Over the past decade, aid and trade have become increasingly enmeshed as trade is seen as a key element of developing countries’ development strategies. The role of liberalized trade and investment regimes in ending global poverty is highly politicized as the analysis of development agencies, academics and civil society organizations continues to be dismissed by organizations such as the WTO.
The increasing centrality of trade as a means for development received its clearest articulation in the World Trade Organization’s (WTO) Doha Development Agenda that was the result of the November 2001 WTO Ministerial in Doha, Qatar. This declaration laid out a framework for the WTO’s new negotiations. With the majority of WTO Members as developing countries, these negotiations were to “seek to place their needs and interests at the heart of the Work Programme.”1
Negotiations since that time have largely failed developing countries as “their needs and interests” in more equitable trade relations and protection for those living in poverty ignored.2 Rather, the WTO has used Trade-Related Capacity Building (TRCB)3 as the key element of its push for the full integration of developing countries in the global economy through liberalized trade and investment and to build political support for the launch of negotiations on new issues of concern to industrial countries in Europe and North America.
The spirit of the Development Agenda, has been relentlessly undermined by donor countries’ reluctance to make development friendly concessions through Special and Differential Treatment (S&DT) or through the support of developing country negotiating positions. Rather, donors have used TRCB as their primary “concession” to development. At Doha there were references to TRCB in 12 paragraphs of the ministerial declaration.4 The importance the WTO and donors have placed on TRCB warrants further analysis. The ways in which TRCB is delivered, the organizations that are delivering it, and the types of capacity it is building will have significant impacts on the role of trade as a means for poverty reduction.
The importance trade and development officials from industrial countries are placing on TRCB is evident in the significant funding levels that are now flowing towards these programs. In their review of TRCB activities, the Canadian Council for International Co-operation has noted that although it is difficult to get an accurate and comprehensive picture of the total funding picture, “[e]stimates for total global funds committed to TRCB in 2001 are [US$466 million] in support of trade policy and regulations, [US$1,016 million] in support of trade development, and [US$25.7 million] to the four multilateral trade capacity providers.”5 Bilateral donor support in 2001 for trade policy and regulations was US$269 million of the global total and US$703 million in support of trade development of the total contributions.6 The funding situation has increased dramatically since 2001 as donors continue to channel increasing funding towards TRCB programming. Although the WTO’s TRCB Database reveals a slight decrease in total TRCB funding between 2001 and 2002, the funding commitments from several major donors, including the European Commission, and the World Bank, were increased in 2003 and expectations are that commitments will continue to increase throughout the year.7
There is no doubt that trade can play a significant role in poverty reduction strategies and national development goals, but increasing trade alone does not reduce poverty. Trade is a means for ending poverty, not an end in itself.
This Reality Check provides an overview of TRCB and highlights the orientation and goals of current approaches to capacity building. By examining what is covered by TRCB and some of the major programmes, we will be able to highlight the major weaknesses in its design and delivery. These weaknesses have led to the conclusion that funding for TRCB, as currently conceived and used by donor countries, is off-target if it is to truly make a significant contribution towards reducing poverty in developing countries. Recommendations will be advanced for refocusing TRCB in order to strengthen capacities in developing countries to understand how trade policies influence and can form an element of strategies to improve the livelihoods of those living in poverty.
- WTO, 2001.
- See for example, CCIC, 2003, March.
- It should be noted that there are several terms used for what will commonly be referred to as Trade-Related Capacity Building. Trade-Related Technical Assistance (TRTA) and Trade-Related Technical Cooperation (TRTC) are encompassed by the broad term of TRCB, whose programming includes TRTA and TRTC activities.
- Commitments on TRCB are made in paragraphs 16, 21, 24, 27, 33, 38 to 43 of the Doha Ministerial Declaration. WTO, 2001.
- CCIC, 2003: 30. Canadian $ converted to US$ using the standard conversion rate of C$1.56 to US$1.