WORLD TRADE  
ORGANIZATION  WT/AFT/W/3 
21 April 2006 
 (06-1857) 
Aid for Trade Task Force Original:   English 
  
 
COMMUNICATION FROM THE INTERNATIONAL TRADE CENTRE 
  
 The following communication, dated 19 April 2006, is being circulated to the Aid for Trade 
Task Force at the request of the International Trade Centre. 
 
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RESPONSES TO WTO TASK FORCE ON AID FOR TRADE 
 
 
I. WHAT IS THE CURRENT SCOPE AND CONTENT OF YOUR AID FOR TRADE 
PROGRAMMES?  WHAT ARE THE LESSONS LEARNED? 
1. The totality of the International Trade Centre's (ITC) work is meant to serve as Aid for Trade 
and it has been this way since the creation of ITC by the General Agreement on Trade and Tariff 
(GATT) in 1964.  Indeed, the GATT created ITC as " a technical cooperation organization whose 
mission is to support developing and transition eco nomies, and particularly their business sectors, 
in their efforts to realize their full potential for developing exports and im proving import operations 
with the ultimate goal of achieving sustainable development.  ITC deals specifically with the 
operational aspects of trade promotion and export development ".  The United Nations (UN), through 
the United Nations Conference on Trade and Deve lopment (UNCTAD), joined with GATT in 1968 
and did not modify the mandate.   
2. However, as indicated in our letter of 24 Fe bruary 2006 addressed to Mr. Lamy, the term Aid 
for Trade  obviously means different things to different  people and needs to be properly defined to 
facilitate the dialogue among so many players.  In our view, there are four broad areas:   
i. policy:   national, inter-country and global dimens ions of policies needed to support trade 
development.  National strategies for trade in cluding export strategies, as part of national 
development plans;  cross-border facilitation;  global facilitation;  and, rule making.   
 
ii. infrastructure:   physical infrastructures to support trade, including assistance to industrial 
facilities.   
 
iii. compensation:   adjustments to compensate for tariff re duction, preference erosion, the cost of 
conforming to standards and the like.   
 
iv. trade-related technical assistance (TRTA):   pragmatic means to help with supply-side 
constraints and to build a people and institutional capacity to trade. 
 
3. ITC's contribution to the Aid for Trade initiative under consideration is mainly in the area of 
trade-related technical assistance , but includes part of policy  also.   WT/AFT/W/3 
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 4. Within our mandate, we have five organizati onal goals which best describe the scope and 
content of our work: 
• Multilateral trading system.   Facilitate the integration of developing and tr ansition economy 
firms into the multilateral trading system. 
• Trade development strategies.   Support national efforts to design and implement trade 
development strategies. 
• Trade support services.   Strengthen key trade support services, both public and private. 
• Sectoral performance.   Improve export performance in sectors of critical importance and 
opportunity. 
• Competitiveness.   Foster international competitiveness  within the business community as a 
whole and among small and medium -sized firms in particular. 
 
5. Our technical programmes are specifi cally in the following seven areas: 
• Strategic and operatio nal market research. 
• Business advisory services. 
• Trade information management. 
• Export training capacity development. 
• Sector-specific product and market development. 
• Trade in services. 
• International purchasing and supply chain management. 
 
6. The lessons learned  from the many evaluations we have undertaken in this context include 
the following: 
• technical assistance works best when it is re quested by and influenced in its design by 
recipients themselves. 
• All kinds of needs assessment, and development of strategies in the trade field, can only be 
done in a meaningful and sustainable way thro ugh inclusive and consultative processes – in 
which the private sector must play a vital part. 
• the business community – the true exporters – n eed pragmatic technical assistance and have 
little time for theories about optimal conditions for trade. 
• in addition to TRTA aimed at building expor t skills, developing countries are demanding 
more and more help in enhancing competitiv eness, designing and implementation of export 
strategies and basic knowledge about WTO rules, all of which are ITC specialties. 
• better business and government dialogue is ess ential in achieving results with TRTA. 
• greater awareness of the potential of busin ess advocacy helps the business sector of the 
developing world to keep faith in the multilateral trading system. 
 
