RESTRICTEDWORLD TRADE
ORGANIZATIONWT/IFSC/M/3
28 February 2002
(02-0999)
Integrated Framework Steering Committee
Third Session
NOTE ON THE MEETING OF 12 OCTOBER 2001
Chair: Ambassador Henrik Reé Iversen (Denmark)
A. ADOPTION OF THE AGENDA
1. The Chairman apologised for not having been ab le to keep the originally proposed date for
this session of the meeting due to logistical reasons.  He said that since the IF Steering Committee had
last met in May 2001, the IF had further received support, first by the Third United Nations
Conference on LDCs held in Brussels in May 2001, and then by the G-8 Summit held in Genoa in
July 2001.  Further support was expected at the forthcoming WTO Ministerial Conference in Doha.
2. The Steering Committee adopted the proposed agenda as attached in Annex 1.
B. REPORT BY THE CHAIRMAN OF THE INTER -AGENCY WORKING GROUP (IAWG) OF THE 27TH
MEETING , 6-7 S EPTEMBER 2001 AND THE 28TH MEETING , 11 O CTOBER 2001
3. The Chairman recalled that the Steering Committee at its previous meeting had endorsed the
Pilot Phase Work Program which guided the implementation of the IF Pilot Scheme.  The Steering
Committee had also endorsed the selection of three pilot countries – Cambodia, Madagascar and
Mauritania.  Since then, the World Bank, together with the other agencies, had begun the
implementation, by undertaking diagnostic trade integration studies in the three countries.  The Inter-
Agency Working Group (IAWG) had held its 27th meeting on 6-7 September 2001, to discuss, inter
alia, issues that had emerged in the first phase of the implementation.  The report of the 27th meeting
was contained in document WT/IFSC/W/5.  The IAWG had also held its 28th meeting, on 11 October
2001, in advance of this session of the IF Steering Committee.
4. The Chairman of the IAWG said that the issues discussed at the IAWG meetings were
reflected in the subsequent agenda items of this meeting.  The primary focus of the two meetings had
been the implementation of the on-going IF Pilot Scheme, on which the World Bank had presented a
status report.  At the 27th meeting, the representatives of the beneficiary pilots had also been invited to
provide their perspectives on the implementation.  Based on their presentation and responses, theIAWG had drawn four initial lessons.  First, the agencies had misjudged the timeframe for
undertaking a diagnostic trade integration study, which had placed the World Bank and the other
agencies under considerable pressure.  Thus, the first lesson was that it required more time, perhaps,
approximately 6 months to prepare a diagnostic tr ade integration study.  Second, the pilot LDCs had
stressed the need to balance between macro issues, including competitiveness and regulatory policyon the one hand, and micro issues which focus on specific product sectors, such as agriculture, mining
and tourism, essential oil and fishery.  Third, each diagnostic trade integration study should be
country-sensitive to reflect the pilot's economic circumstance and development.  Fourth, it was also
clear that the participatory process of drafting a diagnostic trade integration study had had knock-on
effect for technical assistance and capacity building, due to the use of local consultants.  This had alsohelped expand the domestic trade policy constituency.  These lessons were not necessarily criticism,WT/IFSC/M/3
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but these were more of guidance, which could help improve the implementation of the Pilot Scheme.
Overall, the IAWG believed that significant value existed in the process of preparing a diagnostic
trade integration study.
5. The IAWG had also discussed, together with active participation of the three IF focal points,
extensively on the question of follow-up to the diagnostic trade integration study.  Once the draft of adiagnostic trade integration study was made available, a workshop would be chaired by the
beneficiary LDC, with the involvement of bilateral donors.  It was emphasised that at this stage of the
implementation, country ownership should be strengthened.  At the workshop, stakeholders, including
various government ministries, agencies, bilateral donors and the private sector, would review the
draft diagnostic study, with a view to establishing an understanding on; (i) policy recommendations
which the beneficiary country would undertake; and (ii) priority technical assistance needs.  The
results of discussions at the workshop would then be fed into the national PRSP Steering Committee,as well as into the CG or Round Table meetings.  It was recognised that some institutional capacity
building might be required to ensure the follow-up process.  In this regard, Japan had, for instance,
earmarked its contribution to the IF Trust Fund as capacity building under the Window 2.
Furthermore, as announced at the LDC-III, the US  would proceed with concrete projects in Mali and
Mozambique, as complementary activities to the IF Pilot Scheme.
6. The IAWG had also discussed how the IF Pilo t Scheme would be reviewed and assessed, so
that the lessons learned would be fed into the implementation of the Pilot Scheme and in its extension.
There were four measures that could be used as assessing the success of the Pilot Scheme: (i) the
extension to which trade priority areas of action would be integrated into a national plan for
development or a PRSP; (ii) the extent to which the agencies would refocus their programmes by re-allocating resources to reflect those trade priority issues identified in the diagnostic studies; (iii) the
extent to which bilateral donors would demonstrate a coordinated approach to the delivery of TA, by
taking account of those identified technical assistance projects in their work programmes; and (iv) the
extent to which the beneficiary LDC would, not only re-allocate its resources to take account of trade
issues in the diagnostic study, but would also make policy adjustment arising from the study.
7. Furthermore, the IAWG had agreed to consider the enhancement and extension of the IF
model, which was currently applied only to LDCs.  In this regard, it had been decided to hold a
seminar on mainstreaming, which would be a follow-up to the first seminar held in January 2001. The
second IF joint seminar "Trade mainstreaming and enhancing the IF approach", would be held on 25-
27 February 2002.
8. Finally, the IAWG had discussed the ITC's project proposals on follow-up to the IF Round
Table meetings in the five LDCs.  The ITC had led the consultations with the five LDCs, pursuant tothe decision by the IF Steering Committee, to identify prioritised and sequenced trade-related
technical assistance projects in support of mainstreaming.  The details would be discussed under
agenda item D.
9. The representative of the European Communities introduced a new colleague, based in the
DG Trade, who was exclusively responsible for trade-related technical assistance and capacity
building.  This indicated the importance that the Commission attached to technical assistance and
capacity building, as well as coordination in this area.  Regarding document WT/IFSC/W/5, he sought
some clarification.  First, further explanation could be provided on para 15 of the document
concerning the IAWG's recommendation to delete Window II of the IF Trust Fund.  Second, further
information was sought with regard to the esta blishment of a mechanism for transparency and
information flow amongst the agencies, including IAWG focal points, divisions and field offices
involved in the Pilot Scheme, beneficiary Govern ments, other LDCs and donors.  Such mechanism
would be essential in ensuring the involvement of  bilateral donors in the follow-up phase of the IF
implementation.WT/IFSC/M/3
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10. The representative of Zambia expressed concern about the late arrival of documentation,
which could affect effective participation of the beneficiaries in discussions.
11. The representative of Bangladesh concurred the concern expressed by Zambia.  He noted that
the IF was moving towards a more macro approach, which might contradict the original purpose of
the IF to assist LDCs in developing an environment for export expansion.  In discussions on theproposal for follow-up to the IF Round Table meeting, Bangladesh had opted for a leather-sector
specific project, since there were enough studies at the macro level, sponsored by the World Bank and
other organisations.  He cautioned that too much emphasis on the macro approach, emphasised by the
World Bank, might undermine the expectations of LDCs, embodied in the Uruguay Round and the
Singapore Ministerial Declaration.
12. The representative of Pakistan welcomed the enhancement of the IF model, including the
possible future extension of its coverage to include other low-income developing countries.
13. The representative of Haiti commended the efforts by the World Bank to integrate sectoral
issues such as  agriculture, fisheries, mining, tourism and essential oil, into the IF studies, which were
important for raising production and export capacity of the LDCs.  However, he noted that LDCs
should be accorded priority in the IF before its extension to low-income developing countries.
14. The representative of Djibouti welcomed progress made in the IF, and his country was fully
committed to the implementation of the IF Pilot Scheme.
15. The representative of Zambia said that in evaluating the performance of the IF, it was
important to take account of the beneficiaries' views, which should be reflected in the level of capacity
building achieved.  He asked how the agencies intended to achieve the ultimate objective of capacity
building in the IF.
16. The Chairman noted that the issued raised under this agenda item would be further discussed
under separate agenda items which would follow.
17. The Steering Committee took note of the reports by the Chairman of the IAWG, and the
issued raised.
