<mark>4. A phased, region-specific program of services liberalization designed to promote wider access to lower cost trade-related services, such as efficient telecommunications, electricity, and transport; this should be undertaken on an MFN basis, so as to avoid entrenching monopolies from one or another country.</mark> <mark>5. A program of trade facilitation measures—for example, improvements in customs, ports, border posts -- to reduce costs, linked to intra-regional programs to lower costs of trading, with special attention to lowering transit costs of land-locked countries, with specific benchmarks for implementation;</mark> <mark>6. A program, however small, of temporary movement of persons (mode 4); while not currently in the negotiations, this may be easier to achieve in regional arrangements than in multilateral talks.</mark> <mark>7. Agreements could include new IPR rules and rules on investment, but these should be back-loaded and phased in accordance to a region’s capacity to implement – and to benefit from them. Agreements could include adoption of competition policies consistent with national development strategies and in accordance with a region’s capacity to implement and benefit from them.</mark> <mark>8. “Aid for trade” in the form of a program of technical and financial assistance to support competitiveness reform programs through funding projects that improve trade facilitation, conformity with SPS and TBT measures, alleviate supply side constraints (e.g., infrastructure) and increase administrative capacity in key policy areas (such as tax administration), as well as funding programs that address the adjustment costs that arise from trade reform.</mark> <mark>Derived from Hinkle, Hoppe, and Newfarmer (2005)</mark> Successful implementation of the bold reform programs required for African countries to be able to integrate effectively into the global economy will typically require measures to limit the adjustment costs that will arise. Assistance to firms and workers can both speed the adjustment process and reduce adjustment costs.<sup>18</sup> It is important to get the balance right between assisting firms in previously protected sectors that have long-term viability and supporting resources moving into new high growth/high productivity internationally competitive sectors.

Inter-sectoral adjustment is inevitable and necessary to allow new sectors to grow. For labor, costs arise from (i) finding and taking up a new job – which can be reduced by projects that improve the availability of information on new jobs, support job fairs, and more generally build a bridge between employers and the unemployed; (ii) loss of income during the period of transition – which can be addressed through a social safety net, for example, in the form of social security and unemployment benefits; (iii) the costs of retraining and preparing for work in new sectors – which can be addressed through subsidized training programs, apprenticeship schemes and so on. In general these adjustment costs tend to be lower in more flexibility labor markets.

Similarly, reforms that aim at improving the education infrastructure and quality, in particular at the vocational level, should be undertaken as part of the pro-active policies to support trade reform. For two reasons, it will be important to focus on portable skills that

> 18 For more details on the costs associated with trade reform see Bacchetta and Jansen (2003) and Cordoba et al (2005).

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