Navigating changes in trade and aid, focusing on what works

• • During a press briefing for developing-country journalists at the WTO Global Review of Aid for Trade, ITC Deputy Executive Director Dorothy Tembo shared how trade facilitation and new partnerships can drive growth in times of change. 

By Dorothy Tembo

Let me begin with a simple point: Your role in reporting on the discussions and decisions taken here, during the Global Review of Aid for Trade, matters more than ever. We are living through a period of profound transformation. Global trade, development and international cooperation are evolving at a rapid pace, reshaping the nature of partnerships – the central theme of this conference. Developing countries, particularly least developed countries, are among those most affected by these shifts.

Small businesses are especially vulnerable to these changes. Although they account for the vast majority of firms and two-thirds of jobs worldwide, they often lack the information, networks and resources that larger enterprises can draw on to navigate uncertainty, respond to emerging challenges and adapt to a rapidly changing context. And the changes are many: In trade, we are seeing major policy shifts, from tariffs and industrial policies to new sustainability requirements. We are also seeing supply chain disruptions, including in the Strait of Hormuz, which have raised not only energy prices but are affecting food production.

We found that least developed countries source 61% of their ammonia imports and 68% of their sulphur imports from Hormuz-exposed economies. These are key inputs for fertiliser. The recent disruptions are raising fertiliser prices, which has a direct impact on food security. Here again, it is developing countries – many of them net importers of energy and food commodities – and their small businesses that are most affected.

All of this is unfolding at a time when aid budgets are also coming under increasing pressure. According to the OECD, official development assistance (ODA) fell by a historic 23 percent last year, with further declines projected this year. While these developments present shared challenges across the trade and development landscape, they also open up new opportunities. Against this backdrop, developing countries are increasingly looking beyond traditional aid and dependence on commodities, focusing instead on value addition, economic diversification and sustainable economic transformation.

Increasingly, they are seeking “mutually beneficial economic partnerships.” Many traditional donor countries are calling for the same. These are partnerships characterised by investment, expanding commercial opportunities and shared prosperity.

Take Africa’s critical minerals sector. Mineral-rich countries want to ensure the energy transition delivers industrialisation and economic benefits at home. They are looking to move beyond exports of raw materials towards local value addition and manufacturing. That is why we at ITC are supporting countries like Zambia, Namibia and South Africa to develop regional battery precursor value chains linked to electric vehicle production.

To seize opportunities like these, especially in times of change, we have to focus on the actions that are proven to deliver results. That includes trade facilitation.

Trade facilitation – under the WTO Trade Facilitation Agreement – is about making trade faster, easier and less costly for businesses. A key part of these efforts involves solving obstacles before they occur, including by sharing trade information and data. Beyond improving transparency and access to trade regulations, we at ITC support trade facilitation reforms, ranging from electronic certificates of origin to trade information dashboards to border assistance desks for small-scale traders.

For example, in Indonesia, we are working with the ASEAN Secretariat to enable traders to move goods across participating countries under one electronic transit declaration and a guarantee covering duties and taxes for the whole journey.

In Lesotho, Namibia and the wider Southern African Development Community (SADC), we are mapping market-entry rules, surveying businesses and supporting government reforms, as well as developing channels to address the barriers that are identified. We are also supporting business growth through training on branding, e-commerce and trade fairs.

In The Gambia, we worked with partners to establish a “one-stop-shop entrepreneurship and gender-based violence support centre” to support traders – including women – to get the trade information they need and to prepare the required customs paperwork.

In Ecuador, we build on our broader trade facilitation work to support farmers to obtain national and international quality certifications – supporting them to sell in new markets.

As you can see from these examples, we work with countries across the entire reform cycle: from identifying challenges faced by businesses and translating them into practical reforms, to supporting their implementation and ensuring uptake by the private sector. My colleague Vianney will be presenting more of those initiatives.

I want to wrap up with this: While today’s trade environment is more complex, it is also creating opportunities for those who can adapt. Developing countries – and their small businesses – have a role in shaping what that looks like.