By Cyber Era NG Special Correspondent, ASEAN Region
The 2021 Annual Report of the Enhanced Integrated Framework (EIF), released on June 28, highlights how the EIF partnership between least-developed countries (LDCs), partner agencies and donors is helping beneficiary countries use trade to enhance their development prospects. The report presents more than 100 projects, pursued in 2021, where the EIF is helping LDCs improve their trade capacities in areas such as environmental sustainability and digital connectivity.
The report highlights how the EIF partnership has catalysed support for LDCs, helping them to improve their trading capacity and to generate over US$200 million in new exports in 2021.
“LDCs took a lead role in improving their economic situation in 2021, working closely with the EIF partnership to build their institutional and productive capacities,” said EIF’s Executive Director, Ratnakar Adhikari. “As a result, the EIF beneficiary countries were able to strengthen both their standing in international trade and their resilience to national and global shocks. Despite the COVID-19 pandemic and other challenges – including economic and climate-related issues – in 2021, LDC exports increased by an estimated 22 per cent, according to WTO estimates of May 2022.”
Environmental sustainability remained a priority cross-cutting area for the EIF in 2021, with EIF financing helping LDCs undertake “green transformation” projects and reduce poverty. EIF capacity-building projects delivered a wide range of environmental benefits in 2021. These included improvements across agricultural value chains, such as the honey industry in Ethiopia and the shea butter sector in West and East Africa, and the preservation of coastal areas through eco-tourism in Comoros and Liberia.
Innovative e-solutions across EIF projects in 2021 helped improve the digital skills of fintech startups in Rwanda and micro, small and medium-sized enterprises in Cambodia. EIF projects also accelerated online sales for shea butter traders in Benin and Burkina Faso, as well as for handicraft producers in Lao PDR. In addition, streamlined electronic customs systems helped to boost trade in Vanuatu and Zambia.
In 2021, an independent, external evaluation reviewed the results of the EIF programmes since the inception of the EIF. It captured the lessons learned from the first phase (covering the period 2008 to 2015) and identified priorities for mobilizing trade-related technical assistance for LDCs in the future.
The EIF received USD 7.6 million in new contributions in 2021, with US$ 4.6 million provided in co-financing by governments, development partners and the private sector. In total, over 100 projects with a total value of US$ 157 million were targeted at LDC priorities in 2021. This includes 40 new EIF projects approved in 2021 with a combined value of over US$ 13 million.
The EIF is the only multilateral partnership dedicated exclusively to helping LDCs use trade as an engine for growth, sustainable development and poverty reduction. It is a unique global partnership between LDCs, donors and partner agencies, including the WTO, which work together to build trade capacity in LDCs.
WTO members considered six free trade agreements between Ukraine and Israel, Namibia and Zimbabwe, the United Kingdom and Jordan, the United Kingdom and Chile, the United Kingdom and Canada, and the European Union and Central America at a meeting of the Committee on Regional Trade Agreements (RTA) on 27 June. Members also reviewed implementation of the RTA Transparency Mechanism, under which members are required to notify their RTAs to the WTO. Members stressed the importance of providing information on time to ensure the Transparency Mechanism can be implemented efficiently.
Since its last meeting in March, the Committee received notifications on two RTAs. One refers to the suspension of the free trade agreement between Nicaragua and the Separate customs territory of Taiwan, Penghu, Kinmen and Matsu on goods and services and the other refers to the signature of the Comprehensive Economic Partnership Agreement between the European Free Trade Association states and Indonesia on goods and services.
Review of RTAs
Members considered the Free Trade Agreement between Ukraine and Israel (goods and services), which entered into force on 1 January 2021. Under this agreement, Israel abolished duties on 9 per cent of its imports of agricultural products from Ukraine and 80 per cent of its imports of Ukrainian industrial goods. Ukraine did so for approximately 7 per cent of its imports of agricultural products from Israel and 70 per cent of industrial goods.
Members heard that Israel’s exports to Ukraine increased from US$ 197 million in 2020 to US$234 million in 2021. Ukraine’s exports to Israel also rose, accounting for US$ 776 million in 2021, from US$ 640 million in 2020. In 2021, 64 per cent of Israel’s exports to Ukraine consisted of chemicals and chemical products, followed by food and agriculture and electrical and machinery equipment. Israel’s imports from Ukraine consisted mainly of food and agriculture products.
Several members took the floor to express their strong opposition to the invasion of Ukraine. The Russian Federation responded by saying that the WTO was not the proper venue for a discussion of this nature.
Members considered the Preferential Trade Agreement between Namibia and Zimbabwe on goods, which entered into force in April 1993. The parties noted that this agreement is based on the Southern African Development Community Protocol on Trade, which seeks to promote trade as an engine for economic development and poverty eradication in the region.
The PTA provides for reciprocal duty-free market access, subject to rules of origin that require at least 25 per cent of local content for manufactured products. The entry into force of this agreement allowed for trade between Namibia and Zimbabwe to increase significantly from below US$ 5 million in the 1990s to over US$ 20 million in 2019.
Members considered the Association Agreement between the United Kingdom and Chile on goods and services, which entered into force on 1 January 2021. The UK noted that the FTA largely replicates the European Union-Chile Agreement and covers goods, services, government procurement and intellectual property. In addition to containing 17 joint declarations – including on trade in wine and spirits – the agreement provides for an annual trade dialogue between the UK and Chile to review its operationalization at ministerial level.
Members considered the Agreement on Trade Continuity between the United Kingdom and Canada on goods and services, which entered into force on 1 April 2021. Replicating the European Union-Canada Comprehensive Economic Agreement, the agreement provides for the elimination of tariffs on most of the bilateral trade, which amounted to GBP 21 million(US$25.5million) in 2021. Investor-state dispute settlement provisions are suspended, with the parties agreeing to undertake a comprehensive joint review. The parties noted that the provisional agreement was replaced by a UK-Canada Free Trade Agreement, which entered into force on March 24, 2022.
Members considered the Association Agreement between the United Kingdom and Jordan on goods, which entered into force on May 1, 2021. The agreement replicates the European Union-Jordan trade agreement. Under the Agreement, 97.1 per cent of Jordan’s tariffs became duty free, representing 98.9 per cent of Jordan’s total imports from the UK over the period 2018-2020 while 94.8 per cent of the UK’s tariff is duty free, accounting for almost 100 per cent of the UK’s imports from Jordan during this period.
Members considered the Association Agreement between the European Union and Central America on goods and services(2), which entered into force in 2013. It contains provisions on special and differential treatment to help drive economic growth in Central America and further its integration into the world trading system. Since the agreement’s entry into force in 2013, the EU’s exports to the region have increased by 44 per cent and Central America’s exports to the EU by 96 per cent. At the end of a transition period in 2022, Central American exporters will face zero duties on 95 per cent of the EU’s tariff lines while EU exports will face zero duties for 95-96 per cent of Central American tariffs.
Implementation of the RTA Transparency Mechanism
Members were informed that 61 RTAs in force are yet to be notified to the WTO. In addition, a factual presentation has to be prepared for 64 RTAs involving WTO members and 37 involving non-members, counting goods and services separately.
The 2006 RTA Transparency Mechanism provides for early announcement by members of their RTAs and for notification to the WTO and a transparency process in the Committee on RTAs.
Next meeting
The next meeting of the RTA Committee is scheduled for 22-23 September.