II. ARE THERE, IN YOUR VIEW, OUTSTANDING IMPORTANT TRADE-RELATED 
NEEDS THAT ARE NOT MET TODAY? 
7. Despite many years of donor-funded activities, so me developing countries are worse off than 
they were 30 years ago.  Part of the problem de rives from existing trade and international financing 
conditions which, for the weakest partners, require urgent amelioration.  These are being addressed in 
part through the Doha process.   
8. There are also problems with the nature and orientation of TRTA in which donors and 
development agencies are still concentrating predomin antly on "what they can do", rather than what 
people in countries really need them to do.  While th ere is a plethora of trade assistance targeted at the 
macro / policy and economics level and micro / enterp rise and poverty level in the poorer developing 
countries, there is a missing "meso" level, which needs to focus on practical assistance to develop 
entrepreneurial activity and the trade-enab ling environments (see Figure 1 below).   WT/AFT/W/3 
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Figure 1  
 
9. If trade for development is to succeed, and if trad e diversification is to be achieved, exporters 
and importers in developing countries need to be ab le to draw on the tools of TRTA on these three 
levels.  The goal is to develop more effective ma rketing (and sourcing) strategies on the basis of an 
assessment of trade opportunities at the regional and gl obal level.  It will imply a mental change of 
outlook from domestic to international markets.   
10. For the majority of small and medium-sized  enterprises (SMEs) located in developing 
countries and isolated from the major trading routes,  this is major challenge .  TRTA can help to 
address this challenge by providing easy access to to ols and networks which render the fundamentals 
of international demand and supply and market ac cess transparent, and strengthen the capacity of 
SMEs to convert this information into eff ective marketing strategies and actual sales.   
III. HAS TRADE, AS A VEHICLE TO PROMOTE GROWTH, DEVELOPMENT AND 
POVERTY REDUCTION, BEEN ADEQUA TELY ADDRESSED IN COUNTRIES' 
DEVELOPMENT PLANS AND POVERTY REDUCTION STRATEGIES?  IF NOT, WHAT ARE THE MAIN REASONS AND HOW COULD THIS BE CORRECTED? 
11. The short answer is "no" and there are several reasons why trade has so far not received 
adequate attention in deve lopment and poverty reduction. 
12. First, the essential linkages between trade, development and sustai nable poverty reduction 
have never been properly demonstrated to national policy-makers.  Trade cons iderations have been 
mostly confined to the macro level with an "ec onomic" label, whereas poverty reduction is considered 
a "social" issue.  In fact, as many of ITC's ac tivities have shown, there are myriad trade opportunities 
which can bring direct benefits to the poor in  very tangible ways – through new income and 
employment opportunities.  (It is the basis for our Export-related Povert y Reduction Programme – 
EPRP). 
 WT/AFT/W/3 
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 13. Second, and relatedly, those involved in de veloping plans and programmes are often not 
people who have been involved with, or are knowle dgeable about, trade.  Significantly – as will be 
repeated often in our responses – small business inter ests are not consulted or taken account of.  And 
when we say small business, we include the "micro -enterprises" right down to the single female silk 
weaver or poor farmer growing marketable commodities.  
14. Third, there is insufficient awareness among development agencies of the importance of 
international markets for small ente rprise and thus insufficient attention to their specific needs.   
15. The reasons suggest the remedies.  It is incumb ent on agencies like ours to continue to press 
the case for more attention to the small and micr o-enterprises, and to demonstrate exactly how 
international markets can bring direct benefits to the poor.   
IV. HOW, IN YOUR VIEW, SHOULD TRADE-RELATED NEEDS AND PRIORITIES 
BE IDENTIFIED? 
16. There are two types of answer:  "how" in term s of process and "how" in terms of substance. 
17. Process
:  as with all development needs assessments, trade demands practical and 
participatory processes involving representatives of commercial business (large and small), 
government agencies and civil society.  These pro cesses need to be designed in such a way as to 
attract and engage all the particip ants, with appropriate external co -facilitation where desired.  These 
processes need to help people illustrate (literally) the linkages in a country between trade, services, 
communities and prosperity to gain new insights in to opportunities and to de-construct prejudices.  
(As it happens, ITC has considerable experience  in this area and has developed a range of 
methodologies, fully adaptable to local circumstances). 
18. It is imperative also to draw on previously available needs assessment s, prepared under such 
initiatives as the Diagnostic Trade Integration St udies of the Integrated Framework (for Least 
Developed countries).  Similarly, the World Ba nk, IMF, WTO, UNCTAD, ITC and other UN and 
non-UN bodies have undertaken surveys of needs in developing countries, and these should be used 
as reference and built upon.  In the optimal scenar io, the expertise of different agencies should be 
combined.  However, the involvement of external pa rtners in the processes of needs assessment at the 
national level should be light a nd essentially facilitatory.  These processes cannot be driven from the 
outside.   
19. Substance :  Needs assessments should address many critical facets, including:  
• Human capacity building. 
• Institution building. 
• Enterprise development. 
• Product development. 
• Export market development. 
• Physical infrastructure needs and logistics requirements. 
• Adjustment costs (loss-of-revenue rela ted, or preference-erosion related). 
 
