WORLD TRADE  
ORGANIZATION  WT/AFT/W/11 
19 May 2006 
 (06-2453) 
Aid for Trade Task Force Original:   English 
  
 
COMMUNICATION FROM THE UNITED NATIONS 
CONFERENCE ON TRADE AND DEVELOPMENT 
  
 The following communication, dated 10 May 2006, is being circulated to the Aid for Trade Task Force at the request of the United Nations Conference on Trade and Development (UNCTAD).   
 
_______________ 
 
 
AID FOR TRADE:  AN UNCTAD PERSPECTIVE 
  
I. CURRENT SCOPE AND CONTENT OF UNCTAD'S AID-FOR-TRADE (AFT) 
PROGRAMMES 
1. UNCTAD has a wide-ranging experience and credibility amongst the whole spectrum of 
developing countries on trade and development cap acity-building.  The scale and scope of our 
activities provides our secretariat with a unique capacity to provide developing countries with appropriate and customized trade-related assist ance.  Our accumulated experience and outreach 
enhances our ability to have a multiplier effect acr oss countries, thematic areas and sectors.  Our 
comparative advantage has been that we provide de veloping countries with an integrated perspective 
on trade and development strategies and policies and promote coherence in this regard at national, 
regional and international levels.  Our strength is also that we bring together policy makers with the 
private sector, academia and civil society to fo rge optimum solutions to specific trade and 
development problems.  UNCTAD's technical coope ration and capacity-building draw upon, benefit 
from and contribute to intergovernmental policy di alogue and consensus-building as well as to sound 
research and policy analysis.   
2. UNCTAD's Aid-for-Trade programmes cover broadly the following areas:  
• trade policy formulation and coordination; 
• impact and needs assessments; 
• helping developing countries with trade negotiations; 
• supporting adjustment to trade reform; 
• supply capacity and competitiveness; 
• trade-related infrastructure-building. 
 
3. These programmes aim to set up and reinforce the necessary institutional, human resource, 
policy-making and infrastructure capacity of devel oping countries.  They are accordingly geared to 
implementing the objectives set for AfT.  UNC TAD has carried out AfT-related activities in 
specialized fields within its core competence a nd expertise and under its br oad mandate at national
, 
regional and international levels, as follows :  WT/AFT/W/11 
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  (a) Advisory services on trade policy formulation  and coordination of trade-related 
policies through a number of specific activities, including: 
• setting up mechanisms for inter-ministerial coordination, giving due priority to 
trade vis-à-vis  other policies in the larger context of development, and building 
sustained human resource capacity; 
• establishment of multi-stakeholder consultation mechanisms with the private 
sector and NGOs for effective trade policy formulation; 
• building trade-related institutional capacities and national focal points in Trade 
Ministries and specialized trade agencies (e.g., setting up and empowering trade focal points, tariff commissions, antidumping authorities, etc.). 
 
  In all these activities, UNCTAD has adopted  an integrated approach to trade and 
development – an approach that reflects its interdisciplinary scope at both the national 
and sectoral level.  
 
