16 de Diciembre de 2018
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Colección: Trends for a common future
Autor: Sidney Weintraub
Título: Technical Cooperation Needs for Hemispheric trade Negotiations

III. Development Program Needs

Providers of assistance and training to help the LAC countries get ready for free-trade negotiations should include not just international trade agencies but also other institutions concerned with overall national development. In addition, the persons being trained should not come exclusively from trade agencies.

This requirement of technical cooperation already has been recognized at the hemispheric and international level. The IDB’s proposed line of credit for sectoral investment and technical cooperation for trade development envisages assistance for institutional evaluation and diagnosis as well as training for trade negotiations themselves. This line of credit would be extended on what can be called a fast-track basis; the credits, as the word implies, would be reimbursable. The diagnosis would include an evaluation of the capacity (human and financial) of national institutions; the interaction among national institutions and between them and the private sector; an examination of information systems in the country; and mechanisms to support trade development and diversification. While the specific line of credit is not operational—that is, the fast-track aspect is not in place—a number of countries have expressed interest in using regular IDB credits for the same purposes. These countries include, as this is written, Argentina, Bolivia, Colombia, the Dominican Republic, and Uruguay. The design of the activities included in each program will entail different levels of sophistication depending on the development situation of the country.

The ideas built into an ongoing IDB project to support Paraguay to participate more effectively in international trade negotiations are also comprehensive, combining developmental, institutional, evaluative, and negotiating elements. Among other objectives, the project is designed to train nationals to set priorities for different aspects of trade negotiations, develop technical data bases, improve information dissemination and coordination among internal players, public and private, and train the trainers. The Paraguay project (TC-96-10-503), which is on a grant basis, will extend over two years, whereas TC programs for trade of other institutions are short-term, from days to a few weeks. The IDB trade-related assistance program is manifestly more ambitious than the others.

An integrated framework to supply TC has been established that includes the WTO, the United Nations Conference on Trade and Development (UNCTAD), and the International Trade Center (ITC), all trade-related institutions, but also the World Bank, the International Monetary Fund (IMF), and the United Nations Development Program (UNDP), which are financial/development institutions. Its program includes institution building to handle trade issues, development of “think-tank” capacity, promotion of more effective coordination among relevant government departments, and the creation of a regulatory and policy framework to encourage trade and investment. The integrated framework is intended to train officials in the least-developed countries and does not, therefore, include most of the LAC area. However, it envisages many elements similar to the proposed IDB credit line—although it is by no means as comprehensive or long term.

The trade-related institutions, international and national, that engage in TC to enable developing countries to participate in trade negotiations quite naturally emphasize the direct trade aspects of their offerings. These include training trade personnel in negotiations, preparing nationals to analyze key sectors involved in the negotiations, equipping nationals of the countries to evaluate the impact of trade proposals, and examining national laws and regulations that impinge on trade. Linkages between these institutions and those more concerned with national development programs, whether these collaborations are explicit (as in the integrated framework) or informal, are essential for a number of tasks. The IDB line of credit is noteworthy because it places responsibility for the trade-related assistance directly in a development agency.

Some trade issues which require the participation of development agencies are the following:
  • Many LAC countries rely heavily on tariff revenues to finance large segments of their budgets. Under an FTAA, these revenues will diminish for intra-hemispheric trade over the transition period chosen and disappear completely for such trade at the end of the transition phase. Assistance will be needed to devise alternative revenue-raising (tax) programs. Reducing the tax function of tariffs may be desirable in its own right to benefit consumers and importers of intermediate products, but is essential if governments are to function when the FTAA is in full operation.
  • Development policies that place emphasis on the growth of exports—policies which are now the norm throughout the LAC region—require improved infrastructure and marketing facilities. Much funding for these needs will have to come from international development banks and their participation in the TC program for the FTAA is therefore highly desirable.
  • Increasing the role of tourism as an export, for which a number of LAC countries seeking trade assistance may have a comparative advantage, requires many related activities (development of roads, airports, seaports, food supplies, health facilities, trained personnel, and more) and these needs should be considered alongside other trade-related issues.
  • The suppliers of trade-related technical assistance often include training on altering and/or devising the regulatory system to encourage trade and investment. The regulatory structure, however, cannot be confined to just these aspects, but must extend as well to the encouragement of national development, which is not separable from trade outcomes.
  • Investors are reluctant to risk their resources in countries with inadequate judicial structures and many countries need assistance in this field. This surely is desirable in its own right.
  • Efficient systems to obtain and manage data are essential for effective trade negotiation and to monitor trade developments. Many LAC countries need assistance for both hardware (computers) and software. It is evident, however, that these information management needs extend well beyond the trade area and should be considered in thinking about national development programs.
The foregoing discussion is not intended to be a complete compilation of LAC needs for TC with respect to national development programs that grow out of the trade discussion. Making the list more comprehensive would require getting deeply into overall development policy and that is not needed here. The purpose here is to note that trade and trade-related TC by its very nature requires complementary assistance in related development fields if the exercise is to be fruitful.