For the Graduate School of International Studies, Korea ...moc.gov.kh/tradeswap/userfiles/file/uploadedfiles/Gallery/05. AFT... · For the Graduate School of International Studies,

By Sven Callebaut,Aid-for-Trade Adviser

MoC

For the Graduate School of International Studies,Korea University – 02 Feb 2016, MoC

Objective

By the end of the session, participants should be able to appreciate Cambodia’s participation and utilization of the Aid For Trade Initiative as a catalyst for economic development and poverty reduction

Contents

Session 1: What is Aid for Trade ?Session 2: Effectiveness, Efficiency, Good GovernanceSession 3: AFT in Asia PacificSession 4: AFT in CambodiaSession 5: New AFT Trends

SECTION 1 - WHAT IS AID FOR TRADE (AFT) ?

What is ODA ?

ODA (Official Development Assistance) is composed of grants or loans to countries and territories on the DAC List of ODA Recipients and to multilateral agencies which are:

undertaken by the official sector; with promotion of economic development and welfare

as the main objective; at concessional financial terms (if a loan, having a

grant element of at least 25%). In addition to financial flows, technical co-operation is included in aid.

Pledges, commitments and disbursements

A pledge is usually a political announcement of intent on behalf of a donor to contribute a certain amount to a certain area.

A commitment is a firm obligation, expressed in writing and backed by the necessary funds, undertaken by an official donor to provide specified assistance to a recipient country or a multilateral organisation.

A disbursement is the release of funds to or the purchase of goods or services for a recipient; by extension, the amount thus spent.

Aid for Trade: Definition• AfT is a global initiative, established in 2005,

which aims to strengthen the capacity of developing countries to better participate in and benefit from the global trade system by making trade a means to achieve sustainable development and poverty reduction.

• From a financial point of view, AfT refers to all official development assistance (ODA) finance for trade development, independently from the economic sectors it is channelled to

Aid or Trade: what is it about ?

Aid for Trade is about:

strengthening developing countries’ productive capacity;tackling their supply side constraints; andaddressing their needs in trade-related

infrastructure.

Aid for Trade CategoriesAid for Trade was given a fairly broad definition based on the following five categories:

1. Trade Policy and Regulations; 2. Trade-related Infrastructure 3. Building Productive Capacity and Trade Development;4. Trade-related Adjustment;5. Other Trade-related Needs.

SESSION 2 – ENSURING EFFECTIVENESS, EFFICIENCY AND GOOD GOVERNANCE

Aid For Trade Funding Mechanisms

Bilateral and multilateral donor finance Trade Sector Wide Approach (SWAp) Newly developed financing instruments such as trust

funds. The national budget: developing countries also allocate

AfT finance by allocating financial resources to trade-related activities;

Private sector funding (eg PPP)

Note: These different channels for AfT financing do not exclude but rather complement one another. They can be accessed individually, independently, at different times and in no pre-established order

SWAp represents a Programmatic Approach

A set of interventions aimed towards a

shared program goal

Program ApproachA set of

unrelated projects

Project Approach

The Trade SWAp is based onthe RGC-DPs commitments toincrease Aid for TradeEffectiveness:

1. Ownership2. Alignment3. Harmonization4. Managing for Results5. Mutual Accountability

OWNERSHIPThe Royal Government of Cambodia exercises full ownership and leadership over its trade policies, strategies and implementation measures

The Royal Government commits to:

• Prepare and update a Trade Integration Strategy, develop a monitoring framework and carry out an annual review of its implementation. Develop and update Trade SWAp Pillars road-maps in consultation with all stakeholders and align the national budget to support their implementation.

• Setting up the Department of International Cooperation in the Ministry of Commerce with the mandate to serve as the secretariat to the Steering Committee on Trade Development and Trade-Related Investment.

Development Partners commit to:

• Respect RGC ownership and leadership of its trade reform agenda, and to provide coordinated support to strengthen institutional and human capacity of ministries and agencies to achieve the targets of Trade SWAp Pillars.

ALIGNMENTDevelopment Partners will base their overall support on RGC's strategies, institutions and procedures


• Put in place and maintain the Trade SWAp to increase transparency and accountability and to enhance aid effectiveness, by settingobjectives, strategic outputs, and monitoring indicators as well as identifying any relevant support required, including existing Government resources and AfT.

• Seek synergies between the Trade SWAp and the Public Financial Management Program and the Public Administration Reform and lead efforts to promote long-term capacity development by undertaking capacity assessments and developing comprehensive capacitydevelopment strategies and actions for the trade sector.