(b) Assistance to developing countries on trade negotiations:   UNCTAD has been 
building the capacity of developing countries to manage the complex task of promoting their national trade and developmen t interests, in dealing with multilateral 
trade negotiations and balancing the compe ting requirements of their regional and 
subregional engagements (North-South FTAs, including EPAs, and South-South 
RTAs, such as SADC, COMESA, India-Mercos ur, Afro-Asian initiatives, etc). In all 
these negotiating forums, UNCTAD has pr ovided specialized assistance on 
agriculture, NAMA and services negotiations, ru les, antidumping, dispute settlement, 
TRIPS and development, trade facilitation, and so forth.  Particular attention has also 
been given to WTO accession negotiations, including for transition economies.   
(c) Supporting South-South trade, investment and technology transfer:   A t  t h e  
regional level, UNCTAD has worked with regional integration secretariats and 
member countries in the context of South- South RTAs.  In the interregional context 
of the new geography of international trade, UNCTAD has backstopped the third 
round of GSTP negotiations and the implem entation of the Agreement.  It has 
developed a "pro-active agenda" and ac tion plan for South-South trade and 
investment in support of specific regional and interregional trade initiatives, including 
in the context of new and dynamic sectors.  
(d) National impact assessment studies  of trade agreements on horizontal issues (duty- 
and quota-free market access, preferential ma rket access, etc.) and sectoral issues 
(NAMA, agriculture, services), based on its expertise and using various in-house analytical tools and databases, including WITS, TRAINS and ATPSM.  It is implementing an important services assess ment programme for 30 countries in all 
developing regions and for two regional groupings (SADC, COMESA). 
(e) Assessing adjustment costs arising from trade reform , in particular the cost of 
multilateral trade liberalization and reform (e.g., implementation costs related to the 
Uruguay Round agreements, Doha work progr amme, the end of the ATC, preference 
erosion, net food-importing de veloping countries) at national and sectoral level (BOP 
implications, tariff revenue losses, cost of social safety nets, impact on food security, 
etc.).  Several comprehensive studies have  been undertaken, for such countries as 
Bangladesh, Brazil, Bulgaria, India, Jamaica, Malawi, Philippines, and Zambia.  
These analyses have also identified possibl e solutions and mechanisms needed at 
national and sectoral level to cushion th ose likely to be affected by trade 
liberalization.    WT/AFT/W/11 
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  (f) Assistance on commodity trade issues:   UNCTAD has helped developing countries, 
especially the 50 commodity-dependent countries, to identify supply capacity constraints and opportunities;  formulate viable commodity strategies (global value 
chain analysis, export diversification, particularly in Africa and Latin America);  improve trade-related infrastructure and compliance with standards;  and pioneer 
commodity finance schemes for small commodity producers, including risk 
management.  UNCTAD's work on building commodity information platforms has been highly effective in providing tr ansparency and access to vital market 
information for producers, traders and policy makers in commodity-producing developing countries.  INFOCOMM, an UNCT AD Internet portal, provides pricing, 
product and market information on some 20 commodity sectors free-of-charge, and is 
being used by 12 to 15 million people worldw ide.  One example of this new potential 
is a technical assistance project called INFOSHARE, which gives commodity producers access to the information they need  to negotiate better prices and get their 
produce into higher-paying markets.  Success in helping set up commodity exchanges 
in countries like India has fuelled demand for UNCTAD's assistance to other 
countries.  We are, for example, curren tly assisting the African Union in creating 
commodity exchanges in Africa. 
(g) Promoting the participation of developi ng countries in new and dynamic sectors 
of world trade , particularly by identifying trends, products and target markets in new 
and dynamic sectors of world trade;  carrying out sectoral trade reviews to identify 
requisite policies promoting supply capacity , productivity, technological endowment 
and competitiveness; domestic and foreign investment;  market access and entry conditions;  changing demand and preferenc es;  and regional division of labour.  
Based on these analyses, a series of pilot projects for drawing up national and regional strategies on new and dynamic sectors is being implemented.  For instance, 
UNCTAD is working with Southern Afri can countries, in cooperation with the 
Phillips Corporation, to ensure their incr eased participation in electronics production 
and trade.   
(h) Developing and disseminating trade-rel ated databases and analytical and 
benchmarking tools , such as comprehensive tariff and non-tariff databases 
(TRAINS) on developing-country exports.  NTBs are moving towards centre-stage 
among the market access concerns of devel oping and developed countries alike.  The 
UNCTAD Secretary General has accordingl y set up an Eminent Persons Group on 
NTBs to develop a multi-stakeholder and inter-agency approach to collecting, 
quantifying, classifying and making availabl e data on NTBs.  This group includes 
members from the WTO, IMF and World Bank, as well as senior policy makers, 
prominent academics and civil society representatives.  TRAINS-WITS enables 
developing-country policy makers to analyse the impact of various market access scenarios on their trade flows and tariff revenues.  Overall, UNCTAD trains over 500 developing-country officials annually on trade-related databases, analytical and 
benchmarking tools.  We are also seeking to meet the demand for more reliable and 
comprehensive data on services trade, services-related measures and regulations 
through our MAST database.  Other UNCTA D tools now in use by developing 
countries include our new Trade and Deve lopment Index, services assessments, 
benchmarks and performance indicators.   
(i) Trade and environment issues:   UNCTAD has helped more than 30 developing 
countries to adopt trade, environmental a nd development policies aimed at ensuring a 
triple-win outcome.  These activities have  promoted more pro-active, strategic 
national adjustment policies and the adop tion of mandatory new environmental, WT/AFT/W/11 
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  health and safety requirements set by the private sector in key export markets for 
electronic and horticultural products.  An  open-ended consultative mechanism on 
environmental requirements and market acce ss helps some 50 developing countries to 
anticipate, monitor, analyse and cope with  such measures affecting their exports.  
UNCTAD has also supported new production and trading opportunities for organic 
agricultural products and has helped countr ies to design and implement effective and 
sustainable national wildlife trade policies and to gain access to environmentally sound technologies and know-how in the context of trade negotiations on environmental goods and services.  UNCTAD is promoting trade in biodiversity products and services through its BIOTRADE programme and has launched a 
BioFuels Initiative that focuses on new trade and investment opportunities for 
developing countries, on implications fo r poverty reduction and on the supply-side 
constraints of increasing the production, use, and trade of biofuels.   
(j) Trade and competition:   UNCTAD helps over 50 developing countries build 
legislative capacity at national, regional a nd international levels to enable them to 
develop competitive markets.  We review  implementation of the only multilateral 
instrument on competition policy – the UN Set on Competition – which comprises 
non-binding international norms on counter ing anti-competitive practices. UNCTAD 
is assisting several regional groupings, including COMESA, SACU and CARICOM, 
to adopt regional competition and consumer  protection rules.  We have also 
developed a Model Law on Competition and la unched demand-driven peer reviews to 
help developing countries improve their implementation of competition policies. 
(k) Trade facilitation:   UNCTAD has a proven capacity to contribute to the 
implementation process of a number of the issues that are part of the ongoing Doha negotiating process on trade facilitation:  
• Customs automation, through the implem entation of ASYCUDA, which helps to 
enable compliance with such proposals as use of international standards (data 
elements, codes, documents, etc.), pre-arrival clearance, simplified clearance and 
release, post audit, release time control, risk management systems and advance ruling (goods classification, customs duties and taxes), customs management of authorized traders, direct trader input – waiving customs brokers, customs interface with pre-shipment inspection pr ocedures, customs clearance of express 
shipments);  and 
• Designing or improving efficient tr ansit operation systems, including, 
information technology-based monitori ng for transit, the use of single 
international documents, and integr ated border crossing operations. 
 
