Looking Ahead: Mobilizing Aid for Trade in LAC
lthough LAC countries have more resources than other developing regions, significant gaps remain in their capacity to respond to trade-related challenges and to exploit the opportunities of more open markets. Aid for trade, properly tailored to their specific needs, could make a substantial contribution to closing those gaps. This section highlights the main issues for LAC in the current aid-for-trade debate and considers how donors, recipients and the WTO can make aid for trade more effective and relevant for the region. 3.1. Mainstreaming Trade into LAC Development Agendas Focusing on trade in national development strategies. Trade is crucial to economic growth and should form a central part of national development strategies. The countriesâ€™ trade experts and trade ministries thus have an important role in helping to develop those strategies. But to reap the benefits of more integrated regional and global markets, the countries need more than good trade policies. They also need fiscal, exchange-rate and other macroeconomic responses that avert excessive reform shocks; business-climate initiatives to boost competitiveness and export growth; policies to foster equitable distribution of the gains from trade; and adjustment programs to help exposed sectors cope with reform. While trade ministries should help devise the countriesâ€™ development strategies, other government ministries and private sector actors have an equally important role in crafting the trade agendas that arise from those strategies. Retaining consensus on long-term goals. Implementing a comprehensive trade policy requires setting priorities for short- and medium-term policies, while retaining national consensus on broader, long-term goals. Successful global insertion involves a phased process of reforms, dictated by political realities, adjustment considerations and resource constraints in both the public and private sectors. The short-term and sometimes painful adjustment attendant on the reform process, and the fact that the benefits of reform often materialize only in the longer term, underscore the need for regular consultation between the government, private sector, labor and other social actors to sustain the momentum for reform and avert reform fatigue. Inter-ministerial coordination in designing short- and medium-term policy actions is crucial, since a broad action plan will necessarily cover the mandates of several ministries and government agencies, including finance, planning, trade, labor, agriculture, tourism and industry.
Published on Sep 14, 2007
this report was prepared by the integration and trade sector (int) as a contribution to the regional meeting on mobilizing aid for trade: la...