C. IMPLEMENTATION AND FOLLOW -UP TO THE IF P ILOT SCHEME
18. The Chairman said that since the implementation of the Pilot Scheme had begun in May
2001, the World Bank had led the preparation of the diagnostic trade integration studies (DTIS) in
three pilot countries, Cambodia, Madagascar and Mauritania.  The objective of the studies was to
assess and identify, from various perspectives, those constraints that hampered the country's effective
participation in the global economy.  The findings from the study would then form the basis for an
Action Plan, which would include a set of policy recommendations and priority technical assistance
needs, to be prepared in consultation with all stakeholders, to overcome the constraints identified.
19. The Chairman informed that the Steering Committee had initially invited the IF Focal Point
from Cambodia to this meeting, to provide the beneficiary's perspectives on the IF process.  Due to
the prevailing international security situation, he  was unable to attend the meeting, however, he had
submitted a presentation paper, which he had intended to make at this meeting (Annex 2).
20. The representative of the World Bank said that the DTIS assessed both the supply-side and
demand-side constraints for exports of the pilot LDCs.  Each DTIS included sections on market
access, macroeconomics (including the exchange rate performance), the trade policy regime, trade
facilitation (including customs, ports and transport network), as well as specific sub-sector studies ofWT/IFSC/M/3
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the Government's choice.  Overall, the DTIS prov ided both micro  and macro-prospectives of the
economy.
21. The draft reports of the three DTIS were underway and would be made available in the
coming 2 to 3 weeks.  The draft reports would be discussed at the IF workshops where inputs would
be sought from donors, agencies, governments, civil society, with a view to establishing priorities forthe country.  The workshops were tentatively scheduled for 4-5 November 2001 in Mauritania, and
for 19-20 November 2001 in Cambodia, while the date for Madagascar was yet to be finalised.  Such
discussions on the reports would then be converted into a workable programme, in which follow-up
activities to the diagnostic studies would be identified and sequenced.  The DTIS was the only first
step of a long process of the IF implementation.  It  would help trade priorities be reflected in the
country's strategies, and therefore would prov ide a framework for discussions between the
government and development partners on the country's priority technical assistance and other tradeprojects.  Prioritisation of the trade needs was,  however, ultimately dependent on the government.
Finally, agencies and bilateral donors would respond to the prioritised needs with technical assistance
projects.
22. The representative noted some of the lessons learned from the first phase of the
implementation of the IF Pilot Scheme in the thre e pilots.  The timeframe envisaged by the Steering
Committee had been too tight.  The tight deadline of three months had constrained consultations
which had been necessary for the appropriate preparations for the DTIS.  However, the agencies were
learning from the lessons, which were already being implemented as the process proceeded.  It was
important to recognise the dynamic aspect of the IF process.
23. Finally, the representative spoke on some of the challenges that the World Bank had taken up
since the implementation of the IF Pilot Scheme.  First, the Bank had significantly expanded its trade
work with additional US$ 5 million being pulled into the existing trade work in 2001-2002, including
regional trade issues, research, and individual country studies.  This was significant in bringing the
Bank's country teams into the trade field, by equi pping them with research tools, and specific
programmes and projects.  Second, the Bank had expanded its research capability on the developmentimpact of trade, specifically taking into account the perspectives of developing countries.  This was
well reflected in the report of the Global Economic Prospects, soon to be issued, which essentially
focused on the development implications of a potential Round of trade negotiations.  Third, the Bank
was undertaking detailed research and analysis in the areas of specific interest to developing
countries, such as customs and agriculture.  Fourth, the Bank was expanding the IF framework to low-
income CIS countries and other low-income developi ng countries such as Pakistan, out of its own
resources with some support from DFID.  Lastly, the senior management of the World Bank hadextended support for the expansion of trade work.  Such commitment was reflected in the holding of
monthly  meetings between the Managing Director responsible for operation and the trade team.  The
firm commitment by the senior management was partly due to the IF, which had contributed in
making the trade programme one of the Bank's six strategic priorities, along with the HIPC
programme.
24. The representative of Mauritania said that the IF Pilot Scheme had made much contribution to
his  country.  Mauritania, one of the three selected pilot countries, had undertaken the preparation of a
diagnostic trade integration study, including an analysis of the main sectors of the national economy,
such as fisheries, agriculture and tourism.  A Ministerial Committee had been set up after a workshop
held in June 2001, and had supervised the work of national experts who had worked together withforeign exports to carry out different aspects of the study.  Despite the short time constraint, the DTIS
had been prepared in a practical manner and its content was up-to-date.  A workshop scheduled for
November would examine and review the study, with  a view to enhancing and amending the findings
which would be converted into a national Action Plan.  Once priorities were identified, Mauritania
would mobilise the necessary financial resources to materialise the different components of the study.WT/IFSC/M/3
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25. The Government was fully committed to the success of the IF and it intended to use the IF
mechanism to bring together various national econom ic actors, including local experts, development
partners and the six agencies.  He noted that as Mauritania's IF programme was successful, the IF
Pilot Scheme should be broadened to cover as many LDCs as possible.
26. The representative of Canada stressed the importance of making available the reports of the
three pilot countries before the Steering Committee,  and looked forward to receiving them in the
coming weeks.  Canada welcomed the impact that the IF had within the World Bank, as well as in
other institutions, which should be reflected in the report on the IF Pilot Scheme to be presented at the
Ministerial Conference.  Regarding the Bank's intervention on the extension of the IF approach to
other low-income developing countries, it was noted that the focus should be given to ensuring the
success of the three pilots, including the transition from the diagnostic stage to practical
implementation.  While it was recognised that the preparation of the DTIS had taken longer than whathad been expected, she wondered how the progress on the IF Pilot Scheme would be presented at the
Ministerial Conference.
27. The representative of the United Kingdom welcomed the progress made in the
implementation of the IF and the recent elevation of trade work in the international community.  She
recalled that one of the problems associated with the old IF had been the decline of trade-related workand activities in some of the key agencies over the last decade, which was reversed in the previous
few months.
28. The representative emphasised the urgent necessity of making available of the draft reports of
the three pilots.  A review of the reports and the IF workshops should be done at the IF Steering
Committee, possibly, before the end of 2001.  At the same time, it was important not to lose themomentum that had been created among the agencies.  Once the reports were made available, the
attention should be concentrated on the follow-up process, which was imperative to the success of the
IF initiative.  It was also noted that the response  to studies would have to take place in capitals of
donor countries.
29. She drew attention to paragraph 21 of the written statement by Mr. Sok Siphana of Cambodia,
that a number of donors, such as Japan, Australia, Canada, Singapore, France, ESCAP and the Asian
Development Bank, had already started to respond to various trade needs of the country.  She noted
Mr. Sok Siphana's response at the 27
th IAWG meeting that the donor assistance would not have come
if the country had not been engaged in the IF process.
30. The representative of Japan said that better coordination among donor countries and
multilateral organisations was essential to strengthen the IF.  Since the second meeting of the Steering
Committee, Japan had committed to the Cambodian project, with a view to assisting the country withtechnical assistance and capacity building such as in areas as TBT.  She expressed concern about the
extension of the IF Pilot Scheme to other low income developing countries, as the priority should first
be given to the LDCs, in particular, to follow-up to the DTIS in the pilot countries.
31. The representative of Pakistan welcomed the enhancement of research capability at the World
Bank on the development impact of trade on developing and lest-developed countries, in particular, in
the area of agriculture where they faced enormous problems in exporting their products.  He wished to
see in the IF studies policy recommendations for removal of distortions in the agricultural sector, such
as tariff escalation, which had hindered the devel opment potentials of many developing countries.
Furthermore, recommendations on how to move up the production chain with higher value added.
Finally, the representative expressed appreciation that the World Bank had started to extend the IFapproach to other low-income developing countries, including Pakistan.
32. The representative of Madagascar said that his country, as one of the three pilots, was
satisfied with the evolution of the IF, and looked forward to the report of the DTIS, and the IFWT/IFSC/M/3
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seminar, as well as concrete follow-up projects.  Madagascar also supported the extension of the IF
Pilot Scheme.
33. The representative of the European Communitie s reiterated the importance of the availability
of the three reports at the earliest possible time.  Given the time-consuming process of the
preparations of the DTIS, he cautioned the possible danger of overload on the agencies, if additionalpilots were to be undertaken.  He also expressed concern about the extension of the IF approach to
non-LDCs.
34. The representative of Ethiopia appealed to the IAWG to consider Ethiopia to be part of the
next phase of the IF Pilot Scheme.  She sought clarification on Table I of the document
WT/IFSC/W/9, as to why the preparation for some pi lots listed, including Ethiopia, would only start
in 2002.
