AID FOR TRADE Interview with Patricia Francis, Executive Director of the International Trade Centre

Q: You were appointed Executive Director of the International Trade Centre (ITC) in June 2006. What do you consider are your main achievements since taking office?
I would say refocusing the organization –– to bring everybody to one place –– which was a very difficult thing to do. ITC was fragmented, and now we’re working more in unison. I believe one of the most important things we’ve achieved is that now we all share a common vision. We had a lot of conversions about a common vision and it was underpinned by focusing on poverty alleviation –– the foundation of all our work. As a technical organization, we are always working with numbers and sometimes there is a disconnect about what this is contributing to –– in other words, to poverty alleviation. So just getting everybody committed to that principle was a big step.
A key area of focus for us which goes hand-in-hand with alleviating poverty, is building capacity.
These are key components of our credo “export impact for good”, and here “good” has a triple meaning: there must be a positive impact from the exports that we help facilitate; we should be choosy about where we work and what we do; and we should only agree to those arrangements that we believe can have a real impact. It could perhaps be said that some people are working on ‘doing good’ and others are working on ‘doing well’. Sustainability means that people do both – these things are very interconnected.
It was very important to integrate that philosophy into ITC because it helps in making choices. If you have to choose between working in country A or country B, you compare these countries to see which one satisfies the greatest number of your criteria; and this helps us to make decisions. I will say that this focus, this concurrence on why we are doing what we are doing and how we do it, is critical in establishing values that people can ascribe to. It means that we stand for something. We are not stealing other people’s mandates, but focusing on our own. To be honest with you, I think that this has been a massive achievement.
Q: In December 2005, the sixth WTO Ministerial Conference in Hong Kong created the programme “Aid for Trade”. Could you tell us a little about the project and what exactly ITC does in this context?
We have been engaged with the WTO from the very beginning. Our process has been to bring the private sector’s voice into Aid for Trade discussions. When we attended the first set of meetings, we noticed an absence of the private sector. Clearly, if the private sector has not been involved, it will not be concerned by whatever decisions have been made, and will feel alienated from the process.
In subsequent meetings, we have been responsible for introducing the private sector’s voice and then making sure that those discussions are brought through to the ministerial level. This has been a very critical and important part of the process. When you look at the road-map note for Aid for Trade, which has just been approved by the General Council of the WTO, you see that the private sector is well represented, where-as it was previously invisible. The main focus for ITC has been to talk about the role of the private sector at every opportunity and we will continue to make sure that the private sector is fully represented.
We’ve already seen success in the “Enhanced Integrated Framework”, a subset of the Aid for Trade which focuses on least-developed countries (LDCs). We have been very successful in making sure that countries that carry out integrated framework diagnostic studies include the issue of gender. As far as the LDCs are concerned, we believe that our greatest success has been that the issues of women and the environment are now on the agenda of Aid for Trade.
We are also working towards ensuring that trade becomes part of the development agenda set by governments, another Aid for Trade objective. What seems to be happening in most countries is that you have your “trade policy” and your “development policy”, but the two are not connected. In ensuring that trade becomes part of development policy, you then have a more inclusive process. We will pursue this policy and, of course, in terms of setting the agenda we will also provide technical assistance so that countries achieve particular outcomes. Clearly, everything that we do, including our capacity-building work, is directed towards trade, so it is indeed Aid for Trade.
There is now a satisfactory framework which looks at issues that we think are important. There is now a place for the private sector at the table; there is a place for women … and, of course, you cannot think about trade without thinking about the environment, so the environment is also present on the agenda. We believe that the countries, regions and sectors that we are working with will adopt a far more holistic approach, which is critical as we move into the twenty-first century.
Q: Since the financial turmoil last year and the tremendous decrease in international trade, what has been your main focus to get countries out of this situation?
The financial crisis has limited governments’ financial resources. It’s a question of setting priorities on where to spend that money and, of course, every minister believes that his needs are the most important! The question is, therefore, what is the lowest level at which we can sustain ourselves during this period, and how can we prepare ourselves for when it is all over –– because it is also about preparing for a new period of growth.
This new period will come, but I believe it will not happen as quickly as many people would like.