V. IS THE EXISTING SYSTEM OF DELIVERY MECHANISMS FOR AID FOR 
TRADE ADEQUATE?  IF NOT, WHERE ARE THE GAPS, AND WHAT OPTION 
MIGHT EXIST TO ADDRESS THESE GAPS? 
20. "Delivery" is the wrong word!  The existing system of implementation of Aid for Trade needs 
to be enhanced by ensuring stronger ownership and deeper commitment of the beneficiary countries.  
A major effort is required in this direction, in  local capacity building for enhancing the national 
arrangements and constituencies in charge of trade development and consequently, the capacity of the 
developing countries to absorb more effectively TRTA.   WT/AFT/W/3 
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  VI. IS THERE A NEED FOR STRENGTHENING MONITORING AND EVALUATION?  
IF YES, HOW CAN THIS BE DONE? 
21. Although monitoring systems of TRTA have recen tly been put in place, particularly the Doha 
Development Agenda database, it is still difficult to ob tain a clear picture of the world of TRTA.  This 
difficulty is largely due to the manner in which descr iptors have been identified and the way in which 
different agencies report to the database.  ITC h as recently undertaken a comprehensive study of 
TRTA levels at country-level within the context of the Integrated Framework.  The study, which 
provides statistical data as well as relevant anal ysis helps complete the picture.  Monitoring 
mechanisms, therefore, need to be strengthened a nd this can be done, first and foremost, by building 
monitoring capacities within relevant institutions at country level.  ITC has already made a proposal 
for funding under the enhanced IF for building cap acities at country level to effectively manage, 
coordinate and monitor TRTA in the country.   
22. On the subject of evaluation it can be said that evaluating results and impact of TRTA on 
trade development, in particular and development at  large is an issue which all TRTA providers have 
had to grapple with.  Whereas, it is evident that  trade can potentially have a strong impact on 
development, it has not always been possible to demonstrate the linkages in a clear and convincing 
manner (see our response to Question 3 above).  Evaluation of TRTA not only needs to be 
strengthened but requires proper c oordination among TRTA providers.  Recent evaluations of TRTA 
programmes such as the DFID, EU and World Bank ev aluations of their TRTA programmes provide a 
useful basis to further the discussion in this area.  It would also be useful to look into the possibility of 
joint country evaluations where a number of agen cies embark together on an evaluation of their 
TRTA in a given country and the overall impact it has had on the trade sector and on development.  
The OECD/DAC working group on evaluation of  trade capacity buildin g programmes should be 
reinforced and further enlarged to include the main TRTA providers within the UN system, the WTO 
and the Bretton Woods institutions.  More importantly, it is crucial that evaluation of results and 
impact is not done only in the sense of "upwar d accountability" where projects and programmes are 
evaluated from an "aid perspective".  What is more important is for evaluation to focus on 
"accountability downwards" and to ensure that bene ficiaries have the capacity to assess whether the 
TRTA interventions have achieved for the trad e sector what they wanted them to achieve. 
VII. WHAT SHOULD BE THE ROLE OF THE PRIVATE SECTOR IN IDENTIFYING 
NEEDS AND IN IMPLEMENTING RESPONSES? 
23. The fortune does lie at the bottom of the pyramid.  Most of the benefits of development derive 
directly from the activities of the private sector, incl uding the largest and the very smallest enterprises 
and local non-profit agencies.  Governments are i nvolved to a steadily diminishing degree.  They 
often remain responsible for major public infrastru cture programmes, but even here their roles are 
being reduced.  
24. It is therefore logical that, as implied in our preceding responses, the private sector should 
have an equal, if not even a pre-eminent role, in determining the development needs of a country, in 
order to emphasize the importance – in the broadest  sense – of the "business environment", and help 
to define the facilitatory and regulatory roles of  the public sector, which would include opportunities 
for public-private partnerships.  For reasons of su stainability also, private interests must be invoked 
since it is they which principally drive the deve lopment process, with or without donor support.   WT/AFT/W/3 
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 VIII.  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? 
25. Aid for Trade should reinforce the principles of the Paris Declaration and Poverty Reduction 
Strategies in the following ways: 
i. Strengthening national development strategies:   as already discussed Aid for Trade should 
facilitate the integration of trade considerati ons into national development planning including 
PRS and it should do so through a ppropriate participatory processes. 
 
