Context
The increasing globalisation of the world economy offers great development opportunities, but also poses risks. Many developing countries are unable to argue their case appropriately during negotiations with the various international and regional trade regimes, or to use their membership to promote developmental processes that will reduce poverty. They also lack coherent cross-sectoral strategies for promoting trade and investment that are necessary to start adapting processes in their own economies and to develop new value chains. The Federal Ministry for Economic Cooperation and Development (BMZ) has thus set up the Trade Policy and Trade Promotion Fund to support the trading activities of our partner countries.
Objective
Policy-makers in selected developing countries have at their disposal coherent cross-sectoral strategies and tools for developing trade policy and promoting trade and investment.
Approach
The fund finances and implements concrete measures in partner countries and regions. The fund measures, which are limited in time and budget, offer capacity development to policy-makers, civil service officials and members of organisations in the private sector and civil society. This way they can learn, for example, how to introduce and implement trade standards within the framework of international agreements. In addition, the Fund promotes the cross-linkage of state and non-state stakeholders so that they can jointly develop and implement trade strategies.
Results
32 projects have been implemented with the Fund so far. Selected partner countries and regions were supported in developing coherent strategies and common positions for trade negotiations – for example the East African Community in the area of intellectual property rights or Mongolia in negotiations for a free trade agreement with Japan. Moreover, fund projects contributed to the institutionalisation of a dialogue between private companies and governments – for example in Central America, where the establishment of a private business organisation, which represents the interests of small and medium size enterprises, was supported. In some partner countries, information and service offers with regard to trade were set up – for example in Cambodia, where the certification of organic vegetables was supported.
About half of the Fund projects which have been implemented so far led to the inclusion of trade-related topics into the regular country portfolio. Additionally, three Fund measures were turned into independent projects. This mainstreaming of trade-related development cooperation contributes to the insurance of longer-term support of partner countries and regions in making use of the developmental potential of international and regional trade.