Okinawa Workshop on Trade-Related Capacity Building
Chairman's Summary by Mr. Kojiro Shiojiri

March 13, 2001

1. The Okinawa Workshop on Trade-related Capacity Building was held from 2nd to 4th of March, 2001, in Nago, Okinawa, Japan, co-sponsored by WTO, UNDP, OECD/DAC and the Government of Japan, with the participation of representatives from developed and developing countries as well as international organizations related to trade-related capacity building (Participants' list is attached). Mr. Kojiro Shiojiri and Mr. Shigeyuki Hiroki from Ministry of Foreign Affairs of Japan chaired the meeting.
2. This workshop was held against backdrop of increasing awareness on the importance of trade-related capacity building. The G8 Communique issued at the Kyushu-Okinawa Summit last year stated "In view of critical importance of trade for the development of developing countries, trade-related capacity building should be substantially expanded, which would be conducive to the more effective participation of developing countries in the system and to fuller utilization of improved market access in their favor." Such importance of trade-related capacity building has also been emphasized in various fora related to both trade and development.
3. The objective of this workshop was to explore ways for mainstreaming and strengthening trade-related capacity building which was important for both development strategy and strengthening multilateral trading system.
4. In the Session 1, which focused on capacity building in the Least Developed Countries (LDCs), explanations were made regarding the current efforts to review and strengthen the Integrated Framework (IF). Support was expressed among participants on the recent proposal for a pilot scheme, including establishment of the Steering Committee (IFSC). It was recognized that more could be done to enhance this joint endeavor of the International Community.

   There were requests from core agencies of IF for more contribution to the Integrated Framework Trust Fund (IFTF). With this regard, it was noted that the bilateral technical assistance was another important component of IF, and bilateral assistance should be coordinated through an integrated approach. It was pointed out that the ownership of recipients is essential. Developing countries need to bring trade-related projects to mainstream in their own country development strategy such as Poverty Reduction Strategy Paper (PRSP) or United Nations Development Assistance Framework (UNDAF). While IF was formulated for the capacity building of the LDCs, the underlying principles of IF can be applicable to other developing countries.

   Participants shared the view that further progress in IF was important in view of the Third United Nations Conference on the Least Developed Countries.

5. In the Session 2, which focused on specific problems of individual WTO Agreements, participants could deepen the understanding about the usefulness as well as difficulties in implementing technical assistance. On these subjects presentations were made by EU, WTO, Thailand and concrete example explained by Japan. It was recognized that the WTO could play an important role as a focal point for exchange of information and sharing experiences among donors and developing countries and that a regional approach could be effective. Although the WTO Secretariat provides technical assistance, other institutions such as the World Customs Organization (WCO) have unique expertise in specific areas. Therefore, cooperation among international organizations should be encouraged.

   It was pointed out that when new WTO rules are to be negotiated in the future on such issues as competition or trade facilitation, the capacity building component should be incorporated. It was also indicated that the benefits of WTO Agreements should be clearly demonstrated to the domestic constituency of developing countries in order to gain political support in implementing the Agreements such as TRIPs. Some participants also pointed out that technical assistance should be focused on and directly supportive of the domestic trade law and policy adjustment for objective and effective implementation of the WTO Agreements rather than aiming at general upgrading of capacity.

   It was understood that "agreement by agreement" approach did take into consideration the different situations of each developing country and was complementary to "country by country" approach.

6. In the Session 3, which focused on strengthening "country by country" approach, it was pointed out that this approach was accepted as common practice among aid community. DAC introduced discussions among member countries for the Guidelines for trade-related capacity building. Japan explained its program for actions dealing with Asian economic crises with a particular focus on SMEs in Indonesia, and transitional economy in Vietnam. Japan also introduced capacity building related to the implementation of WTO Agreements within APEC.

   "Country by country" approach has been already accepted as an established and one of the most effective aid methods. It was recognized that this approach could be also applicable for trade-related capacity building. It was also recognized that "country by country" approach could be complementary to other approaches, IF and "agreement by agreement" approach. To facilitate the capacity building and avoid duplication of assistance, coordination among donor countries and organizations needs to be strengthened, considering existing collaboration mechanism. In such process, it is indispensable to maintain transparency and accountability. Coherence with trade policy in recipient countries should also be taken into consideration. In addition to "country by country" approach which have been taken by aid community, regional approach and south-south cooperation can be further explored in the area of trade-related capacity building as a new attempt. It is important that developing countries support other developing countries in the field of trade related activities. Involvement of private and academic sectors is also effective to strengthen the capacity.

7. In the last session, a number of comments were made on the overall issues. Some emphasized that bilateral assistance should be more effectively utilized in conjunction with IF and other multilateral efforts of technical assistance. It was pointed out that major bilateral donors were expected to take more active leadership in promoting capacity building. It was also pointed out that the costs of compliance with the WTO Agreements should be balanced by the benefits of the integration into the world economy and such costs be internalized in the development policies.

   Some pointed out that investment dimension should be more focused in the area of capacity building, while others raised the importance of public awareness and public participation in order to involve wider stakeholders including private sectors in the process of domestic policy formulation. Empowerment, ownership and governance should be stressed for developing countries to formulate their national capacity building programs.

   Regional dimension was also an important part of discussions. Best experiences learned from other countries could be shared and utilized, for example, in the framework of South-South Cooperation.

8. As a result of the workshop, there was common understanding on a number of issues including:

   (1) This workshop was a fruitful experience, serving as a unique opportunity to strengthen the collaboration among trade community and aid community from developing countries, bilateral donors, and international organizations. This type of activities should be continued.

   (2) Integrated Framework, "agreement by agreement" approach and "county by country" approach complement one another. It is important to learn experiences of other WTO members in view of the common challenges they are facing. They expect to show tangible development and visible outcomes including; IF for pilot scheme, "agreement by agreement" approach for Customs Valuation, SPS, TBT and TRIPs Agreement, and "country by country" approach for "APEC Strategic Plan" so that they can attract more public interest and further mobilize financial resources.

   (3) One of the most essential factors to effectively promote capacity building is strengthening and respecting the ownership of developing countries. If developing countries mainstream trade-related capacity building in their respective development policies, assistance efforts by the bilateral donors and international organizations will be much encouraged.

   (4) The result of this workshop and the follow-up in each country and international organization are expected to become useful input in the efforts towards the Third United Nations Conference on the Least Developed Countries in May.

   (5) In addition to the capacity building, strengthening supply side of the developing countries and improving market access for their products are also important for their trade and development.

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