1. THE TRADE POLICY PROCESSES IN UGANDA Presentation bySilver OjakolDepartment ofExternal Trade Kampala, 15 thOctober 2008

2. Organization of the Presentation

Background to formulation of the Trade Policy

Process of writing the draft Policy

Presentation of the Draft National Trade Policy (NTP)

Next steps finalization and implementation

3. Background to formulation of the Policy

Desire to formulate and consolidate a Trade Policy arose out of a realization by Government that there was no single coherent Trade Policy document to guide players in the trade sector, especially the private sector

Trade and trade-related policies existed in various documents

4. Background to formulation of the Policy (contd)

Most of these policies were not up-to-date, lacked consistence and coherence

Government therefore decided to consolidate, streamline, update and formulate the National Trade Policy; and avail a single document to guide players in the trade sector

5. Process of writing the National Trade Policy

The process began in 2004, with a Sub-Committee selected from within members of the Inter-Institutional Trade Committee (IITC) tasked to develop Terms of Reference to guide preparation of Background documents

• • The IITC is a multi stake holder forum

Sub-committee members drawn from the public sector, private sector and civil society

6. Process of writing the National Trade Policy (contd)

A consultant was recruited to prepare a Background to Ugandas Trade Policy; document was to examine existing trade and trade related policies, the gaps therein, institutional framework for trade policy, gather and document stakeholders views on trade policy, and recommend what a new Trade Policy should entail

7. Process of writing the National Trade Policy (contd)

Consultant worked under supervision of MTTI

Numerous stakeholders were consulted, either individually or as a group; included Government Ministries and Agencies including those affiliated to MTTI, Parliament, private sector, academia, and civil society

Result of this process:The Background to Ugandas National Trade Policy

8. Process of writing the National Trade Policy (contd)

MTTI constituted a National Trade Policy Drafting Team to study the Background document and stakeholders views, and draft a National Trade Policy for wider discussion

The Team produced a draft that was later discussed by a wider group of technocrats in the Ministry, and MTTI political leadership

9. Process of writing the National Trade Policy (contd)

The Drafting Team incorporated the input of all these discussions into the draft Policy

An improved version of the Policy was then sent to selected key stakeholders (e.g. MFPED, NPA) for further consultations; in addition to further capturing key stakeholders input, this process was meant to prepare ground for implementation

10. Process of writing the National Trade Policy (contd)

A number of comments/views were received and incorporated into the draft Policy before it was circulated for discussion at the final national consultation the 2 ndNational Trade Sector Review Conference (NTSRC) and DTIS validation Conference held on 2-4 thOctober 2006

• • The NTSRC involves stakeholders in the IITC as well as the local governments, Parliamentarians, development partners

11. Process of writing the National Trade Policy (contd)

After discussion of the Policy at the Conference, a five-man team (MTTI -3, MFPED 1, & Technical Advisor UPTOP - 1) held a two-day retreat to incorporate the recommendations of the Conference into the Policy; clean it up; and finalize it

12. Process of writing the National Trade Policy (contd)

After the finalization, the Drafting Team thought it prudent to present the final document to Honourable Ministers in MTTI in preparation for submission of the Policy to Cabinet for consideration

The whole process of writing the Policy was supported by the EU through UPTOP

13. Presentation of the National Trade Policy:Key considerations

context within which the Policy is formulated, and a discussion of trade as a development tool

Situational analysis sectoral composition of GDP, direction of trade, existing trade and trade-related policies, Ugandas trade in the global context

14. Presentation of the National Trade Policy:Key considerations (Contd)

Guiding Principles

Priorities of the NTP

Requirements for implementation of the NTP

15. Presentation of the National Trade Policy:Key Considerations (Contd)

Specific Policy Interventions Domestic Trade, International Trade, Trade Policy Synergies and Complementarities/cross-cutting policies

Implementation of the NTP core functions of MTTI and DCOs; Ministries with direct roles to play

16. Presentation of the National Trade Policy:Key considerations (contd)

The NTP is formulated within the framework of other National Development Policies and Strategies, particularly the PRSP the PEAP 2004/5-2007/8, The Medium Term Competitiveness Strategy (MTCS), The Plan for Modernization of Agriculture (PMA) and Vision 2025

The findings of the Diagnostic Trade Integration Study (DTIS) has also provided significant guidance.