  In a broader perspective, beyond the measure s currently considered in the context of 
the WTO and in which AfT would also be called for, UNCTAD has built up the 
capacity to: 
 
• Assess needs, programme the sequencing and resources, and conduct the 
implementation of comprehensive trad e and transport facilitation projects; 
• Design solutions adapted to local conditions  which enable interested parties to 
comply with international recommended practices and standards – in this case, WTO binding rules, if required; 
• Set the stage for an encompassing envi ronment in which technology-based 
solutions, human and institutional capacity -building and regulatory measures are 
made complementary to ensure effective coherence across the board;  and  WT/AFT/W/11 
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  • Support hardware development projects, such as those concerning infrastructures 
for transport and services, by means of ma nagement solutions involving users and 
providers alike from both private and public sectors, including cross-border arrangements as appropriate. 
 
(l) Other trade-related technical assistance  activities cover a wide range of topics, 
such as: 
• Science and technology policy for trade and development; 
• Investment policies and strategies and investment promotion activities; 
• Enterprise development activities (EMPRETEC, establishing specialized trade 
finance services, building up a regulatory environment and key institutional set-up of modern ICT-based trade-related finance); 
• Transport and trade logistics (linking national/regional systems to global 
transport operators and networks); 
• ICT activities (promoting the use of ICTs for improved economic performance 
and trade competitiveness in developing countries, E-tourism initiative). 
 