What are we going to do? In our view it’s all about governments focusing on what is going to make their countries more competitive. You should never lose an opportunity like a crisis, as during a crisis you can get consensus on some difficult decisions. Decisions on reforms which need to be taken to ensure a competitive environment, or making companies focus on the things that are critical for their own survival.
Inter-regional trade is very important in these times, particularly in Africa. This does not mean that inter-regional trade does not exist currently, but that the mechanisms for inter-regional trade do not exist. This is because trade is aimed at third countries–– that is the colonial legacy. While you may have strong historical trade agreements with Europe, you may also have a huge gulf between you and the man next door. Furthermore, the officials at border crossings are often corrupt and conditions are particularly difficult for women. We have seen that women are the greatest victims of the cross-border trade: they pay higher tariffs than anybody else because they are not properly informed; they have to pay the greatest number of bribes; and then you have people who take advantage of women in other ways … so they are quite vulnerable.
At the end of the day, we believe that facilitating inter-regional trade and the development of inter-regional value chains can also be one of the solutions. Here, we are talking about one country producing raw materials, while another one has energy to process and perhaps to create the final product. If multinational corporations carry out these operations efficiently, local companies have the potential to learn and take advantage of the same processes.
When you look back to the last financial crisis in Asia, it was inter-regional trade that brought them out of that crisis.
We believe that there are huge opportunities for inter-regional trade, particularly for land-locked countries. Rather than thinking about it as an obstacle, it should be viewed as an opportunity, which can yield solutions. Regional economic commissions in various parts of the world are talking about these things, but it is going to be the private sector that will make it happen.
How do you bring down the barriers so that the private sector can get to work? Many of these things do not cost money: they’re administrative and can be accomplished with a pen. You do need to change the rules and regulations and that is easier said than done because a culture exists of “we do not want the goods to move next door –– we have this barrier”. The big expense is really to bring everybody around a table, to engage in the level of dialogue and gain commitment. It needs to get down to the level of: Is the customs officer properly trained? Does he know that there is a new set of rules allowing goods to pass across the border without paying duty because there is now a customs union? In many cases no. There are also cases where they do know, but it has become lucrative business to extract money. These are things that countries need to think about. And then, we have to ensure that the private sector knows its rights. Private sector organizations need to be educating their own business community about the opportunities, rules and regulations.
When you put all of these pieces together, inter-regional trade can be a very good opportunity. We have already seen this happening in the services sector. (??)
In Western Africa now you’ll see Southern African shopping centres, you see banks from Western Africa. You see the same thing in Latin America. In Central America the retail chains from El Salvador dominate. You see construction companies from different countries, telecommunication companies from Mexico, etc., just spreading out services. You see fewer barriers. Inter-regional trade is moving rather quickly. It would be good to settle some of these matters by completing the Doha Round. We still hope that this can be achieved.
Q: ITC is considered as one of the most efficient trade organizations as it only works with concrete projects. Are there some projects in particular that you would like to highlight?
In Central Asia we have been doing a simple yet very significant thing: trying to establish a value chain for agro business in Kyrgyzstan and Turkmenistan which improves the chances of businesses’ success through improved quality.
One of the issues that we face in the developing world, –– either in transition countries or in the least-developed countries –– is to ensure that products are in conformity with international rules and regulations. If you want to get your product into markets, you cannot simply think about the lowest level of quality; you have to think beyond that. Frequently, the infrastructure is not there to support the business community, and entrepreneurs can see this as a penalty. “We have been doing this for the last 100 years –– my father and my grandfather before me –– why do I need to change? This is something that is now being imposed on us by the European Union or the United States to keep us out of the market.”
What we were able to establish in Kyrgyzstan and Turkmenistan was real ownership by the countries themselves and the private sector to make this happen. It has been successful to the extent that we have even been able to use some of the consultants that we have trained and ISO certified in other countries. Not only have they become consultants for their own industry, but they have become international consultants as well. This is something that I would say we have done very well.
Another success was to establish the criteria for the ethical fashion initiative. We brought together the European fashion community and organizations in Africa. We started to work in communities where people had local crafts –– it was not necessarily marketable but people did have a skill. Sometimes in displaced communities these skills have been fostered by NGOs.
