UNDP Engagement in Trade and Development: An Update

Presentation to the Strategic Management Team (SMT)3 October 2005

Bureau for Development Policy

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Structure of the Presentation

1. Overview of UNDP interventions in Trade and Development

2. The Integrated Framework Trust Fund (IFTF)

3. Scaling Up Aid for Trade and Some Implications of an Enhanced IFTF

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Capacity Development for Trade The July 2004 SMT-endorsed developing country

needs have been prioritized:

1. Capacity to compete internationally by overcoming supply-side bottlenecks (especially LDCs)

2. Capacity to negotiate, interpret and implement trade agreements (multilateral, regional and bilateral) which prioritize poverty and human development (HD) concerns

3. Capacity to incorporate pro-poor, development centered trade policy in national development strategies (including PRSPs)

3 October 2005 Bureau for Development Policy 4

Global Initiatives Integrated Framework for Trade Related

Technical Assistance for the LDCs (IF): Focus on national institutional and human resource

constraints in LDCs UNDP: Trust Fund manager and lead agency for

Window II (Capacity Development) Total Fund (2001-2005) as of Sept. 30, 2005:

approx. $35m pledged approx. $33m received

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Global Initiatives TRIPS and Access to HIV/AIDS Drugs

Programme: BDP Poverty Reduction and HIV/AIDS Groups Joint

Cross-Practice Attempt to operationalize 2001 Doha Ministerial

Declaration on TRIPS and Public Health through South-South modality

ACP Capacity Building Programme – in collaboration with UNDP Brussels: To support ACP states in EPA negotiations with

EU, ensuring WTO consistency

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Regional Initiatives Asia-Pacific Trade and Investment

Initiative (APTII): Seeks to strengthen developing country policy analysis

skills and capacity from HD perspective Phase I (2002-2004): approx. 50 “technical support

documents” in 10 thematic/sectoral areas Phase II (2005-2006): emphasis on trade policy issues.

Ongoing collaboration on Regional HDR on Trade and Human Poverty (to be released in first half of 2006) with inputs from Phase I

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Regional Initiatives Africa Trade, Poverty Reduction and HD

Programme: Approved for 2004-2007 period Focus on strengthening both national trade policy and

international trade negotiations, incl. through increased trade-human development analysis

Arab States Trade, Economic Governance and HD Programme: Strengthen poverty reduction and human development

outcomes of trade policy and trade negotiations in Arab States

Close to finalization. Expected to be approved in October 2005 for 2 years

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Country-Based Intra-Regional Initiatives Cushioning MFA Expiration Impact:

Now Part of APTII - Phase II. Substantive design and fundraising led by BDP

Focus on 4 LDCs - Bangladesh, Cambodia, Laos and Nepal Assistance in efforts to cushion the negative impact of MFA

expiration on their textiles and clothing (T&C) exports, strengthen value addition and export diversification

Fiscal Implications of Trade Liberalization: Substantive design led by BDP, funded by RBAP as part of

APTII – Phase II Focus on LDCs in Asia Pacific Analysis of the fiscal implications of trade reform for the

design of pro-poor development strategies and the MDGs

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UNDP Capacity in Trade and Human Development UNDP’s own capacity in trade and HD issues

continues to grow in response to: Increasing demand from UNDP COs, developing

country governments and parliaments Responsibility of being IF Trust Fund Manager and

lead agency for IF’s Window II on capacity development

In addition to existing SURF/Regional Center Trade Advisers and HQ based BDP staff, BDP has established a Trade and HD Unit, as part of the UNDP Geneva Office in third qtr 2004

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The Integrated Framework

Window I: Diagnostic Trade Integration Studies

DTIS completed in 15 countries DTIS validation workshops planned in 6

countries DTIS under preparation in 7 countries

Window II: Capacity Development

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The Integrated Framework Trust Fund Status as of 30 Sept. 2005

Funds Pledged (in $ million):

34.718.716.0

TOTALWindow IIWindow I

Funds Transferred:

32.717.315.4

Funds Disbursed for Projects:

-19.5-8.0-11.5

+13.2+9.3+3.9

Balance:

3 October 2005 Bureau for Development Policy 12

Scaling Up Aid for Trade Linked to Doha Development Round and

achievement of MDGs (esp. Goal 8) Millennium Project Report; UN SG Report for Sept.

Summit July G8 Gleneagles Meeting September 25 World Bank-IMF Development

Committee Communiqué endorsed proposal for an “enhanced IF, including

expanding its resources and scope and making it more effective”

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Scaling Up Aid for Trade IF Trust Fund could plausibly increase from

current $30m up to $ 150 m over next few years:

from current one-time support of $1m per country for Window II to $ 3m per country for all 50 LDCs

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Scaling Up the IFTF:Implications for UNDP Need for an early meeting of the six IF Agencies, key

donors and LDCs at Senior Officials level (now planned for Nov.7, under UNDP Administrator’s leadership): To discuss operational implications of an enhanced

IFTF, if it materializes, and agree on common understanding on how to deal with existing IF problems and way forward

Need for enhanced UNDP internal capacity and resources

Thank you