 
• Benchmarking with European meat producers in  terms of quality, productivity and safety; 
• Elaboration of the consortium's statutes, as well as its business and marketing plans; 
• Negotiation with potential investors and buyers in Europe. 
 WT/AFT/W/9 
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  IX. THE AFGHAN NATIONAL STANDARDS AND METROLOGY AUTHORITY 
21. Part of the World Bank Emergency Customs Modernization and Trade Facilitation project, 
the UNIDO project aims at the creation of the qua lity infrastructure as a contribution towards the 
achievement of the trade-related objectives of the larger project. 
22. It will establish, through the NCSMQ (Afgha nistan National Commission on Standards, 
Metrology and Quality), the legal and institutional framework for qua lity standardization, metrology 
and testing (including standards formulation, harmonization and dissemination, measurement and 
calibration, product quality and conformity assessme nt, testing, certification and accreditation) to 
ensure protection of both consumers and the envi ronment, as well as facilitate trade (import and 
export). 
23. Within a budget of some US$1 million, the project has contributed to the: 
• Formulation and adoption of an institutional a nd legal framework for standards, metrology, 
testing and conformity assessment in line with accepted international practice; 
• Establishment of a national standards and metr ology institute (NSMI) as a national apex body 
supporting producers and trades for both local trad e and exports with the capacity to adopt, 
adapt and elaborate and enforce standards and carry out conformity assessment systems in conformity with international practice; 
• Elaboration and approval of a national quality policy; 
• The elaboration and adoption of up to 500 Af ghan standards by the NCSMQ through task 
forces on four priority sectors; 
• Development and promotion of a nationa l product registration scheme and product 
conformity/quality mark; 
• Establishment of a basic national metrology sch eme to serve both the legal and industrial 
metrology function; 
• Launch of an Afghanistan Consumers Association as a viable market force. 
 
X. UNIDO/WTO DEVELOPMENT OF THE AFRICAN COTTON SECTOR 
24. Cotton plays a significant role in the economies of West and Central African States;  it 
involves 2 to 3 million producers and provides subsis tence to approximately 15 million people.  The 
cotton sector's contribution to the GDP of the count ries in the region ranges in average from 5 to 
9 per cent.  In Benin, Burkina Faso and Chad, it accounts for 35–40 per cent of total export earnings.  Although the contribution that cotton makes to economic  growth and poverty alleviation in the region 
could be increased, the sector is not yet ready to compete in a quota-free market despite competitive 
skilled labour costs.  A key concern expressed by Africa during the Cancún WTO Ministerial 
Conference was the plight of millions of cotton farmer s in Africa, and the challenge faced due to trade 
distorting subsidies given to cotton producers in th e rich countries.  UNIDO took up the challenge of 
assisting the cotton farmers in Africa, and enha ncing their product quality and value addition. 
25. Under the WTO/UNIDO cooperation, a joint programme has been developed to assist 
11 countries to develop their cotton textile sector.  The programme will: 
• Provide technical and managerial training to 5000 professionals and technicians; 
• Strengthen industrial supply capacity by impr oving productivity and competitiveness on the 
base of 45 pilot projects; 
• Contribute to local value-added by pr oviding appropriate process technology;  WT/AFT/W/9 
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  • Establish a cotton quality evaluation system in four sub-regional cotton technical centres and 
strengthen national quality infrastructure and services by upgrading 11 national laboratories 
specialized in cotton; 
• Develop a cotton quality database for cotton producing countries in West and Central Africa;  
• Boost the standardization of African cotton quality through the development and promotion 
of the Special African Cotton Label; 
• Encourage enterprise-level partnerships be tween national and international companies 
through regional investment forums; 
• Promote South-South cooperation through a link to low-cost Indian technology and rural 
processing methods. 
 26. With an estimated budget of €21 million,  the programme activities will result in: 
• Increased productivity of ginneries and textile enterprises by 20 to 40 per cent in the short 
term; 
• Increase of the added value of cotton through qu ality improvement by around 5 per cent in the 
short term; 
• Increase in the transformation of cotton from cu rrent 5 per cent to an average of 25 per cent 
by 2015; 
• Increase in cotton export revenues by 20 pe r cent to 40 per cent in the medium term. 
  
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