II. LESSONS LEARNED FROM THESE ACTIVITIES 
4. Over the years, we have realized that ther e are several key elements for maximizing the 
impact of technical assistance and capacity-building on the ground:  
• There is a significant rise in the demand for UNCTAD's technical assistance support.  
However, due to resource lim itations, we cannot currently respond to all requests for trade-
related technical assistance (TRTA).  Nevertheless, within available resources, we have 
attempted to cover all developi ng regions, with particular a ttention to LDCs and African 
countries and to those with specific special needs.   
• Training activities are essential to empower trade- related institutions in developing countries.  
UNCTAD is therefore prioritizing human and in stitutional capacity-building activities in its 
technical assistance.   
• Increased efforts are needed to improve trad e-related "global public goods", such as trade 
databases and analytical tools, that could he lp developing countries to better assess the 
opportunities offered by the international tradi ng system.  But the provision of such "goods" 
requires considerable additional resour ces, inter-institutional cooperation and the 
establishment of a network of country-level focal points.  For instance, although UNCTAD 
TRAINS is the most comprehensive NTB database available today, its coverage and 
classification system are still far from satisfactory.    
• Our findings show that adjustment to trade refo rm is costly, and resources are needed to cover 
the complementary measures that will ensure th at trade liberalization leads to a win-win 
outcome.  Trade adjustment should be part of systemic needs assessment exercises (at 
national and sectoral level).  At the moment, th e demand for such needs assessments – an area 
we are prioritizing – far exceeds our capacity.   
• Trade-related technical assistance requires co llaboration and pooling of synergies of all 
implementing partners and relevant intern ational organizations, each according to its 
comparative advantage, and drawing less ons from existing delivery instruments or 
frameworks, such as the Joint Integrated T echnical Assistance Programme (JITAP) and the 
Integrated Framework (IF).   
•
 Country ownership and demand-driven activities ha ve greater development impact.  In this 
regard, multilateral organizations like UNCTAD that are perceived as "honest brokers" are 
better placed to partner developing-country go vernments.  However, communication gaps 
between governments and the private sector and among private-sector enterprises can WT/AFT/W/11 
Page 6  
 
  undermine the efficacy of trade policy initiatives.  We are thus increasingly emphasizing the 
need for North-South partnerships and for dial ogue among all stakeholders in order to identify 
the reasons for the lack of competitiveness, and to devise solutions.  We consistently include 
both public and private-sector participants in our activities. 
• Our experience on commodity issues in particular  has shown that market-based finance needs 
public seed money to share the initial risk and cost s.  This investment in turn has a long-term 
multiplier effect.  A similar multiplier effect could be generated by the newly-established 
International Task Force on Commodities. 
• Country-specific needs assessments (no "one-s ize-fits-all" approach) are crucial for an 
adequate development impact.  Such activiti es should be underpinned by empirical research 
and analytical capacities and by feedb ack and endorsement received through our 
intergovernmental deliberations  and our related mandates.  
• TRTA needs to respond both to immediate need s, such as trade negotiations, and to medium- 
and long-term needs for capacity-building, in cluding supply capacity and adjustment support. 
• Customized trade-related assistance (sectoral, national, regional) is most appropriate in 
keeping with the development and poverty re duction priorities of developing countries. 
• Building local institutional capacities in Trade Mi nistries is important, as in most developing 
countries these institutions are weak, undermining their ability effectively to formulate and 
implement trade policy, develop trade negotia tions strategies and absorb trade-related 
technical assistance. 
• Greater use of and partnering with local in stitutions and human resources in developing 
countries helps build capacities, transfer know ledge and expertise, minimize costs and 
facilitate exchange of experience and networ king between countries and their policy makers. 
• Whilst national- and regional-le vel technical cooperation is important and has immediate 
impact, exchanges of experiences and best practices, along with a multi-stakeholder policy 
dialogue at global level, are also key to improving the quality and impact of policy advice at country level. 
 
III. TRADE-RELATED NEEDS NOT CURRENTLY MET  
5. In our view, the following are the most critical  trade-related needs, which have also been 
identified in the Saõ Paulo Consensus: 
A. T
RADE -RELATED SUPPLY CAPACITY -BUILDING  
(a) Institutional and physical infrastructure:   transport and trade logistics, linking 
national/regional systems to global tran sport operators and networks, product 
standards, etc., as well as needs assessment. 
(b) Strengthening productive capacities and competitiveness:   production 
development activities, supply chain manage ment, diversification and export-value 
added (e.g., in commodities and in new and dynamic sectors of world trade). 
(c) Trade policy and negotiation level:   institutional devel opment and regulation, 
designing domestic trade policies, building regional coordination mechanisms, policy research and identification of constraint s, helping developing countries overcome 
non-tariff barriers, including technical regula tions and standards, helping with trade 
negotiations in the WTO and regional c ontexts and coping with the impact, 
developing services supply capacities and competitiveness.  WT/AFT/W/11 
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  B.  TRADE ADJUSTMENT SUPPORT  
(a) addressing implementation and adjustment costs arising from the Doha Round 
outcomes, including: 
(i) implementation costs in the main negotiating areas arising from 
NAMA, agriculture, services, trade facilitation; 
(ii) adjustment costs (erosion of preferences, tariff revenue losses, 
unemployment, etc.). 
 