• Base their overall support on the priorities outlined in the Trade SWAp road-maps for each Pillar and provide coordinated support to strengthen Trade SWAp's institutions, systems, and procedures.

• Avoid the creation of new parallel structures (PIU/PMUs) and make increasing use of Trade SWAp’s institutions, systems and procedures.

HARMONIZATIONDevelopment Partner's AfT is more harmonized, transparent and collectively effective


• Continue to work with the WTO General Council and Secretary General, in order to increase AfT flows to Cambodia and to improve harmonization and alignment, including within the Enhanced Integrated Framework.


• Within each Trade SWAp Pillar, develop and adopt to the maximum extent possible shared analyses and monitoring frameworks, common arrangements and simplified procedures for programs/projects management, including reporting and auditing.

• Increase the proportion of AfT channelled through the Trade SWAp and reduce the number of separate, duplicative missions and diagnostic reviews and studies.

MANAGING FOR RESULTSManaging resources and improving decision-making for results


• Develop and Implement a framework to monitor the implementation of each Trade SWAp Pillar and prepare an annual progress review to be used to manage for results by reprioritizing and reallocating AfT, linking priorities to budget processes, to achieve targeted development results.


• Realigning to the maximum extent possible their programs and projects to the reprioritized activities in the Pillars’ road-maps based on annual implementation reviews.

MUTUAL ACCOUNTABILITYThe Royal Government and Development Partners are accountable for development results


• Strengthening the role of all trade stakeholders in the planning and implementation of the Trade SWAp, making available information on the use of AfT to enhance transparency and accountability.


• Provide timely, transparent, and comprehensive information on AfT flows to improve transparency and accountability and to promote the alignment of AfT resources with the Trade SWAp.

SESSION 3 – AID FOR TRADE IN ASIA PACIFIC

TOP 20 PROVIDERS OF AID FOR TRADE (DISBURSEMENTS)

TOP 20 RECIPIENTS OF AID FOR TRADE (DISBURSEMENTS)

AFT in Asia and the Pacific (1)

• In 2013, the region was the second-largest regional recipient of AFT ($14.9 billion of total disbursements).

• The top country recipients were Viet Nam ($2.6 billion), India ($2.1 billion), Afghanistan ($1.2 billion), and Bangladesh ($903 million).

• But on a per capita basis, Pacific economies are the largest AfT recipients.

Source: ADB. 2015. Aid for Trade in Asia and the Pacific: Thinking Forward About Trade Costs and the Digital Economy

Aid For Trade in Cambodia, Lao PDR and Myanmar

SESSION 4 – AID FOR TRADE IN CAMBODIA

Making AFT work for development involves:

1. National Development Strategies 2. Institutional set-up

3. Dialogue with Development Partners4. Adherence to Aid Effectiveness Principles

4Trade SWAp Five

Development Goals

Twenty Strategic Outcomes

# of Actions % of TotalStatus of Work

No work 56 42%Work under way 74 55%Completed 4 3%Total: 134 100%

Status of TANot needed 31 23%Ongoing 62 46%TA needed 41 31%Total: 134 100%

5

Cluster 1: Trade policy, sector policy and legal and regulatory reform

Cluster strategic objectives Trade SWAp Roadmap Outcomes1. Complete trade-related key legal and

regulatory reformsOutcome 1: Trade policy, legal reform and trade negotiations

2. Strengthening implementation of trade-related laws and regulations through strengthening of implementation and enforcement capacity of relevant line ministries and agencies

Outcome 6: Establishing a trade-supportive framework forintellectual property rights

3. Formulate a trade policy 2015-2025 to guide Cambodian negotiators

Outcome 1: Trade policy, legal reform and trade negotiations

4. Develop sector policies based on value chain analytical work

Outcome 18: Mainstreaming trade

Start-up projects (Low-hanging fruits)

1) Accelerate implementation of the work program on legal reform 2012-20152) Analyze non-tariff measures included in the National Trade Repository3) Strengthen enforcement of geographical indications4) Formulate a trade policyEstimated resource needs (2016-2020) USD 4-5 million

Cluster 2: Trade facilitation and Transport logistics

Cluster strategic objectives Trade SWAp Roadmap Outcomes

1. Implement Cambodia National Single Window (NSW)

Outcome 2: Trade facilitation

2. Formulate and Implement National Trade Logistics Plan

Outcome 3: Trade logistics

3. Implement ATIGA and the WTO Trade Facilitation Agreement (“Bali Package”)

Outcome 2: Trade facilitationOutcome 1: Trade policy, legal reform and trade negotiations

Start-up projects

1) Review Arrangements among Cambodian Border Agencies and with Vietnamese and ThaiCounterparts Agencies to Create Shared Border Point Offices/Facilities at Key Crossings

2) Assessment of Other Trade-Facilitation-related Documents not yet Computerized

3) Support Initial Work on National Trade Logistics Plan

4) Institutional Arrangements and Assistance Modalities for TFA Implementation in Cambodia

Estimated resource needs (2016-2020) USD 5 million

Cluster 3: SPS and other Quality Systems for Trade


1. Establish a coherent WTO- and ASEAN-compatible legal and regulatory framework for SPS and other quality systems

Outcome 4: Strengthened capacity of exporters tomeet technical standards and SPS requirements.