17. Presentation of the National Trade Policy:Key considerations (contd)

International Development aspirations & commitments such as the MDGs as well as international trade agreements to which Uganda is a signatory have also provided significant input and guidance in drafting the National Trade Policy

The NTP theme:Trading Out of Poverty, Into Wealth

18. Presentation of the National Trade Policy:Key Considerations (contd)

Draft Policy acknowledges that the trade sector is very dynamic, especially in the context of a fast globalizing world under the auspices of the multilateral trading system

19. Presentation of the National Trade Policy:Situational Analysis

Situational analysis notes that imports have been growing faster than exports, resulting into a wider trade imbalance.

Most of these imports do not necessarily feed into the production process (i.e. are consumables), a situation which is unsustainable and undesirable

20. Presentation of the National Trade Policy:Situational Analysis (contd)

If not corrected, this would contribute to a widening trade imbalance and continued lack of coordination between the trade and production sectors such as the agricultural and industrial sectors

Countrys major trading partners are the EU and COMESA

21. Presentation of the National Trade Policy:Situational Analysis (contd)

Whereas the percentage share of exports to the COMESA has increased, the trade imbalance between Uganda and the COMESA region has been widening

Implication of this is that limited domestic capacity to tap opportunities created by regionalism and multilateralism is developed

22. Presentation of the National Trade Policy:Situational Analysis (contd)

Development of domestic trade is an integral component of the NTP

Henceforth, Government to pursue trade-led development

Export sector still faces both tariff and non-tariff barriers

23. Presentation of the National Trade Policy:Situational Analysis (contd)

Some of the barriers to growth in trade are exogenous while others are endogenous

The NTP and other trade-related policies should therefore focus on both internal and external factors to boost the countrys capacity to use trade as a development tool

24. Presentation of the National Trade Policy:Situational Analysis (contd)

Relationship between trade and poverty reduction is analyzed

Analysis indicates that the NTP would, inter alia, have to address problems in the agricultural sector, especially the falling agricultural commodity prices, & managing trade liberalization & its effects in order for trade to be a tool of poverty reduction

25. Presentation of the National Trade Policy:Situational Analysis (contd)

Importance of complementary policies comes out in the situational analysis

Trade in the context of globalization is analyzed, and the conclusion is that we need to do more than we have previously done in order to develop the countrys capacity to gain from globalization

26. Presentation of the National Trade Policy:Situational Analysis (contd)

Emphasis needs to go beyond the Washington Consensus macroeconomic stabilization, privatization and liberalization

Private sector in LDCs such as Uganda is still weak, and needs some support including through trade policies

27. Presentation of the National Trade Policy:Situational Analysis (contd)

Linkage between domestic policies anddevelopment of trade is explored

Severed linkage between MTTI and the DCOs clearly comes out as an issue that needs immediate policy correction

Domestic trade and international trade are mutually reinforcing and policies should reflect this

28. Presentation of the National Trade Policy:Situational Analysis (contd)

Complementarities ofpolicies is essential, e.g. trade and tax policy, trade and transport/infrastructure, trade and agriculture, trade and health, trade and Industry

29. Presentation of the National Trade Policy:Situational Analysis (contd)

Govt recognizes that trade policy will be most effective when complemented by effective and efficient institutions, adequate and efficient trade facilitating infrastructure and appropriate human skills

Trade in Services is key to economic development; and so is sufficient regulatory capacity

30. Presentation of the National Trade Policy:Trade Policy Vision

To transform Uganda into a dynamic and competitive economy in which the trade sector stimulates the productive sectors; and to trade the country out of poverty, into wealth

31. Presentation of the National Trade Policy:Mission Statement & Overall Policy Objective

To develop and nurture private sector competitiveness, and to support the productive sectors of the economy to trade at both domestic and international levels, with the ultimate objective of creating wealth, employment, enhancing social welfare and attaining sustainable economic development

32. Presentation of the Draft National Trade Policy:The Guiding Principles

Development of both domestic and international trade

Creating opportunities for equal participation in trade through entrepreneurial development, giving priority to the socially and economically disadvantaged groups in society