6. It is our assessment of these needs, as well as of the ongoing trade negotiations, that the needs 
are inadequately met at the present time in te rms of the scale and scope of resources deployed, 
targeted delivery and country coverage.  
IV. HAS TRADE BEEN ADEQUATELY ADDRESSED IN COUNTRIES' 
DEVELOPMENT PLANS AND PRSP'S?  IF NOT, WHY NOT, AND HOW CAN THIS BE CORRECTED? 
7. Trade needs to be better integrated into development strategies that promote poverty 
reduction, particular in the LDCs. However, this objec tive is barely being met, as reflected in the lack 
of specific focus on trade in most PRSPs.  This may be explained by serious institutional and human capacity constraints on the ability of many countries to undertake in-country trade policy formulation.  
The lack of institutional and process linkages be tween trade policies and national development 
strategies further impedes their mutual integration.  In the particular context of IF, the DTIS could 
link trade policy analysis and needs assessment s to poverty reduction objectives in national 
development strategies or PRSPs.  Overall, approp riate donor priority to this issue and adequate 
funding are called for.   
V. IDENTIFYING TRADE-RELATED NEEDS AND PRIORITIES  
8. Trade-related needs and priorities should be  determined in a genuinely demand-driven 
fashion.  In countries whose trade-related needs and priorities have not been identified, a first step 
could be for the Government to conduct appropriate national needs assessments, involving 
consultations with all relevant stakeholders.  Some countries may require technical and financial 
support for this process, which should be provided on a timely basis.   
9. Such needs assessment and priority identifica tion should be based on the identification of 
development priorities and strategies, including e volving trade priorities.  Trade priorities and 
strategies would in turn be based on an assessment of comparative advantages, existing and potential, 
with goal- and target-setting in terms of overall trade performance and sectoral development. Based 
on this, there is a need to identify capacity and r esource gaps and to conduct an audit of the TRTA 
already available to the country concerned.  This  would then lead to recommendations as to what 
specific additional assistance is required and how differen tly it is to be targeted and delivered in the 
context of AfT.  Once the priorities and needs have been assessed and identified, they should then be 
endorsed by the financing mechanisms to be set up for AfT delivery.   
10. UNCTAD has already conducted trade-related n eeds assessments at national, regional and 
sectoral levels.  In the context of AfT, more comprehensive and in-depth assessments could be 
undertaken, directed specifically at establishing priorities and resource needs.  WT/AFT/W/11 
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  VI. IS THE EXISTING SYSTEM OF DELIVERY MECHANISMS FOR AFT 
ADEQUATE?  IF NOT, WHERE ARE THE GAPS, AND WHAT MIGHT BE DONE TO ADDRESS THESE GAPS? 
11. A distinction needs to be made between funding
 and implementing  mechanisms of delivering 
AfT.  Currently, AfT is delivered through a variet y of mechanisms, most of which combine the two 
functions:  
• Bilateral donor programmes; 
• Multilateral, multi-donor funded programmes, e.g., IF and JITAP; 
• Individual international organizati ons and agencies' programmes;  and 
• Regional organizations and regional financia l institutions, such as development banks. 
 12. Given the multiplicity of programmes, the obvious and most acknowledged problem is 
fragmentation and lack of coordination among the diffe rent players.  A second problem is the absence 
of a common set of agreed priorities to be addressed  by the different players at any given time.  The 
third problem is to know at any given time what is available in the financial kit for AfT to meet identified needs.  The fourth, and related, problem is predictability of the funds available for AfT.  
The fifth is the timing of delivery.  And the sixt h has to do with mechanisms for monitoring, at 
country and international levels, what is being delivered under each of the delivery mechanisms and 
what are the unmet needs.  Taken together, these c ould be considered as the limitations of existing 
delivery mechanisms.  
A. A
DDRESSING THE LIMITATIONS OF CURRENT DELIVERY MECHANISMS  
13. On funding , a predictable stream needs to be es tablished of earmarked and sufficient 
resources for a multi-year implementation of AfT programmes, with the maintenance of effort 
commitment on the part of donors, beneficiaries and implementing agencies.  
14. Secondly, a clear division of labour is desirable between the funding agencies and 
mechanisms on the one hand, and the implementing agencies, on the other.  In order to ensure 
effective delivery at the implementation stage, impl ementation is best entrusted to those agencies with 
core competencies in particular areas.   
15. With regard to funding mechanisms, three main options were identified in the joint 
UNCTAD/COMSEC meeting on AfT (Geneva, March 2006).  One option, proposed there by 
