Helen Clark: Speech at the 4th Global Review of Aid for Trade

Jul 8, 2013

“Connecting to Value Chains – Aid for Trade Support from Multilateral Development Institutions”

It is a pleasure to participate in this Fourth Global Review of Aid for Trade, and for UNDP to be part of the broad global partnership which has emerged in support of the Aid for Trade Initiative. 

This expanding coalition owes a great deal to the strong and able leadership of the WTO Director General Pascal Lamy and the Deputy Director General Valentine Rugwabiza, and, on behalf of UNDP, I thank them both for their vision and leadership. There is now heightened awareness of the importance of trade in advancing the prosperity of all countries, and of how poor countries and populations can participate in and benefit from trade.

Aid for trade has the potential to generate growth and development in ways which leave no one behind. As inequalities grow within and between countries - generating new and destabilising vulnerabilities, following explicitly inclusive approaches to development is an imperative. This needs to underpin the post 2015 global development agenda currently being debated and approaches to trade and development.

UNDP’s 2013 Global Human Development Report, “The Rise of the South: Human Progress in a Diverse World”, identified openness to trade, investment, and innovation as a key driver of the human development transformations being made by many emerging economies. As concluded in this year’s “Aid for Trade at a Glance: Connecting to Value Chains” report, participation in global value chains presents many opportunities for developing countries.

The liberalization of trade and lower costs of communication and transportation have been significant factors in organising production and distribution systems around value chains. That lifts the potential for local producers in countries and communities which have traditionally been marginalised from trade to engage in global or regional markets. UNDP is committed to supporting developing countries to take advantage of these opportunities - working through Aid for Trade and through the Enhanced Integrated Framework (EIF).

The initiatives promoted through Aid for Trade and through smart development assistance can be catalytic in helping countries attract and use finance, produce goods and services efficiently, and develop skills and infrastructure. In these respects, UNDP has learned from its experience that three things are particularly important:

1.    Ensuring coherence between trade and development strategies. To boost productive capacity and connect local producers to value chains, countries are likely to need improvements and reforms across a wide range of sectors.

To generate the broadest possible synergies and engagement of stakeholders, UNDP helps countries to mainstream trade in their national development plans and strategies. By considering trade as a means for achieving development objectives, countries are better able to identify opportunities for key populations and areas and align their budgets and actions accordingly.

With this perspective, developing countries can put in place the policies and initiatives which will encourage lead firms in value chains to transfer skills and technology to local suppliers. Schemes may be set up to reward local sourcing, establish public-private platforms, or engage firms in building needed skills, through vocational and on-the job training.

Countries can also use development strategies to move up value-chains by establishing an enabling environment for the production of higher value-added products and services. Clustering business support services, such as design and marketing, around lead firms, for example, can help grow local markets.

Requests for UNDP support in all these areas has increased.

2.    To attract investment, including through value chains, and to use financing effectively, countries require support to strengthen their institutional and governance capacities.

This support helps establish more predictable and effective regulation, dispute resolution systems, and environmental and safety standards, and helps stem corruption and advance the rule of law.

3.    Support for integration into regional markets is important.

Regional integration can improve competitiveness and deepen domestic markets. For these reasons, UNDP helps countries and regional organisations to shape and implement inclusive regional trade strategies. Through the African Facility for Inclusive Markets, for example, we are helping Burkina Faso, Côte d’Ivoire, Ghana, Kenya, Mali, Tanzania, and Uganda integrate regional value chains for the production and distribution of commodities such as sorghum, onions, and mangoes. Larger markets and better products have helped raise the incomes of many thousands of smallholder farmers.

Global agendas also matter. Had the Doha Round been completed, the opportunities which participation in value chains presents, including in the agriculture sector, would have been greater. I encourage Member States to use the occasion of this Global Review to reflect on the successes and shortcomings of MDG 8 and global partnerships for development. A global, rules-based, fair, transparent and up-to-date multilateral trading system remains essential for equitable development.

At UNDP, we look forward to continuing our close collaboration with the WTO, OECD, and all our Aid for Trade partners. Together, we can build stronger global partnerships for development in which the gains from trade can be more widely shared.

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