2. Enhance systems and structures to develop adoption of SPS standards and practices throughout the entire food value chain from “farm-to-fork”, including strengthening SPS practices at farm, producer, and retailer levels

Outcome 4: Strengthened capacity of exporters tomeet technical standards and SPS requirements.

3. Achieve international accreditation of Cambodian laboratories for relevant parameters

Outcome 4: Strengthened capacity of exporters tomeet technical standards and SPS requirements.Outcome 17: Bridging the skill gap for exports.

Start-up projects

1. Amend and adopt a WTO-compliant Law on Standards2. Complete drafting of Food law and assemble group of experts to eliminate contradictions and lack of

coherence in current SPS framework.

3. Adopt 250 or ASEAN harmonized standards not yet adopted by CambodiaEstimated resource needs (2016-2020) USD 5-7 million

Cluster 4: Private Sector structuring


1. Private sector Associations are able to articulate positions and dialogue with Government through the G-PSF or other venues

Outcome 10: Processed food.Outcome 12: Milled rice.Outcome 13: Cassava.Outcome 14: Rubber.Outcome 16: High value silk.

2. The private sector and Government develop PPP arrangements to narrow the labor skill gap, invest in common facilities, or support other investment in “public goods”

Outcome 7: Garments.Outcome 9A: SEZ.Outcome 15: Tourism.

3. The private sector increases capacity in marketing, promotion and branding for exports

Outcome 7: Garments.Outcome 8: Footwear.Outcome 10: Processed food.Outcome 12: Milled rice.

4. The private sector is able to meet international SPS and other quality standards

Outcome 4: Strengthened capacity of exporters to meettechnical standards and SPS requirements.Outcome 7: Garments.Outcome 14: Rubber.Outcome 17: Skill gap

Start-up projects1. Develop culture of professions in Tourism2. Develop/strengthen collective branding in High-value fragrant rice, garments, and high-value silk.Estimated resource needs (2016-2020) USD 5-6 million

Cluster 5: Development of inclusive export value chains


1. Develop export capacity in priority sectors identified by the Government, beginning with the priority sectors identified in CTIS 2014-2018 and the 2015 Industrial Development Policy

Outcome 9B: Light manufacturing assembly.Outcome 10: Processed food.Outcome 12: Milled rice.Outcome 13: Cassava.Outcome 16: High value silk products

2. Develop a business and investment environment supportive of the development of Inclusive Value Chains including through deepening backward linkages

Outcome 5: Investment environment for exports.Outcome 9A: SEZ.

Start-up projects

1. Prepare Draft Project Document(s) for Submission to EIF or Other Interested Development Partners.

2. Support Implementation of Laws on Investment and SEZ once adopted.

3. Develop Relevant Investment Promotion Tools to Attract New Investment in Key Priority Export ValueChains

Estimated resource needs (2016-2020) USD 5-7 million

1. Trade Policy, Sector Policy, Legal and Regulatory Reform:

2. Trade Facilitation and Transport Logistics:

3. SPS and Other Quality Systems for Trade:

4. Private Sector Structuring:5. Development of Inclusive Value Chains: 6. Trade Mainstreaming and

Management of Aid for Trade: 7. Skills for Exports: 8. Investment Environment, Integration in

Regional Value Chains, Backward Linkages:

9. Rural Development for Exports including Extension Services, Cooperatives Development, Surveillance Services:

10.Access to Finance:

1. EU, GIZ

2. EU, WB, USAid

3. EU, UNIDO

4. ADB5. EU, ESCAP, IFAD6. EIF, EU

7. SIDA, AFD, CBI8. JICA, EU, GIZ

9. IFAD

10. ADB

1. MOC

2. WB/GDCE

3. MAFF/MOC

4. MIH5. MOC/MAFF6. MOC

7. MOLVT/MOC8. CDC

9. MAFF

10.MEF

ឧបសម�័ន�ទី ៣

Project Approval Process under TDSPIAs, Line Ministries, BMO

Pillar roadmaps

IAs or RGC needs/Action Plan/Strategy

DICOTechnical Appraisal

Pillar WGP1, P2, P3

ICEndorsement

SSC-TD-TRIApproval

No

Yes

Yes

MoUImplementation (DICO-IAs)