35. The representative of Bangladesh stressed the importance of meeting the targeted LDCs in the
implementation of the IF Pilot Scheme.  Within a large institution like the World Bank, the IF Pilot
Scheme was a small programme. Referring to the presentation by the World Bank, trade was one of
the six priority areas of its work along with the HIPC, which had been widely criticised by various
groups.  He hoped that the IF would not become like the HIPC.
36. The Chairman said that all questions related to the extension of the IF Pilot Scheme would be
discussed under Agenda Item E.
37. The representative of the World Bank, in response to the comments by Bangladesh, said that
his institution undertook a number of trade-related work, including in Brazil, NAFTA, Russia and
China.  The frameworks prepared for the IF diagnostic studies were applicable to other low-income
developing countries, with some modification for in dividual country differences.  For instance, as a
result of the IF Pilot Scheme, the World Bank had developed new tools, such as the templates for
assessing the impact of trade, growth, and poverty , for analysing the quality and pricing of services
trade, as well as the database on market access.  The additional resource of US$5 million for 2001 had
been pulled into these type of trade-related work .  Moreover, the Bank had used its own resources to
undertake studies similar to the IF in other low-income developing countries.
38. The Chairman summarised the discussions as follows.  First, while the IF was still an on-
going process, from which the lessons were being drawn, the Steering Committee was reasonably
satisfied with progress in the implementation of the IF  Pilot Scheme.  It was also recognised that the
IF approach was the most comprehensive way of dealing with the trade and development priority
needs of countries.  Second, the Steering Committee looked forward to receiving from the World
Bank the draft reports of the DTIS on the three pilot countries, as there was an understanding that the
preparations for the reports had taken more than what had been anticipated.  Third, the SteeringCommittee underlined that the priority should  be accorded to follow-up to the priority
recommendations for policy and technical assistance from the IF diagnostic studies.  Fourth, the
Steering Committee took note of the presentations by the World Bank and by the IF focal point of
Cambodia, as well as other comments made by Members, which should guide the agencies in the
further implementation of the Pilot Scheme.  Fifth, the Steering Committee might consider havinganother meeting before the end of 2001 to review an y tangible results arising from the three pilot
countries.  Finally, consideration might be given to providing some financial support for the
continuation of the IF process in the pilot countries.
39. The Steering Committee took note of the Chairman's summary.WT/IFSC/M/3
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D. FOLLOW -UP TO THE IF R OUND TABLE MEETINGS IN BANGLADESH , THE GAMBIA , HAITI,
TANZANIA AND UGANDA : REPORT BY ITC (WT/IFSC/W/8)
40. The representative of ITC said that the projects had been prepared pursuant to the decision by
the IF Steering Committee at its first session in March 2001.  The IF Steering Committee had
requested the IAWG to consult with the five governments to examine trade-related technicalassistance projects that had been presented at the Round Tables, and identify and prioritise projects in
support of mainstreaming.  At the 27
th meeting in September 2001, the IAWG had considered draft
project proposals for follow-up to the Round Tables, which were prepared by the five Governments in
consultations with the ITC and other agencies.  On the basis of these discussions, the IAWG proposed
that the following proposals, as contained in document WT/IFSC/W/8 and its five addenda, be
considered by the IFSC for financing from the IF Trust Fund.
41. On Bangladesh, as contained in document WT/IFSC/W/8/Add.1, the project would provide
intensive marking support for the leather, including a diagnostic study, market information, training,
marketing missions, and trade fair participation.  The project implementation would be closely
coordinated with related initiatives taken by UNIDO and the World Bank.
42. On the Gambia, as contained in document WT/IFSC/W/8/Add.2, the pr oject would produce a
master plan for export development of four sub-sectors, including fisheries, horticulture, floriculture,and livestock.  It would also contribute to institutional strengthening and human resources
development.
43. On Haiti, as contained in document WT/IFSC/W/8/Add.3, the project would focus on
institutional strengthening for trade services support and training, and trade policy and export
promotion strategy formulation.
44. On Tanzania, as contained in document WT/IFSC/W/8/Add.4, the project would provide
technical assistance to support the formulation of an export development strategy for fisheries and
gem stones.  It would also contribute to capacity  building for more effective participation in the
multilateral trading system.
45. On Uganda, as contained in document WT/I FSC/W/8/Add.5, the project would contribute to
the formulation of an export development strategy for spices and silk, and would provide capacity
building support to the inter-institutional arrangem ent for participation in the multilateral trading
system.  It should be noted that the projects in Tanzania and Uganda, at the specific request of the
Governments, would provide synergetic linkages with JITAP interventions and would build on the
foundations by JITAP.
46. The representative added that it was envisaged that sectoral studies and strategies would be
carried out in close cooperation with local counterparts, and that they would provide practical bottom-up impetus to an enabling policy framework at the macro level in the countries concerned.  He
proposed that the project proposals be approved by the Steering Committee.
47. The representative of Haiti said that his Government and the ITC had consultations, including
a visit of four officials to Geneva, on the use of US$ 300,000 for capacity-building under the IF.  The
Government had placed high priority to the IF programme, and was fully committed to its fullimplementation.  Haiti also expressed appreciation to the WTO for agreeing to undertake the first
Trade Policy Review of Haiti for 2002 from its existing resources.
48. The representative of the Netherlands welcomed the project proposals, which were concrete
and sector-specific.  However, the late arrival of documentation would make it difficult to give
approval to the proposals, and there was a need to revisit this agenda item on a later date.  He soughtclarification on the linkages between JITAP activities and the IF, as JITAP was in its consolidationWT/IFSC/M/3
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stage and its operations would be evaluated in early 2002.  Moreover, he asked why JITAP countries,
such as Benin and Burkina Faso, were not being co nsidered as potential candidates for the extension
of the IF Pilot Scheme.
49. The representatives of Canada, Japan,  the Untied States,  Norway,  and the European
Communities, concurred with the comments by the Netherlands that the late arrival of the
documentation would make it difficult to approve the proposals at this meeting.
50. The representative of Bangladesh welcomed the propjet proposal which had emerged from
discussions at the IF Round Table meeting held in the country.  He sought minor changes in the
proposal at a later date.
51. The representative of Canada proposed that the proposals be approved if no objections were
received from Members in a few weeks, and that if the necessity arose, an informal meeting should be
held to approve them.
52. The representative of Zambia sought clarification, in paragraph 9 of the document
WT/IFSC/W/5, on why the IAWG had expressed concern, at this 27th meeting, that Bangladesh's
project proposal was overly sector-specific, while the earlier comments by the Netherlands supported
sector-specific proposals.
53. The representative of Norway  supported Canada's proposal that the project proposals be
adopted on a referendum basis, if there were no objections in 2-3 weeks.  He added that such approval
before the Ministerial Conference would be symbolically important.
54. The representative of the European Communities reiterated the importance of incorporation of
JITAP activities into the DTIS and the resulting Action Plan.  He sought clarification on the last
sentence in paragraph 2 of WT/IFSC/W/8, whether "other projects" which could be considered forfunding by bilateral donors, including at meetings  of the CG or Round Table, were listed in any
document.
55. The representative of Haiti concurred with the suggestions by Canada and Norway that a
decision by the Steering Committee on the project proposals would provide positive impetus to the
forthcoming Ministerial Conference.
56. The representative of the ITC, in response to the question by Bangladesh, said that minor
changes to the project proposal would be accommoda ted.  In response to the EC's comments, he said
that the proposals in some cases contained a list of projects where further funding was sought.
57. The representative of Bangladesh, in response to the question raised by Zambia, said that the
project was at the request of his country.  Since Bangladesh had already benefited from a number of
macro-level studies in the area of trade development, it requested a sector-specific project as follow-
up to the IF Round Table meeting.
58. The Chairman of the IAWG, adding to the comm ents by Bangladesh, said that the IAWG, in
its discussions on Bangladesh, had recognised that the value of the sector-specific project, as
contained in document WT/IFSC/W/8/Add.1, would approximate the total cost of a diagnostic trade
integration study, which would provide an economy-wide analysis.  The IAWG had examined the
proposal and had made a recommendation, as contained in paragraph 9 of the documentWT/IFSC/W/5, on the basis of the decision by the Steering Committee at its first session that projects
to be approved for follow-up to the five IF Round Tables should support the objective of
mainstreaming.  Finally, the IAWG had asked Bangladesh for its preference between the sector-
specific project and an economy-side diagnostic study, and on the basis of country ownership, the
country opted for the sector-specific project as follow-up to the IF Round Table meeting.WT/IFSC/M/3
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59. The Chairman, taking account of the late arrival of the documentation, proposed that the
proposals, as contained in document WT/IFSC/W/8 and its five addenda, be adopted, if no objections
were received by 26 October 2001.  If the need ar ose, the Chair would consider holding an informal
meeting for further discussions.