We found a group of ladies who had a good tradition of crocheting and we did a handbag collection with Max and Co (Max Mara). The collection of cotton bags was so successful globally that we’re now doing more. It is a two-part process: first, we are helping these communities to produce a product sold internationally; and second, we are working with African designers who show their designs in the European market place. It’s a joint enterprise with the fashion community in Europe, and, again, highlights how important the involvement of the private sector is.
We also have an ethical fashion sales arrangement with the Co-op here in Switzerland. These are simple arrangements with key shopping chains, but amount to hundreds of thousands of products. We have also developed our Women and Trade Programme. One early success was working with the Ugandan government revise its national export strategy to include a gender component.
National export strategies are a very important part of ITC’s work; we help countries examine questions like what opportunities they should be pursuing and how they can build consensus. Consensus begins in these cases by formally engaging the private sector, because all national export strategies are about public/private dialogue. If we have successfully set up a mechanism for a dialogue to take place on a regular basis on a national export strategy, this is a great legacy for us. We are now working on this with Liberia, which is a very difficult situation but we are making steady progress. We have also been working in Jamaica, Grenada, Ecuador, in Africa and South-East Asia. We are very proud of this work.
I would also like to mention our trade intelligence work. Earlier, we used to call this expertise trade information, but now we are moving to another level where we recognize that countries need to be able to understand what is happening in the global market place. We have the tools, which build the capacities of institutions so that they can do the work themselves. The World Bank has recognized the importance of these tools by contributing resources to the ITC to make them freely available to all developing countries.
However, now that tariffs are going down, non-tariff measures have appeared as the new way of inhibiting trade. Together with UNCTAD, we have launched a pilot programme in six countries to develop a network of private sector and public sector institutions to monitor what is going on in trade.
We have also been looking at things the ITC has done in the past with trade support institutions and bringing those practices back into our work. For instance, the ITC used to focus on building capacity for chambers of commerce, sector associations and quality organizations. But when working with them, they made very clear requests of us: could we help them with very practical information on how to improve their services and quality. We now have a benchmarking scheme being developed in conjunction with the trade support institutions from both the developed and the developing world.
Q: The World Trade Centers Association is an association of more than 300 centres working in nearly 100 countries. What do you do in collaboration with them?
We have had a history of working with the International Chamber of Commerce (ICC) over many years, and we actually run programmes together in many parts of the world. We also work with some World Trade Centers in some countries, although we do not have agreements as such. Some are run for profit, so this may become a point of difference between us. We have very good relationships with world trade centers in parts of the world where they are the partners of choice. In some cases, the World Economic Forum (WEF) is our partner. In Africa, WEF is the agency bringing the private sector together and ITC will join forces with them because they are working with large corporations. We are working with small and medium-sized enterprises.
On the other hand, there are many places where we are working with the ICC. The World Trade Centres have not been part of our strategy, except where they have been the key player in a particular country. Of course, when we go into a country we approach a myriad of organizations and we want to work with strong people. So we may sign a memorandum of understanding with them, as we have with the ICC and the World Economic Forum.
Q: Finally, Ms Francis, you have now been at the head at the ITC for three years and, if my information is correct, you have just been appointed for a second term. Where would you like to see the organization three years from now?
Recalling my last interview with you, I still think I would like to see the ITC as a centre of excellence. I think we are close to this goal. Certainly, I hope that by the time I am out of here that it will no longer be a question –– it will be well recognized. We will be known as a partner of choice within the context and framework of our core competencies.
If I can go back to one of the first questions you asked me about the core competencies of the ITC, I would like to see flagship programmes in each one of our main areas. This has already been well established with respect to our trade intelligence where we are doing publications in conjunction with WTO, UNCTAD, the World Economic Forum and the World Bank.
We have a new programme next year on accession in least developed countries, and here we are working within the Enhanced Integrated Framework. I believe that this is going to be a very successful programme as well.
In trade support work and bench-marking we would like to see ourselves as a world standard And in the area of national export strategies, this is now becoming so widely accepted that we are being asked to join the World Bank to put together the diagnostic studies. By the time I leave here, this will also be one of the things for which ITC will be well-known.
It’s all about focus. It’s about keeping our eyes on what we need to do, building the right kinds of partnerships to do it, and then ensuring the quality. That’s what I would like to ensure: good management and quality of services to our customers.