Upgrade/Modify

Upgrade/Modify

No

No

Yes

TDSP DPs are consulted through WB at IC meeting

TDSP DPs are invited to join WB to confirm NOL

SESSION 5 – EXAMPLES OF SUCCESSFUL AID-FOR-TRADE PROJECTS

AFT Implementation ModalitiesGo

vern

men

t im

plem

enta

tion

TRAC/TDSP

EIF

ADB

Direct implem

entation

USAID, AUSAID

KOICA, JICA

UN agencies

“South Korea's Ministry Of Oceans and Fisheries (MOF) will co-operate with local companies to develop a grain terminal in Cambodia”. May 11

“The South Korean government will double the number of Cambodian migrant workers who are granted permits to take up employment in the country’s manufacturing, construction and agriculture sectors each year, officials said on Monday”. March 26

“The Government has received a grant of $5.5 million from the Korea International Cooperation Agency (KOICA) to conduct a feasibility study on how the Kingdom’s waterways and ports can be better utilized for transport”.May 1

“KOICA collaborated with the Korea Trade-Investment Promotion Agency to launch an incubator program for Korean social entrepreneurs. MYSC is now training six teams sent to Cambodia and Vietnam to develop their business models”. March 13

No Project Agency ApprovedBudget

ActualExpense

Balance %Expense

1 Information Dissemination on Top Ten Products TPD 48,211 39,880 8,331 83%

2 Export training and SME training TPD 34,899 53,600 1,298 98%

3 Value Chain Information Unit TPD 263,208 202,583 60,625 77%

4 Development of a Trade Curriculum RSA 123,650 122,356 1,293 99%

5 Capacity Building for Dept of Trade and Statistics DTSI 137,540 90,343 47,196 66%

6 Customs Valuation GDCE 50,000 44,232 5,768 88%

7 Awareness Program on Customs GDCE 95,000 21,001 73,998 22%

8 GDCE Capacity Enhancement Programme

GDCE 613,105 269,555 333,549 44%

9 Strengthening Institutional Risk Management

Camcontrol150,386 143,723 6,663 96%

10 Enhancing IP Teaching and Training NCIPR 110,000 110,539 (539) 100.49%

11Study on minimum wages & minimum wages negotiation in garment sector

CANFEBA $46,000 0 $46,000 0

12 Raising awareness on the Investment law CDC $195,860 93,740 $102,120 47%

TOTAL: 686,283

No Date Proposal IA Pillar Focus (P) Component focus (C) Budget

1 01 Jul 2010(18 months)

Rule of Origin: Operational Procedures & Training

D/MULMoC

P1: Legal Reform C1-C: Other legal reforms & RGC WTO obligations

$303,046

2 14 Jul 2010 (18 months)

Strengthening the capacity of Institute of Standard of Cambodia (ISC)

ISCMIME

P1: TBT, SPS, & Trade Facilitation

C1-A: TBT & SPS $384,264

3 15 Oct 2010(24 months)

Support drafting E-Commerce Law LADMoC

P1: Legal Reforms and Cross-cutting Issues &P3 : Strengthening Key MOC Depts & Key MOC

Functions

C3: Human & Institutional Capacity Building

$164,923

4 29 Dec 2010(15 months)

Reviewing of Commercial Laws D/N&CMoC

P1: Legal Reforms and Cross Cutting Issues

C1 : Trade Policy Formulation and Implementation

$219,949

5 29 Dec 2010(18 months)

Strengthening MoC core DR functions through the DoP Institutional and

Individual Capacity

DoPMoC

P3: Capacity Development for Trade

C3: Strengthening institutional and human capacity

$234,540

6 09 Jun 2011(9 months)

ICT Master Plan Implementation GDITMoC

P1 & P3 C1-B: Trade Facilitation $2,608,876

7 11 Jul 2011(10 months)

Implementing Agency Capacity Enhancement Program

RSAOCM

P1 & P3 C1-B: Trade Facilitation $605,125

8 11 Jul 2011(8 months)

The development of completed drafts of national standards for rice and

strengthening the capacity of conformity assessment body-Phase I

ISCMIME

P1 C1-C: Policy Formulation and Implementation in the area of

SPS and TBT

$360,216

Projects under Implementation

No Date Proposal IA Pillar Focus (P) Component focus (C) Budget

9 30 Sep 2011(6 months)

Better Quality and Safety of Fish and Fishery Products for Improving Fish

Trade Development in Cambodia

FiAMAFF

P2 C1-C: Policy Formulation and Implementation in the area of

SPS and TBT

$1,262,708

10 16 Aug 2012(15months)

Development of a stronger National system for IP generation, protection,

administration and enforcement.