60. It was so agreed.
E. CALENDAR FOR THE NEXT PHASE OF THE IF P ILOT SCHEME : REPORT BY THE WORLD BANK
61. The Chairman recalled that the framework document of the IF Pilot Scheme stated that "in the
light of the lessons learned from the Pilot Scheme, consideration should be given, no later than the
WTO Fourth Ministerial Conference, to extend the initiative to other LDCs.  Pursuant to this decision,
and taking into account the lessons learned in the three pilot countries, the IAWG had considered at
its 27th meeting the next phase of countries under the IF Pilot Scheme.  The background note for the
next phase of countries was contained in document WT/IFSC/W/9.
62. The representative of the World Bank said that since the Second session of the Steering
Committee, a number of LDCs had submitted requests to the Chairman of the IAWG to be included in
the next phase of the IF Pilot Scheme.  Based on such requests, the World Bank had prepared a
calendar for the extension, on the basis of three elements: first, the capacity of the IF team at the
Bank; second, the readiness of its country teams to support the IF work; and third, the sequencing ofon-going and future IF activities.  Out of these elements, the support and buy-ins from the Bank's
country teams was critically important to carryout the IF work, particularly because they would play a
key role in follow-up phase, including in interactio ns with other development partners at the country
level and at CG meetings.
63. Table 1 of the document WT/IFSC/W/9 provided an indicative timetable for the second phase
of the IF Pilot Scheme, which could be carried out within the existing capacity for the coming 12-14
months.  There would be adjustments made in the timetable, however, depending on domestic
situations of the pilot countries.  In three to five countries, the Bank's teams had already clearly
indicated interest in the IF work and there were already on-going trade-related work which could help
generate synergies with the IF work.
64. The timetable also reflected the lessons learned from the initial three pilots.  For instance, in
the second phase, preparatory missions would be undertaken by mission chiefs in advance of main
missions.  Mission chiefs would use such occasion to consult a study with various parts of the
government of the country concerned, review any existing work on trade, have initial contacts with
donors and sensitise them with the IF process.  On the basis of preparatory missions, TORs for the IF
diagnostic trade integration study would be prepar ed.  This was one of the lessons learned from
Cambodia where such a  preparatory mission had proved significant in conducting the IF work.
65. Moreover, the timetable was critical in ensuring the full involvement of the World Bank, as
well as other agencies, as the IF work needed to be built into the on-going and future programmes of
the country concerned.  It would be also important  to have sufficient time between pilot countries in
the timetable to allow for better preparation, su ch as identification of consultants and drafting of
TORs.
66. Finally, the representative stressed that it was of utmost importance not to lose momentum
that had been created for the IF, inter alia , among the Bank's country teams
67. The representative of Guinea said that her Government considered trade as an important
element in the fight against poverty.  Trade was an important part of the economy, after agriculture, as
many people depended on trade for their income.  There had been a number of trade reforms,however, they had not so far brought much economic growth in the country.  A key question for theWT/IFSC/M/3
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Government was what specific reforms could be intr oduced for trade to play a role in improving its
competitiveness in international markets, and ther eby generating income for the poor.  Guinea had
placed trade at the centre of its poverty reduction strategy.  However, this could not be achieved
without the support of bilateral and multilateral partners.  With the help of the UNCTAD and AIG,
Guinea had so far tabled a national strategy for pover ty reduction at LDC-III, which would contribute
to the strengthening of its trade sector.  The count ry had also worked closely with the Bretton Woods
institutions in the context of structural adjustments to fight against poverty.
68. The representative appealed to the Steering Committee to recommend Guinea to be among
the pilot countries in the second phase of the IF Pilot Scheme, as mentioned by the World Bank.  The
country would like to improve its basic infrastruc ture in rural areas, upgrade its trade chain for
products with higher value added and encourage non-traditional exports, such as in agriculture and
fisheries and tourism.  The Government saw the IF had a role to play in creating a more favorableenvironment for trade development.
69. The representative of Lesotho proposed that the Steering Committee adopts the proposal for
the second phase of the IF and the timetable for its implementation.  For Lesotho, the IF arrived at the
opportune moment, as the country had completed the interim PRSP and had begun to work on a full
PRSP.  The IF could complement the shortcomings in the trade area of the interim PRSP, and wouldensure that the full PRSP, to be completed in 2002, would be a balanced one.
70. On the earlier comments by the World Bank on the extension of the IF model to the CIS
countries and other low-income developing countries, he said that it needed to be carefully
considered.  It had taken over three years to revamp the IF, which still required further work.  It was
important, at the first instance, that the IF would wo rk for the targeted beneficiaries, which were the
LDCs.  The extension to other low-income countries should be re-considered in the medium- to long-
term.
71. The representative of Yemen said that that his country had gone through structural adjustment
programmes with the World Bank and the IMF, and had applied to the WTO, and that its commitment
to mainstreaming trade into PRSP had been part of the Government policy.  Therefore, this could beinserted in Table 1 of the document WT/IFSC/W/9.  Furthermore, he sought clarification on the
Governance indicators in Table 2, in particular, with  regard to the use of such indicators for the
selection of pilots.
72. The representative of Zambia also sought clarification on Table 2, and its relation to the five
criteria for the selection of pilots specified in paragraph 3 of the document WT/IFSC/W/9.
73. The representative of Canada said that one of the purposes of the IF was coherence,
coherence with regard to cooperation among the multilateral agencies on the one hand, and
cooperation between the multilateral agencies and bilateral donors on the other, both in cooperation
with beneficiary countries.  The IF process had helped internal coherence within Canada's ministries
of finance, trade and development.  Therefore, it was important to provide a chance for these people
to be engaged in the process, as they were interested in the selection of new pilots.  However, the late
arrival of the document had not allowed consultations with the capital, while Canada supported thecontinuation of the IF process.  She proposed a similar procedure for approval as in the case of the
five Round Table countries under Agenda D.
74. Moreover, she stressed the need to review the results of the initial three first pilots before a
full scale expansion of the IF Pilot Scheme.  Canada had been made this point in several occasions,
including through the Chairman of the IAWG.  She therefore proposed the establishment of a processfor extension, which would allow for careful consideration of the results of the initial pilots and then
would give an opportunity to approve the next phase of pilots.WT/IFSC/M/3
Page 11
75. The representative of Bangladesh sought clarif ication on the footnote of Table 2 in document
WT/IFSC/W/9, the source of the table, and the description of the governance sections of the countries
listed in the document.  He asked how governance was related to trade and how the indicators were
used in the selection of pilots.  He cautioned that new conditionalities should not be imposed, and
proposed the deletion of the table.
76. The representative of OECD welcomed the progress made in the IF and the process in which
the lessons had been learned.  She recalled the speech by H.E. Mr. Sok Siphana, Secretary of State,
the Ministry of Commerce, Cambodia at an ITC c onference, who had explained that the IF process,
which was locally owned, had been catalytic in raising awareness on trade matters, setting in trade
policy in the country, and bringing a number of st akeholders on board.  These elements would need to
be considered in assessing success of the IF Pilot Scheme, in addition to financial resource allocation.
The IF was more of capacity building process than just projects.  The Cambodian case illustrated thatcapacity building could be done by stimulating the consultative process in the country.
77. Second, she stressed the importance of the involvement of bilateral donors at the earlier stage
of the implementation of the IF Pilot Scheme, since much financial resources would be forthcoming
from them for follow-up activities.  It would take at  least one year from the identification of particular
needs to the earmarking of funds by donors to the process.  It was important for beneficiaries to makeefforts in engaging bilateral donors, as well as multilateral donors, at the earliest possible stage.
78. Third, there was concern about steps between th e DTIS and the CG/Round Table process.  If
there was a considerable time gap, in some cases up to five years between CG meetings, some sort of
consultations would be organised with stakeholders, to allow bilateral donors to identify the areas
where they might wish to fund.
79. The representative of Djibouti expressed satisfaction for being considered as part of the next
wave of pilot countries.  There was some work already underway on trade, such as by the World
Bank, ITC and AIG.  Djibouti requested technical assistance in order to speed up the pace of the on-
going work.
80. The representative of Lesotho echoed the comments by Canada on the need to speed up the
release of the reports of the three initial pilots, so  as to allow the timely extension of the IF Pilot
Scheme before the Fourth Ministerial Conference.  As a candidate for the extension, Lesotho had
already started ground work for the IF and would li ke to speed up the implementation of the Pilot
Scheme.
