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The Role Played by Aid for Trade in Trade Policy and ENFCC

Since 1995, the Peruvian Government, the same as the other governments in the hemisphere, has received technical assistance from the Tripartite Commission: IDB-OAS-ECLAC to actively participate in FTAA negotiations. There was received a set of reports, studies, research and programs to develop trade capacities for the officers in charge of international trade negotiations. AFT and Strengthening of Trade Policies One of the most important projects in this country was the loan for US$425 million approved by the IDB in September 1991 to finance the “Program: Trade Sector Reform”10, which included reforms in five areas: foreign trade policy, customs reforms, labor market reforms, development of the private sector in agricultural marketing and social compensation. This program enabled to count on the economic resources to start the process of the necessary reforms for trade liberalization. Once progress in the country’s macroeconomic stabilization had been made, particularly in connection with trade opening, the trade policy needed to address new challenges. The main challenge was to transform the concept of competitiveness as the central pillar of the private sector’s efforts in its new entrepreneurial development. As the Peruvian government had implemented a closed economy development model for more than 30 years, it was necessary that all the entrepreneurs shared the need to reconstruct their productive mechanisms. In this sense, in 1994, with the support of the Andean Development Corporation (CAF), Peru received economic aid to hire the company Monitor to conduct the first competitiveness studies in Peru. The results of that study not only helped have a better understanding of the limitations faced by the national productive sector to compete in international markets, but also had a significant communicational effect, as it introduced the concept of competitiveness in the national public opinion. The implementation of trade policies through the National Trade Capacity Building Strategy (ENFCC), the PENX and the National Competitiveness Plan, required multi-sector efforts since these actions are under the scope of responsibility of different instances of the public sector. Consequently, in January 2005, Project to Improve Productive Supply and Facilitate Foreign Trade (PAMC)11—with a budget of US$24 million funded by the WB—was launched to help Peru overcome the restrictions on competitiveness faced by the productive sector and to achieve a continuous sustained growth of Peruvian exports, particularly in terms of non-traditional exports. Nineteen government agencies from nine different sectors have participated in the design and execution of this Project (See Chart Nº 6). Until 2005, in light of the challenge of the FTA with the United States, through the efforts of the public and private sector, several management instruments have been designed and different work instances were created seeking to consolidate a favorable environment to foster the country’s competitiveness. All those measures were gathered in the ENFCC, funded by the CAF. One of the key factors in the quest for competitiveness in the Peruvian economy is, without any doubt, technological innovation. Even though this factor is not directly linked to trade policy, it is indeed an important component of the new development model. With the support of the 10 11

IDB Operation Nº 631/OC-PE. Loan Agreement IBRD Nº 7177-PE.


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