Professor Stiglitz, is to establish a "Global Trade Facility" (GTF) of around US$5 billion, similar to 
the "Global Environment Facility".  However, doubts were expressed at the meeting as to whether key 
donors would support the creation of such a new mechanism.   
16. The second option would be a consolidated mech anism for funding – a sort of "umbrella 
facility" or "consortium" of AfT funding mechan isms, which would regroup existing, separate 
funding mechanisms into a forum to provide a c oordinated response to country-specific needs and 
requests for AfT.  This would function like a donor c onference, but on less of an ad hoc basis than the 
current mechanism.  Such a consortium would incl ude the existing multilateral trade capacity-building 
trust funds (such as IF, JITAP and the WTO Trust Fund) ;  international financial institutions, such as 
the World Bank, IMF and regional development banks ;  and bilateral donors that have made pledges 
on AfT.  Relevant implementing agencies should also be part of this, as should beneficiary countries 
presenting proposals for AfT.  
17. The third option is "business as usual" – building on existing TRTA databases but with 
enhanced transparency, involving notification requi rements and more active consultation mechanisms 
among funding mechanisms, implementing agencies and beneficiaries.   WT/AFT/W/11 
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  18. On implementation mechanisms , it is important to identify a core set of agencies through 
which AfT implementation would be principally cha nnelled.  This would ensure greater coherence 
and effectiveness in AfT delivery within the overall framework of principles and objectives 
established for AfT. 
VII. IS THERE A NEED TO STRENGTHEN MONITORING AND EVALUATION?  IF 
SO, HOW? 
19. Monitoring and evaluation are key to ensuring that whatever mechanism is used, AfT will 
deliver the expected results.  M onitoring and evaluation is to be seen at two levels:  overall AfT 
disbursement and utilization of resources and deliver y of programmes;  and monitoring and evaluation 
of specific AfT projects.   
20. In respect of the first level, there would presumably be a need for annual reporting to a WTO 
body like the Committee on Trade and Development (CTD) on overall implementation, in keeping 
with pledges made.  In the context of its polic y dialogue and consensus- building functions, UNCTAD 
could also contribute to the overall monitoring and evaluation.   
21. In respect of the second level, there is a need for ex ante consensus among all parties involved 
in AfT (donors, beneficiaries, implementing ag encies, etc.) on the benchmarks for assessing and 
monitoring the performance of AfT activities and th eir development impact.  A growing number of 
programme-level evaluations are now using result s-based frameworks.  These evaluations tend to 
recommend that programmes adopt management prac tices, which should also be more businesslike, 
and develop performance indicators related to outcom es rather than outputs alone.  Like many other 
international development agencies, UNCTAD has ex tensive experience in monitoring and evaluating 
technical assistance activities, based on a thoroug h needs assessment that identifies bottlenecks and 
crucial project-related variables.   
22. In the case of AfT, a results-oriented approach should be adopted from the outset in designing 
a more responsive and effective programme, with evaluations conducted by external evaluators at 
various intervals of the AfT initiative.  Realistic ta rgets and indicators of achievement should, to the 
extent possible, be identified with appropriate c ountry-level management strategies and measurement 
tools to ensure country-level results.   
VIII.  PRIVATE SECTOR'S ROLE IN IDENTIFYING NEEDS AND IMPLEMENTING 
RESPONSES 
23. The private sector in developing countries, and pa rticularly in the LDCs – which for the most 
part comprises small- and medium-sized enterprises (SMEs) – faces a variety of constraints in enhancing its export capacity and competitiveness, ranging from inadequate finance and technology 
and inadequate infrastructure to high intermediary co sts and regulatory red tape.  Its involvement in 
aspects of the AfT initiative is therefore essen tial, especially as rega rds production, exports, 
infrastructure and institution-building.  The privat e sector can be a beneficiary of AfT as well as a 
contributor in public-private pa rtnerships, and enterprise devel opment should accordingly be a key 
AfT component.  The private sector needs to be involved not only in delivery but also in the designing 
and planning stages, and a key question raised in this  context is how best to support it.  AfT funding 
should go towards reinforcing government programme s for private-sector development, including 
infrastructure provision, credit risk coverage a nd concessional lending, technology acquisition and 
training.  AfT funding directed at the private sector could also be channelled through EXIM banks and the national development banks of beneficiary countries.   
24. The private sector's role in trade facilitation could be threefold: WT/AFT/W/11 
Page 10  
 