81. The representative of Zambia, in response to the comments by the OECD,  drew attention to
paragraphs 33 and 35 of the responses on the implementation on the IF Pilot Scheme in Cambodia,
prepared by H.E. Mr. Sok Siphana.
82. The representative of the European Communitie s said that it was difficult to extend the
Communities' approval for the new series of pilot countries without seeing the outcome of the three
pilot projects.  Moreover, he expressed concern that the timetable in Table 1 only contained the start
of the process, including preparatory and main missions, but did not indicate any follow-up activities
such as workshops, CG and Round Table meetings.  A more detailed programme would help theCommunities make judgement on the continuation of the IF.  Furthermore, concern was expressed
that reliance on the mechanism of CG and Round Table meetings, which did not meet periodically,
could undermine the momentum created by the DTIS.  He sought the view of the World Bank on this
point.
83. He noted the importance of the regional aspects of integrating trade into development plans,
which could constitute an important aspect of the IF studies.  As the European Union had signed the
Cotonou Agreement with 77 ACP countries, it was committed to regional integration and economicWT/IFSC/M/3
Page 12
partnership between them.  Furthermore, he noted that some of the pilots listed were not WTO
members, and sought justification for the selection.
84. The representative of the United Kingdom said that the principle of the IF was of a process,
which was continuing.  It was therefore important not to lose the momentum, particularly in the
critical time ahead of the Ministerial Conference.  At the same time, as part of the continuous process,the suggested work programme needed to be re-appraised, on the basis of lessons learned from the
three initial pilots.  As the reports of the three pilots were expected shortly, and the IF workshops
would soon take place, the work programme could be reviewed and re-appraised.
85. The representative of Guinea, echoing the comments by Lesotho, appealed to development to
development partners to help the IF make progress.  Guinea had already had a launching seminar of
the IF with participation from all social and economic sectors of the country, and the Government was
determined to make the IF a success.
86. The representative of Zambia said, in response to the EC on the qualification of non-WTO
members in the IF Pilot Scheme, that the IF did not have discriminatory treatment among the LDCs.
While Zambia was not on the list of pilots, it was supportive of those non-WTO members being part
of the IF, as it could help bring them to the trading system through technical cooperation.
87. The representative of Djibouti agreed with the comments by the EC on the importance of
regional aspects of trade in the IF studies.
88. The representative of Lesotho, echoing the importance of the regional aspects of trade in the
IF, emphasised that under the Cotonou Agreement, not only the multilateral agencies, but also
bilateral donors, should mainstream their programmes into the IF work.  Both bilaterals and
multilaterals had the responsibility to complement and supplement each other's work within thecontext of the IF and PRSP.  This type of cooperation would go to the heart of coherence, which
needed to be established not only within the agencies, but also between the agencies and bilateral
donors.
89. The representative of the EC, in response to the comment by Zambia, said that the
Communities had no objection to include non-WTO members in the IF Pilot Scheme.  Rather, they
should be encouraged, as the IF could help them become WTO members.
90. The representative of Japan said that Japan had no objection to the extension, however, it was
important to consider the criteria adopted by the IF Steering Committee, as in para 3 of the document
WT/IFSC/IF/W/9.  Moreover, it was important to see the results of the three pilot countries.
91. The representative of Canada, in response to the comments by Guinea, said that while Canada
was supportive of the IF, it was important to have some results.  The timetable indicated preparatory
missions being scheduled for Eritrea, Lesotho, Malawi and Senegal in November 2001.  She asked theWorld Bank whether it could start these missions without accessing the IF Trust Fund.  Once the
results from the three initial pilots were obtained in two to three weeks, the latter pilots could be
integrated.
92. The representative of the EC asked whether the new pilots could be financed within the
existing  resources in the IF Trust Fund.
93. The representative of Lesotho cautioned that the suggestion by Canada to impose
conditionalities on the use of the Trust Fund would establish a bad precedent for the IF.  After three
years of hard work to revamp the IF, it was important to avoid any segmentation in the IF programme.WT/IFSC/M/3
Page 13
94. The representative of UNDP, in response to the question by the EC, said that under the
current pledges made to the IF Trust Fund, there were just enough resources for the 11 new pilots.
95. The representative of Guinea asked the World Bank why there was no indication of the date
of main mission for Guinea.
96. The representative of the World Bank said that the calendar was not established by the Bank,
but it contained those countries which had asked to be included in the IF Pilot Scheme.  On the basis
of those requests, the World Bank had spoken to its country teams, which had consulted with the
governments to establish a timetable.  In the case of Guinea, the Bank was in the process of
consultations with the Government on the timing of the mission.  He noted that the governance
indicators were only information, not used for the selection, and would be deleted in the future.
97. Regarding the comments on the regional trade aspects, the IF studies looked into regional
trading agreements, in terms of market access.  In some cases, the studies examined the impact of
multiple arrangements, with multiple tariff rates, which could create problems.
98. Regarding the outcome of an IF study, he said that there seemed much misunderstanding.  He
reiterated that a DTIS was not the end in itself, and it had several functions.  First, the study was
essentially an instrument to provide information and issues to be taken up in the PRSP, and inputs into
decision-making by the Government and others.  Second, the study could identify the country' priorityneeds, to which development partners could support in their assistance programmes.  While the study
itself could not design projects, could offer a set of issues around which projects could be developed.
The IF framework could provide a basis for discussions, in which priority issues would be discussed
by the agencies and the government in a coherent framework, not on a stand alone basis.  The findings
of the study would be discussed at the IF workshops.  He also emphasised that the IF was a process inwhich stakeholders had been changing the way of working together.
99. The representative reiterated the importance of establishing a reasonable timetable which
would help bring the institutions together in the IF pr ocess.  He recalled that the three initial pilots had
been done in an unrealistically tight schedule, which had not allowed much preparation for the
studies.  Therefore, preparatory missions would be taken with a view to ensuring inputs from thegovernments, donors and agencies in developing TORs, and preparing for the main missions.  Those
preparatory missions, scheduled for November 2001, would coincide with the economic missions of
the World Bank teams, which would allow the missi on chiefs to gain immediate access to information
and network.  If these opportunities for the mi ssions were missed, the whole programme would have
to be held back.
100. The Chairman asked the World Bank what was its proposal for the extension of the IF Pilot
Scheme.
101. The Representative of the World Bank responded that preparatory missions were planned for
Eritrea, Lesotho, Malawi and Senegal in November 2001, with the mission chiefs already identified.
102. The Representative of Canada said that discussions on the agenda item indicated the strong
willingness by the LDCs and the agencies to proc eed with the extension of the IF Pilot Scheme in
eleven countries as quickly as possible.  It was also assumed that that the World Bank had learnedlessons from the three pilots.  Canada would not object the extension.  However, she stressed that it
was utmost important to keep donors as partners, by keeping them informed with the timely issuance
of information.  Otherwise, it could risk alienating important donors, like Canada, in the IF process.
103. The Chairman summarised discussions under this agenda item as follows.  First, the Steering
Committee welcomed progress made in Cambodia, Madagascar and Mauritania under the Pilot
Scheme, and would look forward to receiving the re ports of the DTIS in the coming weeks.  Second,WT/IFSC/M/3
Page 14
the Steering Committee noted that the IF was still in the learning process, in which due attention
needed to be paid to the lessons learned, and in which the Scheme should be adjusted accordingly.
Third, the Steering Committee recognised the importance of maintaining momentum in the IF Pilot
Scheme, and took note of the eleven countries proposed for the extension of the IF Pilot Scheme.  In
particular, the Steering Committee took note of the four countries - Lesotho, Malawi, Senegal, andperhaps Eritrea, where the World Bank could start preparatory work immediately.  He added that the
Steering Committee could consider a meeting in December, if there was essential information on the
on-going work.
104. The Steering Committee took note of the Chairman's summary.
F. REVIEW OF THE INDICATORS FOR ASSESSING AND MONITORING PROGRESS DURING THE PILOT
PHASE
105. The Chairman recalled that at the Second Session of the Steering Committee, the World Bank
had presented a list of indicators for assessing and monitoring progress during the pilot phase.  While
the Steering Committee had had good discussions on the item, some had requested to revisit these
indicators at this session.  There had been further discussions amongst the agencies in this regard.
106. The Chairman of the IAWG said that he had already presented, under Agenda Item B, the
four indicators for assessing and monitoring progress during the pilot phase.  At this meeting, the
Steering Committee reiterated the importance of establishing the basis for appraising and reviewing
the on-going Pilot Scheme.  It was intended that the IAWG would have further discussions in this
regard at its next meeting.
