south asia watch on trade, economics and environment

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Panel Discussion on Aid for Trade

South Asia Watch on Trade, Economics and Environment (SAWTEE) and Consumer Unity and Trust Society (CUTS) International jointly organized a panel discussion on “Aid for Trade: Regional/ Global Value Chains and the Role of Trilateral Development Cooperation” yesterday. The event was organized at the sidelines of the Fourth Global Review on Aid for Trade taking place at the WTO Secretariat in Geneva from 8 to 10 July 2013.   

Mr. Hong Zhu, Deputy Permanent Representative of the Embassy of China in Geneva, suggested that China could help South Asian countries connect to global value chains by providing market access as well as technical support. Underscoring the significance of a Chinese proverb “To get rich you must build the road” China would be willing to participate in the trilateral cooperation mechanism to support South Asian countries as it has done to Africa. He also highlighted the policy of his government to encourage their domestic enterprises to make commercially viable investments in developing countries.  

Dr. Mohammad Razzaque, Head of Trade and Regional Cooperation Programme of the Commonwealth Secretariat, London, emphasized the role of services in “trade in tasks”. According to him, out of the overall global value chain, 66 percent is retained by the Organisation for Economic Cooperation and Development (OECD) countries and remaining 24 percent is retained by the emerging economics. This leaves only 10 percent for the least-developed countries (LDCs), small and vulnerable economies and the rest of Africa, Asia and Latin America. However, with the right kind of policies and trilateral cooperation, these countries should be able to enhance their participation in the global value chain, he said.

Dr. Ratnakar Adhikari, Chief Executive Director of SAWTEE, said, “The factors that have impeded the prospects of regional trade integration in South Asia are the same that inhibit the possibility of developing South Asia as the regional value chain.” Because of this very reason there is a real danger that LDCs in South Asia can be marginalized from being plugged into regional value chain and subsequently from participating in the global value chain, he said. Therefore, it is necessary to utilize trilateral development cooperation – the cooperation between traditional donor, emerging donor and host countries – based on a clear division of labour, trade mainstreaming in the development cooperation framework and resource commitment from the host government.    

Summing up the discussion, the chair of the session, Mr. Pradeep Mehta, Secretary General of CUTS International said that value chains are one of the key architectures for facilitating the integration of developing countries and LDCs into the increasingly complicated global economy. A necessary condition for successfully accomplishing “trade in tasks” is to coordinate all the stakeholders including traditional donors, emerging donors, host countries and above all the private sector.  While domestic policy issues are critical for facilitating the integration of firms in developing regions, the role of aid for trade, in particular trilateral development cooperation, is equally important.

A total of 30 participants representing government, inter-governmental organizations, private sector and civil society organizations participated at the panel discussion.