Linking Aid for Trade with Trade,
Development and Poverty Reduction
Fred A Miencha-KIPPRA
fred@kippra.or.ke
Issues Discussed
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•
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Trade, Growth and Poverty Linkage
Hong Kong Declaration on Aid for Trade
Aid for Trade an Instrument for Development
and Poverty Reduction
Link between TDP and AfT process
Trade, Growth and Poverty Linkage
Dilemma between Trade openness and protection

Douglas A.Irwin “ did the late nineteenth century US
tariffs promote infant industries? Evidence from the
Tinplate industry”
Frank Taussing (1915) stated that there is a prime facie
case to protectionism
In Para 2 pg 3 ,conclude that trade protection as a rule
not be preferred to trade liberalisation
I.
II.
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Douglas again in his paper “interpreting the tariff-growth
correlation of the late 19th century
Trade, Growth and Poverty Linkage (2)
Found Corretion coefficient of 0.68 between tariffs and
growth
ii. Canada,Argentina and USA were countries with high
tariffs, high growth countries
Protection/liberalisation/structural issues??
•
In para 2 pg 2, the difficult of linking trade policy
change and poverty. Alan winter has come up with
Institutional framework to trace this link through
(Distribution, enterprise and government)
i.
Analytical framework Figure 1
Policy change
Trade policy reforms
Change in relative
Border price from
Multilateral trade and
Unilateral trade
Policy change
Domestic Macroeconomic
Reforms
i.
Real exchange rate
ii.
Capital market liberalisation
iii.
Tax policy reform
Agricultural sector reforms
Net tax
Promotion of diversification
Promotion of non-traditional
Crops
Institutional reforms
i.
Land
ii.
Market parastatals
iii.
External shocks
Institutional and
policy environment
Affects (1) degree
Of price transmission
And ability of producers
And consumers to respond
end to price signals
(2) The functionality of
markets for different
Categories of actors
Intermediate Impact
National level response
i.
Changes in relative prices
ii.
Changes in value and level
iii.
Of production
iv.
Changes in import prices
v.
Changes in export earnings
vi.
Changes in imports requirements
vii.
Changes in productive levels
Within country response
Transmission to different parts
the country will be influenced
A range of transmission
Mechanisms. Their effectiveness
i.
Will be influenced by:
ii.
Market failures and distortions
iii.
Location in a spatial poverty trap
iv.
Relative access to productive
Household level response
i.
Farm diversification
ii.
Expanded farm or hard size
iii.
Increased off farm income
iv.
Complete exit
Poverty indicators
At household level
i.
Income/produ
ii.
Purchasing p
iii.
Vulnerability
iv.
Asset holding
v.
Access to ser
vi.
nd public goo
Aft as Development Tool and Poverty
Reduction (1)
Does it imply additional resources?

How different is it from other initiatives?

What lessons do have from other similar
arrangements (ACP-CU aid for Trade)?

What is the interest of the donors?
In Kenya –

i.
ii.
trade policy and regulation-23.2 m $
25.6 Us $ Trade development
Aft as Development Tool and Poverty
Reduction (2)
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What is the trade off between market access
and aid for Trade
Preferential erosion and AfT
To what extent will it be incorporated in the
ERS, PRSP?
Link Between TDP project and AfT
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Why the link?
What is the role of Csos?
How can Csos influence policy?
How are they organised?
Their participation in Trade policy formulation
and implementation
Limits in their participation
Link Between TDP project and AfT (2)


Pro-poor growth strategy through designing
appropriate national policies
TDP project should influence policy making process
in international level (How?)
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Research
Lobbying
Meetings
Active participation in ERs,PRSP etc
Identify mitigation measures and those affected
Link Between TDP project and AfT (3)

i.
ii.
iii.
iv.
v.
Limitations of their participation
Capacity
Organisation
Openness
Always one sides
Conflict with other stakeholders
Representation of various actors
in EU-ESA negotiations
70
60
50
40
30
20
10
0
ta
ta
ls
te
se
ct
or
Re
se
ar
ch
CS
O
s
Pr
iv
a
Pa
ra
s
rie
s
% of
respondents
represented
in
is
t

There seems to be
good
representation of
various actors
surveyed in
KEPLOTRADE
clusters
Poor participation
in trade related
issues, fisheries &
services clusters
M

Representation of actors in
NCWTO

60
50
40

30
20
% of
respondents
represented
10
s
CS
O
ta
ta
ls
te
se
ct
or
Re
se
ar
ch
Pr
iv
a
ra
s
Pa
M
in
is
t
rie
s
0
There seems to be
reasonably good
representation in NCWTO
Apart from agri &
services, representation
or participation of nonstate actors in other
clusters/sub-committees
is weak
Stakeholders view on representation in
the Trade Policy -Making Process
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Issues of concern in trade policy making are
diverse & technical and no single entity can
effectively address all without a strong
partnership with other stakeholders
Wide participation necessary to boost
ownership & facilitate implementation.
Although the Govt has made substantial
effort in involving stakeholders, most actors
still feel they are not sufficiently represented.
Perceived Influence of State and
Non-state actors

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Multilateral organizations, Govt actors and
ODAs perceived to have the strongest
influence on trade policy making process
Non-state actors consider the influence of civil
society, farmer associations and the media on
the trade policy-making process as largely
weak or only moderate
Very strong
Strong
Intern
Somewhat influential
al and
Weak influence
Civil
So
ciety
tions
Assoc
ia
Medi
a
local
NGO
s
ions
ncies
s
ors
isatio
n
rch In
stitut
Farm
er
ation
organ
elopm
ent ag
e
Resea
Over
seas d
ev
Multi
latera
l
Gove
rn m e
nt act
Percentage
Figure 12: Level of Influence of Players (Rated by Government Actors)
100%
80%
60%
40%
20%
0%
No influence
Very strong
Strong
Somewhat influential
Farme
ociety
ciation
s
Media
Civil S
r Asso
rnmen
t
actors
Multil
ateral
organ
isation
Overs
s
eas de
velop
ment
agenc
i es
Resea
rch In
stituti
ons
Intern
ationa
l and
local N
GOs
Gove
Figure 1: Level of Influence of Players (Rated by Non-state Actors)
100%
80%
60%
40%
20%
0%
Weak influence
No influence
Figure 1: Influence of Actors in the Trade Policy Making Process as Perceived
by Non-state Actors
Trade policy
Multilateral Agencies
Government Actors
ODAs
Research Institutions
Producer Associations
CSOs
Declining level
of influence on the
trade
policy making
Poor people
process.
Implied position
Figure 1: Description/perception of the coordination between state
and non-state actors in formulating trade policy.
Media
Private sector
20%
21%
44%
34%
0%
8%
50%
42%
Government Actors
20%
40%
40%
CSOs
0%
75%
25%
40%
60%
80%
Percent of total
Poor or Very poor Fair Good or very good
100%
120%
Thank You
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ACKNOWLEDGEMENT
CUTs –Kenya
CUTs- London
Participants