ii. Aligning aid:   it is essential that Aid for Trade be fully  consistent with the development needs 
of partner countries.  ITC and other specialized trade agencies can help to articulate needs in 
the trade sector. 
 
iii. Accountability:   Aid for Trade programmes should be fully accountable, not just upwards to 
donor agencies, but more especially downwards to  the true beneficiaries.  Our response under 
Question 6 above elaborates on this point. 
 
iv. Donor coordination:   As in other areas, Aid for Trade programmes supported by donors 
should be fully coordinated and coherent.  IT C strongly advocates th e practice already begun 
of having one donor play a leading and coordi nating role in helping to harmonize assistance 
with individual UN agencies.   Where Aid for Trade is multilateral in intent, it should fully 
respect the principles of multilateralism rather than being "steered by individual donors to 
favour their own bilateral proclivities. 
 
v. Strengthening international capacities:   Aid for Trade should respect the best principles of 
capacity development including the facilitation of change rather than the grafting of external 
solutions, compatibility with local standards, norms and capacities. 
 
vi. Transparency:   Aid for Trade should be targeted at  all relevant sectors including in non-
governmental and private sector interests.  The fuller participation in aid programmes of 
many different interests is the best insuran ce against corruption and misuse of resources.  
 
IX. ARE THERE OTHER IMPORTANT GAPS IN THE DELIVERY OF AID FOR 
TRADE? 
26. The continuing gaps include: 
• Improving outreach to SME's associations and the business community outside capital cities. 
• Transferring quality standards requirements and implementing responses in enterprises. 
• Directly supporting groups of bus inesses to develop market offers. 
• Support for the integration of indigenous SME's in  exporters' value chains as a lever for their 
growth. 
• Development of trade financing and investment  support for SME's and practical upgrading of 
trade facilitation processes. 
•
 Involvement of other interests – particularly  non-governmental organizations (NGOs) – in 
trade programmes, e.g. in the context of fair trade. 
  
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