DIPR/MoC P1 C1-C: Trade Policy Formulation $148,491

11 28 Sep 2012(15 months)

Support to G-PSF CCC P2 B. Trade Support Institution

C2. Increase transparency & user feedback mechanism on

trade-related processes.

$260,338

12 12 Jul 2012(18 months)

GDCE ASYCUDA World System Project GDCE P1 C1-B: Trade Facilitation $1,398,753

13 20 Jun 2014(11 months)

Streamlining and Automation of Business Registration

DBR P1 C1-B: Trade Facilitation $399,398

14 20 Jun 2014(11 months)

Automation of Phyto-Sanitary Certificates

GDA/MAFF P1 C1-B: Trade Facilitation $392,800

15 01 Jul 2014(11 months)

Trade Training & Research Institute(TTRI)

TTRI/MoC P3: Capacity development for trade

C3: Strengthening institutional & human capacity

$500,000

TOTAL $9,243,427

Project under Implementation (Cont..)

EIF Tier 2: Cambodia Export Diversification and Expansion Programme (CEDEP)

CEDEP IExports of Milled Rice, High Value Silk, SWAp M&E

Approved: August 6, 2012Funds available: USD2’407’714 (EIF), USD975’715 (others)Implemented by: IFC (rice), ITC (silk), MoC/DICO (M&E)End date: 2015-2016 (*)Core team: 10 membersMid-Term Evaluation: October 2014

CEDEP IIExports of Cassava, Marine Fish products, RACA, SWAp M&E

Approved: January 13, 2014Funds available: USD3’283’589 (EIF), USD3’099’055 (**)Implemented by: UNDP (Cassava), UNIDO (Fish), Shift 360 (RACA), MoC/DICO (M&E)

End date: 2017(*)Core team: 15 membersMid-Term Evaluation: October 2015

(*): Depends on actual MoU signature date - (**) Subject to change

CEDEP Contribution to SWAp

• From Trade SWAp Pillar 2, CEDEP targets:

Milled Rice (CEDEP I) IFCHigh Value Silk (CEDEP I) ITC Cassava (CEDEP II) UNDPMarine Fisheries (CEDEP II) UNIDOTourism (CEDEP II) SHIFT 360 (NGO)CornGarmentProcessed Food (CEDEP III – PLANNED)Manufacturing Assembly Clusters (CEDEP III – PLANNED)

25th IC, 12/19/2012 42

25th IC, 12/19/2012 43

25th IC, 12/19/2012 44

25th IC, 12/19/2012 45

SESSION 6 - NEW AFT TRENDS IN ASIA & THE PACIFIC

Three growing trends in AFT

• Participation in Global Value Chains

• Regional AFT projects

• Private Sector Participation in AFT

Two Key Areas for future AFT funding

Trade Facilitation

• Improved customs, immigration, quarantine, and security policies

• Harmonized standards, policies, and regulations

• Better logistics• Improved governance and

institutional capacity• Most importantly: WTO

Agreement on Trade Facilitation

Trade Finance

• Short-term: loan guarantees to mitigate risk

• Stronger and deeper domestic financial markets

• Better access to international financial markets

• Innovative financing products• Financial education for

exporters

Summary(your “take away”)

1. Cambodia continues to be a success story by developing home-grown solutions using EIF tools

2. Key is to show impact, link with national development and poverty reduction goals, provide value for money

3. Key dimensions are NDS, institutional set-up and enhance dialogue (as partners)

4. Steady increase of AFT resources available but reduced visibility beyond 2015

5. SWAp is the enabling environment, not a funding modality: mobilize extra resources to make it last.

For more information on Aid-For-Trade:

Aid-for-Trade Cambodia:www.moc.gov.kh/tradeswap

SWAp Facebook Page:www.facebook.com/CambodiaTradeSWAp

WTO website (AFT Page):www.wto.org/english/tratop_e/devel_e/a4t_e/

EIF Websitewww.enhancedif.org

OECD Website (Aid-for-Trade statistics)www.oecd.org/trade/aft/

http://www.moc.gov.kh/tradeswap

http://www.facebook.com/CambodiaTradeSWAp

http://www.wto.org/english/tratop_e/devel_e/a4t_e/

http://www.enhancedif.org/

http://www.oecd.org/trade/aft/

Thank You for your attention!