Aid for Trade: Addressing the Pacific's unique challenges

08 August 2011

Aid for Trade: Addressing the Pacific's unique challenges

Port Moresby, PNG, 8th August 2011 - Isolation, remoteness and fragmentation are elements the Pacific region is all too familiar with.

In this context, international trade remains critical to strengthening the region’s fragile economies.

“As small island states, we need Aid for Trade to help us address the structural, institutional and capacity challenges that stop Pacific businesses from trading more successfully with other Pacific island countries and with the world,” said Tonga’s Minister for Labour, Commerce and Industries, Hon. Lisiate ‘Akolo.

Minister ‘Akolo is Chair of the trade ministerial meeting of the Pacific bloc of the African, Carribean & Pacific (ACP) Group of States currently underway in Port Moresby, Papua New Guinea. He is also Lead Spokesperson for the region’s negotiations for an Economic Partnership Agreement (EPA) with the European Union.

Among other regional trade matters, Ministers will this week deliberate on the way forward for the Pacific Aid for Trade Strategy.

“Through the Pacific Plan, Pacific Islands Forum Leaders have committed to sustainable economic growth and development in the Pacific region through trade and economic integration,” said Minister ‘Akolo.

“For the benefit of our communities, for our national prosperity, and to meet our Millennium Development Goals, international trade is critical to us.”

What is Aid for Trade?

Aid for Trade is development assistance designed to assist countries improve their ability to participate in global trade.

The WTO initiative aims to help developing countries, particularly least-developed countries, develop the trade-related skills and infrastructure that is needed to implement and benefit from WTO agreements and to expand and diversify their trade.

The concept of Aid for Trade was launched in 2005 at the Sixth WTO Ministerial Conference in Hong Kong. In 2007 the WTO's Aid for Trade initiative moved into its first stage of implementing the 2006 recommendations of the Aid for Trade Task Force.

A global review of Aid for Trade is convened every two years. The Third Global Review, convened in July, aimed to strengthen the monitoring and evaluation of Aid for Trade to provide strong incentive to both donors and recipients in advancing the Aid for Trade agenda.

The Pacific Aid for Trade Strategy

In 2009, Pacific Ministers endorsed the Pacific Aid for Trade Strategy, which guides the region’s engagement on Aid for Trade at the regional level, and provides a framework for the development of national trade policy.

“Our island nations need Aid for Trade to help us address the structural, institutional and capacity challenges that constrain Pacific island businesses from trading more successfully amongst each other and with the world,” said Minister ‘Akolo.

“The Pacific Aid for Trade Strategy sets out the framework under which we can initiate and coordinate the assistance required to help the region meet these challenges.”

€35 million for Aid for Trade

In 2010, Pacific Island Countries directed €35 million towards Aid for Trade projects through the framework provided by the Pacific Aid for Trade Strategy.

“These projects cover a range of areas that will increase our ability to trade, such as improved customs management, support for value chain development and tourism services, and the development of national trade policies,” said Minister ‘Akolo.

“But this is just a start.”

Minister ‘Akolo emphasised that development of improved infrastructure in transportation and communications was more pressing for many island nations.

“In particular, our ports and wharves must be comprehensively improved if we are to move beyond being exporters of basic commodities.

“Many ports in the region are unable to support even a small increase in the volume of export.

“Without more effective ports, we simply cannot increase our trade with the world.”

Minister ‘Akolo added that the development of infrastructure is made more costly and difficult due to Pacific islands’ remoteness.

No to proportional aid

The Secretary General of the Pacific Islands Forum Secretariat, Tuiloma Neroni Slade, remarked that while donor aid flows are generally proportional to the size and population of recipient countries, this calculation is failing the Pacific.

“We need to recognise that small populations cannot mean small, or proportional aid,” said Mr Slade.

“There are high fixed costs in the provision of assistance to small island states, particularly in the development and maintenance of infrastructure.

“To create effective trade outcomes, we need bigger, bolder, longer-term and more innovative approaches.”

Links to EPA and PACER

The Pacific Aid for Trade Strategy recognises the importance of trade negotiating capacity for the region.

“One of the lessons learned from the global economic crisis in our region was that we need to increase and diversify our trade if we are to build strong and robust economies,” said Mr Slade.

“Pacific island countries expend considerable time and resources to negotiate trade agreements with key partners, including the Economic Partnership Agreement with the European Union and PACER Plus with Australia and New Zealand,” explained Mr Slade.

“It is vital that these agreements result in tangible trade outcomes. To do this, Pacific island countries need assistance to expand their supply capacity and build a strong and capable private sector that can take advantage of new market access opportunities.”

The Pacific Aid for Trade Strategy prioritises several initiatives that provide negotiation support in these areas.

“When European countries restricted the sale of Kava products, it was done without appropriate evidence and with no regard to the destruction of the livelihoods of Pacific communities that would result. Our inability to date to remedy the situation is an excellent example of our region’s need for greater support on trade issues,” says Mr Slade.

“Countries simply don’t have the resources or expertise to fight these bans, to the detriment of our national economies.”

Mr Slade added that the Pacific Aid for Trade Strategy helps the Pacific focus on those critical challenges, providing mechanisms to develop and prioritise initiatives to address them.

Pacific ACP States include all Forum Island Countries: Cook Islands, Federated States of Micronesia, Fiji, Kiribati, Nauru, Niue, Palau, Papua New Guinea, Republic of the Marshall Islands, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu.

ENDS

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