Enhancing Trade Capacity Development in Africa, Caribbean and the Pacific

International trade experts have met in Mauritius to advance a ground-breaking Aid for Trade initiative aimed at boosting economic growth and reducing poverty in African, Caribbean and Pacific (ACP) countries.

The meeting will strengthen the implementation of the Hub and Spokes II Programme, a project launched in 2012 and sponsored by the Commonwealth Secretariat. The programme has been recognised for its effectiveness in enhancing the trade capacity of ACP states.

Commonwealth Deputy Secretary-General, Deodat Maharaj, welcomes delegates at the opening ceremony of the meeting:

"Excellencies

Distinguished ladies and gentlemen

A very good morning. It is a pleasure to be here today at this global event where we are bringing together our network of trade advisors from Africa, Caribbean and Pacific regions. Coming from the Caribbean, I have always had a keen interest in Mauritius and how it has approached its development whether in leveraging ITCs, advancing its services sector or in the establishing systems that makes doing business here quite easy. Indeed, it ranks as one of the best places in the world to do business.

In terms of competitiveness, we could not have found a better place to hold this meeting and there is much to learn from this country. I must also confess that my interest was piqued after reading Mark Twain when he said that God first created Mauritius and patterned heaven after it! Therefore, I am very happy to be here and we would not have had such an opportunity had it not been for the gracious hospitality of the Government of Mauritius in hosting this meeting. I am deeply indebted for the support received from the Ministry of Finance and Economic Development, and the Ministry of Foreign Affairs, Regional Integration and International Trade.

In addition to my pleasure in being in Mauritius for the first time, I take particular delight in being with our partners in the EU, La Francophonie, the ACP and you, our trade advisors from Africa, and the Caribbean and Pacific region. This is particularly so given the strong development results generated by this programme for our member countries. Allow me to highlight just a few:

In terms of training and capacity building, since the launch of the second phase of the programme, we have recorded several significant results, including the training of more than 15,000 individuals and groups from both the public and non-government sectors on trade policy issues.

In Seychelles, the policy advice provided through this programme contributed to its accession to the WTO.

In September last year at the time of the SIDS Conference, a Micronesian Trade Treaty was signed, a first for the region, again with the support from this initiative.

An independent evaluation of the project by Dr Stephen Woolcock of the London School of Economics and Political Science, concluded it: “had made a real contribution to the negotiating capacity of the regions and countries where Hubs & Spokes have been located.”

These results have been a function of your efforts, the partnership with OIF, ACP and the EU. I must also thank the EU for its generous and steadfast support for this programme.

Given the results generated and the evolving global trading architecture, we know how important this programme is for the Africa, Caribbean and Pacific regions. This is especially so since effective participation in global trade continues to represent a key challenge for ACP countries. The focus on international trade-led development is important to overcome the constraints imposed by narrow domestic markets, either because of small population size or low purchasing power of national consumers, or a combination of both factors. Trade can also be important in fostering overall efficiency in these economies through accessing new technologies, securing raw materials from most competitive sources, and triggering positive externalities in other non-trade sectors.

We should be encouraged with the progress made over the past few decades where ACP countries have made serious efforts to better integrate into the global economy by undertaking ambitious unilateral trade liberalisation, mainstreaming trade in national development strategies, being more active in multilateral and regional trade talks, and seeking support for addressing their trade-related capacity constraints.

The trade and economic performance of many of these countries in recent times has certainly been quite encouraging. For example, over the past 10 years or so, least developed countries (LDCs), have seen their share of exports of goods and services increase from around 20% to 32% of GDP. For the first time in many decades, the average GDP growth in Sub-Saharan Africa during the 2000s exceeded the corresponding average growth for the global economy.

Similarly, Sub-Saharan Africa’s merchandise exports grew from US$ 95 billion in 2000 to US$ 439 billion in 2012[1]. Although their shares remains small, economic groupings within ACP such as LDCs, and Sub-Saharan Africa have witnessed increasing shares in global trade: (the share of LDCs increases from about 0.6% to 1.3%, and SSA 1.4% to 2.2%[2]; overall ACP’s share of global trade has increased from 1.8% to 2.5%)

However, the group of small states has had a different experience as their share of world trade fell from 0.7% to 0.4% in the first ten years of this century. This is an issue of deep concern for us in the Commonwealth with 31 out of our 53 members classified as Small States.