33. Presentation of the Draft National Trade Policy:The Guiding Principles (contd)

Provision of an enabling environment with a view to developing and nurturing a private sector that is capable of competing at global level

Targeted Government interventions in specific sectors, if and as deemed necessary

34. Presentation of the Draft National Trade Policy:The Guiding Principles (contd)

Pursuit of bilateral, regional and multilateral trade initiatives

Mitigating any adverse effects of practices by the countrys trading partners by invoking and implementing trade defense measures as and when appropriate, taking into account multilateral disciplines in the area

35. Presentation of the National Trade Policy:Priorities of the NTP

Enhancing thecompetitivenessof Ugandan products and services in the domestic, regional and international markets

Facilitating the smooth flow of trade, while ensuring that trade conforms to national and international laws and regulations

Boosting capacities of the socially and economically disadvantaged to trade

36. Presentation of the National Trade Policy:Priorities of the NTP (contd)

Strengthening trade institutions, particularly those dealing with trade policy, standards, trade flow facilitation/customs, & provision of trade information

Securing and maintaining improved market access to the domestic, regional and international markets for Ugandas goods and services

37. Presentation of the National Trade Policy:Priorities of the NTP (contd)

Provision of trade information to enable prudent and optimal investment decision making

Developing capacity to exploit existing market access opportunities

Exploiting policy synergies, coherence and complementarities between trade and other policies

38. Presentation of the National Trade Policy:Requirements for Implementation of the Policy

Strengthen the Ministry of Tourism, Trade and Industry, Affiliated Institutions, and the District Commercial Offices; and create a closer link between the Ministry and the District Commercial Offices

Provide adequate resources, both financial and human, to facilitate trade development activities right from the grassroots

39. Presentation of the National Trade Policy:Requirements for Implementation of the Policy (Contd)

Provide resources for participation in activities that are aimed at securing improved and predictable market access for Ugandas products and services

40. Presentation of the National Trade Policy:Requirements for Implementation of the Policy (Contd)

Review and strengthen commercial and/or trade laws, as well as complementary laws and policies

Formulate and implement policies and strategies that are complementary to trade policy

41. Presentation of the National Trade Policy:Requirements for Implementation of the Policy (Contd)

Develop a Market Information System to facilitate the collection, analysis and dissemination of trade information

Institutionalize and strengthen the Public-Private Sector Partnership in the formulation and implementation of the trade policy and trade development strategies and programmes

42. Presentation of the National Trade Policy:Requirements for Implementation of the Policy (Contd)

Clarify and consolidate the relationship between the productive sectors on one hand and the trade sector on the other

Work with the private sector to strengthen private sector apex associations.

43. Presentation of the National Trade Policy:Specific Policy Interventions

Domestic trade: Development of the domestic trade sub-sector shall be pursued using a multi-faceted approach, which shall include;

1.strengthening of domestic trade policies and laws

2.Identification and exploitation of policy synergies and complementarities

44. Presentation of the National Trade Policy:Specific Policy Interventions

3.Ensuring that goods and services on sale on the domestic market meet the required standards and sanitary and phytosanitary measures

4.Nurturing the private sector with a view to making it competitive in production and trade

45. Presentation of the National Trade Policy:Specific Policy Interventions(contd)

5.Ensuring that all national policies and practices on taxation and licensing are supportive of the competitiveness of Ugandan products

6.Using domestic trade as a spring board for effective participation in international trade

46. Presentation of the National Trade Policy:Specific Policy Interventions (contd)

7.Substantially reducing artificial shortages of products and services in one part of the country when they are available in another

Formulation & implementation of sectoral policies necessary for prudent management of a liberal economy, e.g. Competition Policy, Consumer Protection Policy;

47. Presentation of the National Trade Policy:Specific Policy Interventions (contd)

Implementation of the Marketing and Agro-Processing Strategy of the PMA; strengthening the District Commercial Offices; encouraging collective action in marketing; development & implementation of a Standards Policy; provision of affirmative action to local suppliers under Government Procurement

48. Presentation of the National Trade Policy:Specific Policy Interventions (contd)

International Trade : Development of international trade, using a vibrant domestic production and trade sub-sector as a spring board is an integral component of the Policy