107. In addition to the appraisal of the implementati on of the IF Pilot Scheme in the three initial
LDCs, the Steering Committee had also called for a broader and more systemic review of the IF,which had also been mandated in the decision by the Heads of Agency of 6 July 2000.  This could be
considered within the framework of the seminar on mainstreaming, which the agencies would be
proposing under Agenda Item I.
108. The representative of Zambia recalled his earlier question on the focus of such an appraisal,
which in his view, should be given on the priority basis to the perspectives of the beneficiaries.
109. The representative of Canada recalled the 18 indicators for monitoring and assessing progress
during the pilot phase, which had been discussed at the previous meeting of the Steering Committee,
in addition to the four indicators which had been discussed at this meeting.  She proposed that if the
assessment of JITAP was available at the time of the next meeting of the Steering Committee, it could
be considered together with the appraisal of the IF Pilot Scheme.
110. The Chairman of the IAWG confirmed the view of Zambia, that the LDCs' point of views
would be placed at the heart of the appraisal. Mo reover, he welcomed the suggestion by Canada that
the JITAP assessment could be considered together at the appraisal of the IF Pilot Scheme.
111. The Chairman proposed that the Steering Committee take note of the comments made and
would revisit this item at its next meeting.
112. It was so agreed.
G. FINANCIAL REPORT BY UNDP ON THE IF T RUST FUND
113. The Chairman recalled that at the previous two Steering Committee meetings, some 11
bilateral and multilateral donors had made pledges to the IF Trust Fund.  Subsequently, Switzerland,
Ireland and the United States had announced their pledges to the Trust Fund at the General CouncilWT/IFSC/M/3
Page 15
and at the Third UN Conference on LDCs in May 2001.  The total pledges amounted to US$6.2
million to date.  The status of remittances to, and expenditure of,  the IF Trust Fund since the
implementation of the IF Pilot Scheme was reported by the UNDP, as contained in document
WT/IFSC/W/7.
114. The representative of the UNDP provided an overview of the document WT/IFSC/W/7.  He
said that as of 30 September, 2001, fifteen bilateral and multilateral donors had pledged a total of
approximately US$ 6.2 million.  France had indicated its willingness to pledge, but had not
announced its contribution.  The contribution by Japan was earmarked towards capacity building in
Cambodia.  As of 30 September, US$1.95 million had been remitted to the IF Trust Fund.  An
additional US$ 1.58 million was expected in 2001, with another US$ 1.58 million in 2002 and US$
600,000 in 2003.
115. Referring to Table 4 of the document WT/IFSC/W/7, with the total remittances expected at
US$ 3.5 million at the end of the 2001, the total expenditures and commitments amounted to US $2.4
million for the implementation of the IF Pilot Scheme  in the three pilot countries and the five Round
Table countries.  If the World Bank undertook missions for the next pilot phase in January 2002,
which would imply additional commitments of further US$ 900,000 for 2001, the end balance of the
IF Trust Fund would be US$ 200,000.  In 2002, with the assumption that the implementation started
in 11 new pilots, the balance would be in equilibrium.  However, if additional commitments for the
expansion were made, there would be a shortfall in the balance.
116. The representative added, just for information, that while the IF Trust Fund had made
available US$ 300,000 for each DTIS, the agenci es had incurred significant costs for the
implementation of the IF Pilot Scheme.  For instance, the World Bank had committed, within its ownresource, US$ 150,000 of staff time on average for undertaking each of the DTIS.  UNDP had
committed US$ 100,000 for financing projects in Cambodia and Lesotho.
117. The representative of the European Communities said that its contribution to the IF Trust
Fund would be transferred in 2001.
118. The representative of Finland said that its contribution to the IF Trust Fund had been
transferred as of 20 September 2001.
119. The representative of Norway confirmed that its contributions to the IF Trust Fund would be
transferred in 2001.
120. The Chairman said that the Steering Committee might consider at it next meeting the issue of
providing some financing for the follow-up stag e in the implementation, in order to keep the
momentum created by the DTIS until upcoming meetings of the CG or Round Table.
121. The representative of Canada supported the Chairman's suggestion and recalled the donors'
meeting held in June 2001 at the OECD, wher e the need for financing the follow-up had been
emphasised by many of the participants.
122. The representative of Guinea expressed appreciation for the contributions made to the IF
Trust Fund.
123. The Chairman proposed that the Steering Committee take note of the report by the UNDP and
the comments made, and that the expenditures associated with the implementation of the IF Pilot
Scheme, which were covered by the IF Trust Fund, be reported to the Budget Committee of each
agency for it to be properly taken into account in their budget planning.
124. It was so agreed.WT/IFSC/M/3
Page 16
H. REPORT BY THE DIRECTOR -GENERAL TO THE WTO F OURTH MINISTERIAL CONFERENCE ,
DOHA, 9-13 N OVEMBER 2001
125. The Chairman recalled that the framework document for establishing the IF Pilot Scheme
required that progress on the implementation of the IF Pilot Scheme be reported to the Fourth
Ministerial Conference.  Pursuant to the decision, the WTO Director-General had prepared a report onthe implementation, in consultation with the other core agencies.  This report, as contained in
WT/IFSC/W/6, described progress made on the on-going implementation, including issues that had
emerged in the three pilot countries, and areas where improvements could be made for the next phase
of the programme.
126. The Chairman of the IAWG said that before introducing the progress report on the
implementation of the IF Pilot Scheme, he referred to the late circulation  of the documentation for
this meeting, which had been repeatedly mentioned by Members.  The agencies fully recognised theproblem and were committed to circulate documents on time.  However, he also highlighted the
capacity problem within the WTO Secretariat, as the IF Secretariat which served all the six agencies,
donors and LDCs, in dealing with IF matters, since no resources for this function had been made
available.  There was the urgent need to stre ngthen the capacity of the WTO for the smooth
functioning of the IF.
127. Regarding the report on the implementation of the IF Pilot Scheme, the Chairman said that it
was a factual report, consisting of; (i) an introduction on the origin of the scheme, (ii) background to
the scheme, including the mandated review which had revamped the IF, not only as a mechanism for
the delivery of trade-related technical assistance,  but also as a mechanism for mainstreaming trade
into country's development plans and PRSPs; (iii) a summary of activities that had been carried in thethree pilots as well as in the five Round Table countries; and (iv) preliminary lessons from the first
phase of the implementation.  The report had already been approved by the agencies.
128. The representative of the World Bank echoed the points by the Chairman of the IAWG that
the unreasonably tight timetable had constrained much-needed consultations with and information
release to interested parties.  The World Bank was in the process of equipping its IF team, withadditional staff, with a view to improving its operations.
129. The Steering Committee took note of the report.
I. SEMINAR "TRADE MAINSTREAMING AND ENHANCING THE IF A PPROACH ", F EBRUARY 2002:
REPORT BY THE CHAIRMAN OF IAWG
130. The Chairman recalled that the IF agencies had held, in January 2001, a first joint seminar on
the "Policy Relevance of Mainstreaming Trade into Country Development Strategies, Perspective of
LDCs".  Over 200 representatives, from donors, deve loping and least-developed countries, and non-IF
agencies, had actively participated in the seminar.  The seminar had been valuable in bringing
together the finance, development and trade communities to discuss, and share experiences, including
on how best to mainstream trade into the national development framework and strategies for poverty
reduction in LDCs.  Many had asked for another seminar to be organised on the same theme.
Furthermore, as the on-going implementation of the IF Pilot Scheme had exhibited the value-added inthis IF inter-agency approach, not only the othe r LDCs, but also many developing countries, were
asking that the IF approach be applied to their countries.
131. The Chairman of the IAWG said that the agencies proposed to the Steering Committee to
organise a seminar, on 25-27 February 2002, as a follow-up to the mainstreaming seminar held in
January 2001.  It was envisaged that the seminar would be structured into four themes: (i) theimplementation of the IF Pilot Scheme in the three pilot countries, with focus on best practices in
mainstreaming; (ii) technical assistance and implementation concerns, focusing on how WTO andWT/IFSC/M/3
Page 17
other agencies could cooperate in areas beyond WTO matters; (iii) linkages between the IF and
JITAP, focusing on how to reconcile the two initiative s in a coherent manner; (iv) the review of the IF
model and its enhancement and extension.  The agencies would welcome any guidance and
suggestions from Members.
132. The representative of Finland supported the agencies' suggestion for the second
mainstreaming seminar, but sought further info rmation on the second theme, proposed for the
seminar.
133. The representative of Canada welcomed the agencies' suggestion for the second
mainstreaming seminar, and recommended the widest possible attendance by the LDCs.
