. /.   WORLD TRADE  
ORGANIZATION  WT/AFT/W/14 
24 May 2006 
 (06-2521) 
Aid for Trade Task Force Original:   English 
  
 
COMMUNICATION FROM THE EUROPEAN COMMUNITIES 
AND ITS MEMBER STATES 
  
 The following communication, dated 22 May 2006, is being circulated to the Aid for Trade Task Force at the request of the Delegation of th e European Communities and its Member States.   
 
_______________ 
 
 
ENGAGING THE PRIVATE SECTOR ON AID FOR TRADE 
 
 1. One of the issues raised in the letter of the Ch airman of the Task Force on Aid for Trade to 
the agencies addresses the role of the private sector in identifying needs and implementing responses.  
The EC and its Member States consider this question very pertinent.  It is the private sector that 
produces and distributes tradable goods and services.  Bene fits of trade are materialized in the private 
sector, for instance through the creation of jobs.  Any Aid-for-Trade mechanism should therefore fully 
appreciate the role of the private sector to ensure getting real results on the ground and give particular 
attention to pro-poor growth strategies.  The privat e sector should therefore be engaged at the global, 
regional and country level in the pl anning and implementation of Aid for Trade.  The first step to be 
set at the country level would be to start struct ured consultations betwee n the government and the 
private sector on trade issues.   
2. To operationalize this, it is essential to link up  with existing public private consultation 
mechanisms for private sector re form programmes that already exist in many developing countries.  
These structures can be used as a vehi cle for the preparation of Aid-for-Trade plans.  An example is 
Zambia, where a private sector-led working group elaborates the Trade Expansion chapter in the PSD 
Reform Programme.  This working group uses valu e chain analyses to identify which collective 
investments are needed for trade promotion.   
Where these consultation mechanisms do no t exist, they should be created.  
 
3. The consultation process should reflect that the private sector in developing countries is 
extremely heterogeneous.  It ranges from multin ational companies in capital to small producers 
established in the periphery of countries and ope rators in the informal sector.  These companies 
obviously have different interests and different perspectives to offer in this policy dialogue.  
Obviously, it is not easy for the smaller compan ies to make their voice heard in the consultation 
process.  Extra efforts are therefore needed to ensure their representation through organizations 
representing their interests, and to provide targeted  support through Aid for Trade so that they also 
can benefit from trade.  
 
 
 WT/AFT/W/14 
Page 2  
 
  How can the private sector contribute to effective Aid for Trade? 
 
4. First,  by doing what it is already doing, i.e., doi ng business.  They could try to add additional 
value by creating innovative business solutions for specific trade constraints in developing countries 
and thus transferring technology and know how.  So me very innovative solutions have already been 
designed by the international private sector.  A good example is a banking system for peripheral areas 
in Kenya developed by Vodafone that operates through mobile phones. 
5. Secondly , by helping to identify constraints to trad e development.  The private sector has first 
hand knowledge about the constraints facing trade deve lopment.  Both the views of the local private 
sector as well as of the international private sector are relevant as they offer different perspectives.  
6. Thirdly , by contributing to remove these constraints.  The role of the private sector in the 
design and implementation of Aid-for-Trade plans can take different forms such as an advisory role, 
participation in the management of activities fo r trade and private sector development, the 
development of action plans, or more directly cr eating public private partnerships to supply specific 
services or to deliver goods and services to the gove rnment or other companies.  A very important 
topic that could be addressed in this context w ould be the involvement of the private sector in 
developing regulations and ope rational support for backbone suppor t services (financial services, 
transport services, customs a nd port functioning, utilities). 
7. To unlock the above-described potential of the private sector the following actions could be 
considered: 
• Governments should include the private sector in their trade policy processes and actively 
involve them in trade diagnostics work, desi gn, implementation and monitoring of Aid-for-
Trade actions.  Where the appropriate instituti onal mechanisms are lacking they should be 
created, building on what is already there. 
• Private sector organizations such as chambers  of commerce and branch organizations in 
developing countries should be supported for in stance through training, studies, seminars, to 
enable the private sector to participate in the trade policy process and the development and 
implementation of Aid-for-Trade plans. 
• Donors should use donor groups on private sector  development to promote and coordinate 
support for trade.  
• Public Private Partnerships should be c onsidered as a delivery mechanism for TRA. 
• At the global and regional level, associations of the private sector should be involved in the 
Aid-for-Trade debate, for instance through inviti ng them to events on Aid for Trade.  They 
could then encourage their members to play a more active role in developing countries, 
including through providing know-how, training and advice.   
 
8. The EC and its Member States suggest that th e Task Force take the above recommendations 
into consideration. 
 
__________