  (i) As the main direct beneficiary of the facilitation: the private sector can act as 
a counterpart or partner of the govern ment agency implementing the formal 
simplification process, particularly in the design of the solution; 
(ii) As a direct actor of the facilitation ex ercise: the trading community and the 
providers of trade support services – including all auxiliary services, such as transport, freight forwarding, banking and insurance – can improve their 
commercial practices and thereby contribute to lower transaction costs and 
times;  and 
(iii) As financial contributors to the im plementation of technology-based and 
capacity-building solutions:  the pr ivate sector has shown initiative in 
relevant, if infrequent, cases where their contribution, both financial and in 
kind, has helped to develop advanced systems and train government officials 
in the use of modern trade-monitoring management techniques. 
IX. HOW SHOULD AFT REINFORCE THE PRINCIPLES OF AID EFFECTIVENESS 
AND COHERENCE, AS AGREED IN THE PARIS DECLARATION AND AS 
EMBODIED IN INDIVIDUAL POVERTY REDUCTION STRATEGIES (PRS'S)? 
25. The principles guiding the new AfT initiative (namely, "secure", "additional" and 
"predictable" funding) and the Paris Declaration prin ciples should be mutually reinforcing.  On the 
issue of  secure and predictable funding , we would also suggest that security and predictability be 
accompanied by the provision of adequate levels  of resources commensurate with the needs of 
developing countries.  The overall level of AfT re sources to be made available must reflect the 
growing demands of developing countries, in partic ular the LDCs, and their genuine trade-related 
needs (e.g., costs of implementation, adjustment, training and institution-building, as well as supply-
side capacity and infrastructure) and not be subsumed under wider adjustment programmes.  
26. In addition, the principle of country ownership will be critical for the success of the AfT 
initiative, and particularly for aid effectiveness.  In our view, ownership would include inter alia 
assessment and articulation of country needs, includi ng priority-setting, integrating the priorities into 
development plans and PRS's, and effective particip ation in the governance structure for managing the 
AfT initiative.  Accessibility, user friendliness and non-debt-creating aspects are vital for a successful 
impact of the AfT fund.   
X. OTHER IMPORTANT GAPS IN THE DELIVERY OF AFT 
(a) Insufficient resources are being made availabl e on a sustained basis to meet the trade-
related needs of developing countries.  It is therefore critical to adhere to the principle 
of additionality and adequacy in AfT, as discussed above.  
(b) A coherent approach to AfT delivery is mi ssing as well.  This applies to country, 
donor and international agencies:   
(i) At the country level , coherence is needed for bene ficiary countries to ensure 
that trade is mainstreamed into deve lopment objectives.  This would require 
inter-ministerial coordination, partic ularly between the trade and finance 
communities, as well as multi-stakeholder consultations involving the private 
sector and civil society.  This is a pr erequisite for a successful AfT, as needs 
and priorities, by virtue of country ow nership, would have to be ascertained 
by the beneficiary countries themselves.   WT/AFT/W/11 
 Page 11 
 
 
  (ii) At the donor level,  multilateral, regional and bilateral donors need to 
coordinate their efforts, both among themselves and with beneficiary countries and implementing agencies, in order to map out developing 
countries' needs according to their natio nal development strategies, including 
those drawn up through the PRSP process.  They must also address well-
defined areas in full coordination among themselves and with beneficiary 
countries.  Such coherence is essential.  It is also critical that assistance be 
given within the framework of the na tional development strategy and plan, 
and not outside of it.  
(iii) At the international agency level , coherence and harmonization of AfT 
deliverables are other prerequisites for efficient results.  Also considering the 
complexity and importance of the work  ahead on AfT, a proposal has been 
made to establish an Advisory Group to the WTO Task Force on AfT.  Such a group would ensure institutional cohe rence and maximize synergy between 
agencies in conceptualizing the Aft init iative.  Now that both the Director-
General of the WTO and the Chair of the Task Force have carried out 
extensive consultations and solicited th e views of the agencies concerned, 
this need may no longer be relevant.  However, once an AfT funding mechanism is established, there will s till be a need for a steering committee 
of implementing agencies to assess needs and evaluate implementation at the technical level.  Such a committee could be modelled on the IF Steering 
Committee.   
 
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