Notwithstanding the improved performance of certain ACP sub-groups, there remain significant challenges confronting ACP countries. These relate to both external developments and internal circumstances.

On the external front, first of all, as the world economy recovers from the financial and economic crisis, the trade outcomes do not appear to be very encouraging. In the last two years,  the annual average growth world merchandise exports have barely been over 2%, which is just about one-fifth of the average rate (10% per annum) achieved over the first decade of this century. Export growth prospects in most ACP countries in the coming years remain uncertain.

Furthermore, the dynamics of global trade are also being shaped by a number of emerging trends and developments, a few of which are:

• Firstly, there remains a lack of clarity with regard to when and how the long-running WTO Doha Round negotiations will get concluded. If the promised development dimensions of this Round do not materialise, many ACP countries will find it difficult to use trade as a vehicle for development.

• Secondly, world economy has been witnessing the mega-trading blocs along with the proliferation of regional trading arrangements. The mega-regionals are likely to bring in new trade and investment rules, more demanding standards, and so on. Currently along with ACP states, more than 160 countries with 80% of world population remain outside these negotiated deals. Their potential implications for the global trading systems and ACP countries’ trade prospects could be far-reaching.

• Thirdly is the rise of the global South in the world economy and the growing significance of South-South trade. Just between 2000 and 2012, the combined merchandise exports of all developing countries increased from $2 trillion to $9 trillion, thanks largely to the BRICS. Moreover, in the last 20 years, the share of South-South trade has increased from 15% of all trade to 34%. However, the key issue is how are ACP countries engaging with the trade–drivers of the South is a key issue. There has been some analysis to suggest that ACP countries’ trade relations with the BRICS countries have been commodity-centric and limited to only a few countries. A large majority of ACP countries have failed to benefit from this increasing South-South trade.

• Finally, the next major trend is the increased prominence of global value chains-led trade. Technically, value chains require specialisation in only certain tasks, and opens up opportunities to be associated with an international production network. However, it is becoming increasing clear that ACP countries largely remain outside of global chains.  

These trends imply that effective participation in global trade is going to remain a major issue as ACP countries embrace the new developments. Of course, the traditional challenges associated with supply-side capacity building, developing non-traditional trade sectors, improving trade facilitation measures, and promoting trade competitiveness will continue to exist even under the evolving trading environment. Perhaps their importance will be greater than ever. It is in this context that the coming years are going to be extremely critical for ACP countries in being able to use trade as a driver of economic growth and development.

One further issue is international support mechanisms for ACP countries’ trade capacity building. The Commonwealth Secretariat in particular has been advocating for the need to achieve, and ensuring coherence and accountability among international support mechanisms. A key challenge is that the commitments built into these frameworks have not been effectively linked to the decision-making processes in various fora in which they have been made. For example, WTO negotiations rarely if at all take cognisance of the stipulations in MDG 8 or UNLDC Conferences.

Furthermore, the commitments made are often either non-binding in nature or very loosely phrased. Consequently, several key development issues for these countries, most often intimately linked to trade matters, have tended to be marginalised.  As the UN members, including ACP countries, are currently developing a post-2015 development framework, it is very important to ensure that an appropriate and effective role of trade is included. And, perhaps more crucial is to find ways to make sure that trade support related commitments made by the global community get meaningfully implemented.

Given these issues, the Hub and Spokes II Programme will remain important, and it is therefore an opportune time for us to be together over the next 4 days to brainstorm and agree on ways to strengthen the implementation focus of our programme, including the strengthening of partnerships, communication and outreach of the programme.

I wish all of you a fruitful and productive meeting, and hope that we will leave Mauritius with a strong sense of determination to further enhance the trade capacity development in our regions since we can all agree that Trade on equal terms, is good for jobs, good for growth and good for development.

Thank you."

[1] Based on latest data available from UNCTADstat (2015) in current prices and exchange rates
[2] Based on latest data available on goods and services from UNCTADstat (2015) in current prices and exchange rates