49. Presentation of the National Trade Policy:Specific Policy Interventions (contd)

The overriding goal of Government policy on international trade is to ensure effective integration of the economy into the regional economy and the Multilateral Trading System (MTS), enhancing national capacity to take advantage of the above, while minimizing the negative effects of globalization

50. Presentation of the National Trade Policy:Specific Policy Interventions (contd)

Government policy actions in the international trade sub-sector shall aim at:

1.ensuring that the sub-sector effectively and efficiently complements the domestic trade and production sub-sectors;

2.ensuring that what is produced domestically can be competitively traded at international level;

51. Presentation of the National Trade Policy:Specific Policy Interventions (contd)

3.Enhancing trade negotiations capacity4.adapting Ugandas economy to the trade and trade-related policies and practices of the countrys trading partners

52. Presentation of the National Trade Policy:Specific Policy Interventions (contd)

Establishment of the National Trade Negotiations Team;

Creation of a Trade, Debt and Finance Committee to ensure reflection of the importance of trade in macroeconomicand monetary policies, and vice versa

53. Presentation of the National Trade Policy:Specific Policy Interventions (contd)

Posting and maintaining Trade Officers to Embassies/Missions that participate in various trade negotiations or are located in countries and/or regions in which Uganda has strategic trade interests

Pursuing regional economic integration as well as multilateralism with a view to increasing effective market access opportunities for Ugandas goods and services

54. Presentation of the National Trade Policy:Specific Policy Interventions (contd)

Maintain a liberal trade policy and at the same time enhance capacity to adjust to trade liberalization, including development of social safety nets in instances where it is envisaged that the liberalization may have negative effects

Continue to implement trade facilitating measures.

55. Presentation of the National Trade Policy:Specific Policy Interventions (contd)

Policy will be guided by the objective of optimal exploitation of policy synergies, with the major focus on forward and backward linkages between domestic, international trade, production policies such as agricultural and industrial policies and infrastructure/transport policy

56. Presentation of the National Trade Policy:Specific Policy Interventions (contd)

Institutionalization of the public-private sector consultative mechanism through the formal establishment of the IITC;

Implementation of trade facilitation measures

57. Presentation of the National Trade Policy:Specific Policy Interventions (contd)

Working with training institutions, in both the public and private sectors, to provide business and entrepreneurial skills as well as other skills that are relevant to private sector development, competitiveness, and trade policy

Protection of intellectual property rights

58. Presentation of the National Trade Policy:Specific Policy Interventions (contd)

Pursuance of macroeconomic policies and practices that are consistent with the countrys objective of increasing exports and enhancing competitiveness

59. Presentation of the National Trade Policy:Implementation of the Policy

Implementation of the Policy shall be the responsibility of the Ministry of Tourism, Trade and Industry

In fulfilling this function, the Ministry collaborates with relevant Ministries- MFPED, MAAIF, MLH&UD; MOES, MOLG, MOFA, MJ&CA, MW&E, MICT, MWT&C & MOH), and Institutions, and the private sector

60. Presentation of the National Trade Policy:Implementation of the Policy (contd)

A National Trade Sector Development Plan (NTSDP) has been developed to guide implementation of the Policy

The NTSDP provides for a Monitoring and Evaluation Framework

61. Presentation of the National Trade Policy:Implementation of the Policy (contd)

Core functions of MTTI in light of the new NTP revolve around coordination, policy formulation and guidance, resource mobilization, and monitoring and evaluation

Those of the decentralized units of service delivery the DCOs customize implementation of the Policy to decentralization framework

62. Presentation of the National Trade Policy: Conclusion

The National Trade Policy presents an opportunity to substantially reduce poverty in the country.In the past, some problems have existed with regard to expending deliberate efforts to trade, with the private sector largely expected to play the lead role

63. Presentation of the National Trade Policy: Conclusion (Contd)

The updated and consolidated Policy learns from the past and puts in place corrective measures.It aims at enhancing competitiveness and nurturing the private sector

Domestic trade and international trade are equally emphasized in the Policy

64. Presentation of the National Trade Policy: Conclusion (Contd)

A social dimension is also introduced into the Policy.Government is fully convinced that implementation of the Policy will lead to achievement of the Poverty reduction targets and the attainment of the Millennium Development Goals

The Public-Private Partnership approach envisaged for implementation will make it possible for the Policy to achieve its Vision and Objective