134. The representative of the WTO, in response to the question by Finland, said that the idea for
the second theme was to explore whether the IF model could be extended to the delivery of a wider
set of trade-related technical assistance amongst the agencies and bilateral donors.
135. The Chairman appealed to donor Members of the Steering Committee to consider extending
support for the widest possible participation of LDCs at the seminar.
136. The Steering Committee took note of the report by the WTO and the comments made.
J. ANY OTHER BUSINESS
137. The Chairman proposed the date of 14 December 2001 for the next Session of the meeting of
the IF Steering Committee.
138.  The representative of the World Bank said that the World Bank would prepare an internal
evaluation of the IF implementation, after the release of the DTIS reports and the holding of IF
workshops.  It was important to have enough presentable examples and cases of the IF process,
including the DTIS, workshops, inter-agency and inter-donor contacts, for the Steering Committee tomake assessment of the IF process.
139.  The representative of Canada said that while Canada was interested in holding the next
meeting as early as possible, it was also important for the World Bank and agencies to be prepared to
report on the substance to the Steering Committee.   She suggested that if that was the case, the
meeting could be scheduled for a later date.
140. The Chairman said that he would consult with the agencies and then would communicate the
date of the next meeting to Members of the Steering Committee.
141. In the absence of any other business, the meeting was adjourned.WT/IFSC/M/3
Page 18
Annex 1
INTEGRATED FRAMEWORK STEERING COMMITTEE
Provisional Agenda for the 3rd Session of the IF Steering Committee
Friday, 12 October 2001, 10.00 a.m.
1. The Integrated Framework Steering Committee will hold its third session on Friday, 12
October 2001, beginning at 10.00 a.m. in the Centre William Rappard.
2. The items proposed for the provisional agenda are as follows:
(a) Adoption of the agenda
(b) Report by the Chairman of the Inter-Agency Working Group (IAWG) of the 27th
meeting, 6-7 September 2001 and the 28th meeting, 11 October 2001 (WT/IFSC/W/5)
(c) Implementation and Follow-up to the IF Pilot Scheme
- Progress report by the World Bank
- Report by the representative of the IF focal point for the IF Pilot Scheme
(d) Follow-up to the IF Round Table Meetings in Bangladesh, the Gambia, Haiti,
Tanzania and Uganda): report by ITC (WT/IFSC/W/8)
(e) Calendar for the next phase of the IF Pilot Scheme: report by the World Bank
(WT/IFSC/W/9)
(f) Review of the indicators for assessing and monitoring progress during the pilot phase
(g) Financial report by UNDP on the IF Trust Fund (WT/IFSC/W/6)
(h) Report by the Director-General to the WTO Fourth Ministerial Conference, Doha,
9-13 November 2001 (WT/IFSC/W/7)
(i) Seminar "Trade Mainstreaming and Enhancing the IF Approach", February 2002:
report by the Chairman of IAWG
(j) Any other business
__________WT/IFSC/M/3
Page 19
Annex 2
IMPLEMENTATION OF THE IF PILOT SCHEME IN CAMBODIA
RESPONSES BY H.E. SOK SIPHANA
Secretary of State, Ministry of Commerce
Focal Point for the IF Pilot Scheme (Cambodia)
I. EVOLUTION OF CAMBODIA’S PRO-POOR TRADE STRATEGY
1. Subsequently, an Inter-ministerial Steering Committee responsible for formulating – later on,
implementing – the Government’s pro-poor trade s ector strategy was appointed in March, 2001 with
the Ministry of Commerce (MoC) as chair.
2. On April 17, 2001, Cambodia has been designated as one of the three Pilot Countries for
Integrated Framework Pilot Scheme.
3. In close consultation with the World Bank and the other IF Agencies, the Ministry of
Commerce prepared and presented the Tokyo Road Map at the Fifth annual Consultative Groupmeeting in Tokyo June 2001.  The Road Map is essentially a description of what Cambodia needs to
do to prepare all the inputs required to formulat e a robust pro-poor trade sector strategy which can
become a critical cornerstone of the country’s poverty reduction strategy.
4. IF activities were aimed at complementing other poverty reduction strategy development such
as the PRSP, and the Second Five Year Socio-economic Development Plan (SEDP II).
II. EVENTS FOLLOWING THE TOKYO ROAD MAP
5. In early July, drawing on the Tokyo Road Map, the WB Task Manager and the IF Team
Leader prepared a draft generic IF TOR highlighting emerging needs and team composition and
submitted to MoC for comments.
6. By early August 2001, extensive discussions to incorporate the specificities of the country
requirement was held and the IF TOR was finalized, leading to the recruitment of consultants, the
assignment of MoC counterpart team, the establishment of a permanent IF secretariat at the MoC, and
the commissioning of field work by a 13 member t eam comprising of officials from the WB, IMF and
WTO, sector specialists and 4 local consultants.
7. By End of September 2001, a draft diagnostic report was completed and submitted to the
Ministry of Commerce and circulated among stakeholders for comments and additional inputs.
III. PROGRESS AND EMERGING ISSUES FOR ACTIVITIES FORESHADOWED IN
THE TOKYO ROAD MAP
8. The review of economic and trade sector performance was undertaken by the World Bank
team in Washington, DC.
9. On the macroeconomic environment, a draft report was completed by IMF team members
covering issues such as dollarization and the implications of minimum wages specified in dollars.
10. On the investment climate a review of the investment law which was proceeding under
separate contract with the government involved extensive stakeholder discussions.WT/IFSC/M/3
Page 20
11. For the assessment of competitiveness of Cambodian exporters and entrepreneurs, a survey of
100 firms covering competitiveness and market access is being conducted, the results of which are
expected to be available around 10 September.
12. For the assessment of current trade regime, advices on WTO accession aspects, including
legal obligations and other compliances, are ongoing through to 10 September.  An analysis of theexisting cascade tariff structure raises the issues such as the scope for high protection while not much
established industry depending on this protection; the questions whether tariff could be simplified
without sacrificing revenue and making administration easier; and the implications for tariff binding.
13. The trade facilitation review was undertaken in close consultation with the resident IMF
customs advisor, Bill Le Drew. Some complexities at Customs reflect the commitments made under
CDC approval and obligations to preferential trading partners.
14. Product sector action plans include rice, other agriculture crops, fisheries, tourism, handicraft,
and labor services export.  The draft Rice report  was completed highlighting main issues which
hinged around shifting from a food security/quantity emphasis to an environment where producers are
encouraged to, and can, produce to a specification.  For other agriculture crops, issues also involve
producing to a specification and identification of obstacles - road block taxes, local trade monopolies,
and access to information.  Given the costs of Government provision of services how can farmers beassisted to form associations to access information and technology - farmer associations an option.
The issues raised in the Fisheries report include the need to establish community based regulatory
regimes to replace the company based systems which have been dismantled.  For the Labour Services,
the main issues involve how to test whether slow uptake onto Malaysian market reflects costs of
agency transactions or slow demand from Malaysia.  The Tourism and Handicrafts reports are still inprogress and are due early September.
IV. OTHER INSTITUTIONAL DEVELOPMENTS SINCE THE SELECTION OF
CAMBODIA IN THE IF PILOT SCHEME.
15. On March 28,
 2001, the Government adopted a Sub-Decree amending the composition of the
IF Inter-Ministerial Steering Committee.  The grow ing importance of the IF and the Pro-poor trade
strategy process was reflected in the expansion the steering committee to include high level policy
makers at the secretary of state level for 5 key ministries such as Commerce; Economy and Finance;
Agriculture Forestry and Fisheries; Public Works and Transports; Woman and Veteran Affairs; at the
under secretary of state for 3 ministries such as Industry, Mines, and Energy; Tourism; Social Affairs,
Labor, Vocational Training and Youth Rehabilitation; and key representatives from the banking sector
and the private sector.
16. In July, the Government appointed its senior economic advisor to the post of Ambassador to
the Permanent Mission of Cambodia to the WTO.
17. In August, the Prime Minister appointed a large think tank comprising of senior officials in
the government to assist in matters related to Cambodia's accession to the WTO.
18. The Prime Minister appointed H.E. Cham Prasidh, in addition to his current commerce
portfolio, as Vice Chairman of the Council for th e Development of Cambodia (CDC) in charge of
private sector investment.
19. An extensive awareness campaign on the IF, the Pro-Poor Trade Sector Strategy, and
Globalization was initiated and included inter alia : the holding of a 2 days international conference on
"Globalization: Perspectives on Business and Law", followed by a special condensed lecture at the
Royal Academy of Cambodia, a lecture on Intellect ual Property Rights at the Faculty of Law andWT/IFSC/M/3
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Economics, a National Seminar on Investment for Provincial Governors, and a special Hearing
Session at the National Assembly.
20. A parallel campaign to involve other donors in the process was also undertaken and has
culminated in the pledge of support from key donors like Japan in the area of TBT, Australia in the
area of SPS, Canada in the WTO accession process, Singapore in trade related capacity building,France in the area of IPR protection, ESCAP in the fisheries sector, ADB in the provision of a
electronic law database for the WTO reference centre, and the US in a yet to be determined area.
Several other activities of the Tokyo Road map were funded under an extension of the World Bank
Technical Assistance Project (IDA Credit 2664-KH).
V. EARLY SUCCESSES FOLLOWING THE IF DIAGNOSTIC STUDIES AND OTHER
SYNERGISTIC DEVELOPMENT.
21. Selection of Cambodia as part of  Investment Development Scheme.
This initiative has been conceived during the Brussels Conference similarly with the IF where 4
multilateral agencies (MIGA, UNCTAD, UNIDO, and FIAS) will assist 5 pilot countries
(Cambodia , Mali, Mozambique, Tanzania, and Uganda) in the investment policy review
(focused on sectoral analysis and sector competitiveness unlike the FIAS Law on Investment
review which are primarily driven by SAC conditionalities), linkage promotion, and preparationof investment guide.  These series of activities are very timely as they provide additional
external resources to strengthen the recent in stitutional portfolio merging of commerce and
investment.
22. Support of ITC to implement recommendations of the Diagnostic Studies.
23.1 Development of Essential Oils Industry:  ITC has recently approved the dispatch a
team to undertake the development of the essential oils industry as part of a series of initiatives to
diversify the agricultural sector and in support of the Pro-Poor Trade Sector Strategy.  A ToR is
currently being prepared and a team assembled.
23.2 Quality Improvement of the Spices Industry: ITC is currently implementing a regional
programme to upgrade the quality of spices (hot pepper, black pepper, ginger, etc.) in Vietnam and
Thailand with funding provided from the Swiss Gove rnment.  Suggestions have been made to include
Cambodia in the scheme as well.  The necessary modalities are being reviewed.
23.3 Industry Strategy in Medicinal and Aromatic Plants: ITC has also opened a door to
assist Cambodia prepare a special industry strategy in medicinal and aromatic plants which they
believe Cambodia has the right climate and soil environment to make it a success.  This sub-sector
can fetch extremely high value as compared to other agriculture crops. MoC needs to submit anofficial request to ITC to kick start the process.
23.4 ITC's Export led Poverty Reduction Programme (EPR): ITC has selected 6 countries
(Bolivia, Cambodia, Namibia, Madagascar, Per u, and Vietnam) to implement the EPR program
focusing on: agricultural products (fresh and processed), textiles, leather and leather products, simple
manufactured components, and community-based tourism.  The focus of intervention will be supportto poor communities in producing export-oriented products (formation of producers' groups, training
on entrepreneurial skills, support in the adaptation of products to export market requirements,
partnership with microfinance institution to address producers' credit needs).  A Global Trust Fund -
Window II will be used for that purpose.
23. Support to the Cambodia IF by the Japanese Government:  The Japan Government in Tokyo
has approved in principle:WT/IFSC/M/3
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24. the dispatch of TBT expert to assist in the development of standards, metrology and other
TBT related matters.
25. a special capacity building programme for key staff of the Cambodia's new Permanent
Mission in Geneva.
26. Thai-Cambodian Joint Development Study (TCJDS). The Governments of Cambodia and
Thailand are near completing the joint study the objectives of which are to study and set clear
guidelines for the economic development and co-operation policy between Thailand and Cambodia, in
the short, medium and long term.  It aims at achieving a sustained economic growth for the two
kingdoms through the adoption of strategic partnership principles which seek to maximize the mutual
benefit in the areas of agriculture, trade, tourism and industry.
27. The Integrated Study on Phnom Penh-Sihanoukville Growth Corridor. The Government of
Japan has approved a comprehensive study which is due to last 16 months.  Both of these regionalstudies complement and deepen the IF diagnostic studies.
VI. NEXT STEPS
28. MOC has begun circulating the draft report to various stakeholders while translation of the
draft into Khmer is also underway.  The Government plans to hold a series of debriefing with the
stakeholders (unfortunately only within the capital city of Phnom Penh due to limited funding) andbuild awareness of the issues in anticipation of the national workshop which will be held on
November 19-20.
29. The stakeholder consultations will hopefully provide adequate inputs for the Government to
prepare an official position document for presentation at the 4th WTO Ministerial Meeting at Doha in
November, 2001.
30. The national workshop process should bring to closure on proposals in the draft report and
secure funding commitment from donors.
VII. URGENT ACTIVITIES REQUIRING IMMEDIATE SUPPORT
31. The Government still believes and reasserts its view as expressed at the last IF IAWG in
Washington, DC last month that the majorities of the stakeholders are still left out of the loop as theyare predominantly outside the Capital city where the diagnostic desk studies took place.  The
Government would want to access quite rapidly to a small funding (estimated around $50,000) to
allow the Government to undertake a series of provincial grass-root awareness campaign to build on
the one hand real national support for the national trade strategy and on the other hand to empower as
early as possible these stakeholders in the “National Mainstreaming Process”.  The Government has
touch based with the Embassy of Japan in Phnom Penh for that purpose but is also exploring other
avenue to secure such a crucial support.
VIII.  EXPERIENCES FROM THE IMPLEMENTATION OF THE PILOT SCHEME IN
CAMBODIA
32. The following experiences can be drawn from the implementation of the IF Pilot Scheme in
Cambodia.
33. Inputs from the Government : First: Government as owner of the process : While the initial
TOR was drafted by the Bank Task Manager and the IF Team Leader, the Government believed that
the success of the IF initiative lies to a great extent on it being able to provide the right leadership
both the formulation stage and the implementation.  Government ownership of the process is a sineWT/IFSC/M/3
Page 23
qua non  condition for the success of the pilot scheme in Cambodia.  The Cambodian Commerce
Minister Cham Prasidh has been on the forefront, both on the domestic front and the international
front, to earn the respect and support of the key stakeholders and to assert his leadership on this vital
initiative.  This leadership was in fact one of the key determinants of Cambodia being selected in the
pilot scheme.
34. Second: Government as partner : With the rigid time constraint imposed by factors beyond its
and the IF agencies control (i.e. the Doha meeting in November and to a lesser extent the PRSP
timetable), the Government believes that substantive outputs can still be achieved provided it and the
mission can develop an efficient, collaborative and synergistic partnership drawing on each other
strengths and covering for each other shortcomings.  The mission was comprised on highly qualified
international consultants who, most of them regrettably have never been in Cambodia and thus lacked
the insight of the local realities.  Nonetheless th is deficiency was easily matched by the extensive
exchanges with the Cambodian local consultants and official counterparts.  Research materials and
other policy documents were conveniently made available to the team thus saving enormous research
time and resources.
35. Third: The Government as Policy maker: The Government believes that technical assistance
can be a potent tool for assisting it in the policy formulation and implementation.  For this reason,Minister Cham Prasidh has appointed a senior policy maker, the Secretary of State for Commerce, to
act as the focal point for the entire exercise.  The IF permanent secretariat was established right next
door to his office thus providing instant access for mission team members to discuss policy issues and
other matters requiring quick decisions.  Access of other key policy makers within the Government
was also secured expediently through the network of the focal point.
36. Transparency: The Government feels that the Bank should provide more information on the
management and procedures on the use of the IF Trust Fund and should have discussed more on the
budget allocation with the Government in order to ensure that the fund allocation are prioritized
according to the actual needs of the country specific TOR.  The lack of understanding of the fund
usage on the part of the Government has prevented it from timely securing the necessary budget toundertake several key activities it deems crucial, such as provincial field visits, and capacity building
sessions for key counterpart staff whose responsibilities are to ensure the follow up of the IF scheme
after the departure of the mission.
37. Coordination During Field Missions:  The Government believes that coordination amongst
various government agencies and donors was ade quately made by both the Government and the
mission team leader.  Both bilateral and multilateral consultations and debriefing were held on
numerous occasions during the mission.
Emphasis on Securing the Continuous Support of Stakeholders: The Government believes that
the IF exercise will never be complete if the key stakeholders or beneficiaries are not fully on board
with the process to share and experience the challenges and ultimately the success of the initiative.
The fact remains that the IF will be an ever evolving undertaking which will require constant
nurturing from all concerned, and in particular the Cambodians, be it public sector, private sector, andthe civil society.  Recommendations of actions under the IF study will have to concretely reflect this
need.
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