The IDB, established in 1959 to support the process of economic and social development in Latin America and the Caribbean, is the main source of multilateral financing in this region. The IDB Group provides solutions to development challenges by partnering with governments, companies and civil society organizations to reach clients ranging from central governments to city authorities and businesses.
The IDB lends money and provides grants. With a triple-A rating, it borrows in international markets at competitive rates, and can therefore structure loans at competitive conditions for its clients in its 26 borrowing member countries. In addition, it offers research, advice and technical assistance to support key areas like education, poverty reduction and agriculture, and is also active in cross-border issues like trade, infrastructure and energy.
The IDB Group is composed of the Inter-American Development Bank, the Inter-American Investment Corporation (IIC) and the Multilateral Investment Fund (MIF). The IIC focuses on support for small and medium sized businesses, while the MIF promotes private sector growth through grants and investments, with an emphasis on microenterprises.
Inter-American Investment Corporation: http://www.iic.int/home.asp
Institute for the Integration of Latin American and the Caribbean: www.iadb.org/intal
With its main goals of promoting sustainable economic growth and regional integration in Latin America and the Caribbean, the IDB works with governments and the private sector to support increased competitiveness, modernized public institutions, and the fostering of trade, and strives to attain these goals in environmentally and socially sustainable ways that will bring lasting poverty reduction and greater social equity.
More specifically, the Bank promotes:
- social policy for equity and productivity;
- infrastructure for competitiveness and social welfare;
- institutions for growth and social welfare;
- regional and global integration; and
- protection of the environment, responsiveness to climate change, promotion of renewable energy and ensuring food security.
In the area of capacity building in trade, the Bank, mainly through its Trade and Integration Sector (INT), performs research, provides policy advice and technical assistance, and carries out financial operations through grants and loans with the objective of strengthening the capacity of countries in Latin America and the Caribbean.
IDB operations in the areas of trade and integration help countries to benefit from an open trade and investment regime and pursue proactive regional and global economic integration agendas. The operations provide support for negotiating and implementing trade and investment agreements, promoting exports and attracting investment, strengthening trade facilitation practices and customs modernization, building productive capacity for regional and global integration, ensuring appropriate adjustment measures to advance the process of economic integration, and deepening regional integration and cooperation through the provision of regional public goods, including migration and financial integration.
As part of its research program in the areas of trade and integration, the IDB generates state-of-the art research, and knowledge relevant to policy making; translates policy research into effective projects and operations; evaluates the results and impacts of relevant projects and disseminates best practices; and develops specialized databases and modelling services for assessing the impact of trade and integration.
Specifically, the IDB provides financing through loans and non-reimbursable technical cooperation in the following areas:
- Export promotion and investment attraction;
- Customs modernization and trade facilitation;
- Negotiations and implementation of trade and investment agreements;
- Regional public goods:
- Trade adjustment and poverty reduction;
- Financial and labour integration.
Through its Integration and Trade Sector, the Bank also supports trade and integration initiatives to strengthen Latin American and Caribbean sub regional, regional, hemispheric, extra-regional (Europe and Asia), and global integration. This includes supporting regional infrastructure initiatives such as the Initiative for the Integration of Regional Infrastructure in South America (IIRSA), and the Mesoamerican Integration and Development Project.
The Bank supports the implementation of the Aid for Trade Initiative in Latin American and the Caribbean in partnership with the WTO and the OECD; and collaborates with other international organizations such as the WCO, the World Bank, the United Nations, and other regional development banks, such as the ADB, in a number of trade-related initiatives.
Through INT and in coordination with the Institute for the Integration of Latin America and the Caribbean (INTAL), the Bank supports the Trade and Integration Capacity Building programs, the Trade and Integration Policy Research Networks (LAEBA, ELSNIT, RedINT) and key publications and databases (INTRADE; DATAINTAL;INTAL Newsletter; Integration and Trade Journal).
The IDB-INTAL/WTO training programs are for government officials, with the aim of deepening cooperation to provide technical assistance on trade negotiations and capacity-building to the region, taking into account the priorities of the countries in accordance with the Doha Development Agenda, with special emphasis on regional integration.
Training is provided by WTO experts with the participation of specialists from the Integration and Trade Sector of the IDB in areas such as trade in services, sanitary and phyto-sanitary standards, Aid for Trade, WTO rules, trade and development, environment and climate change.
The Bank has engaged in partnerships throughout the region and with global institutions, such as the WTO, the WCO, and the OECD, to foster the design and implementation of knowledge products, implementing concrete projects and building capacity. This is the case with the Aid for Trade Initiative in Latin America and the Caribbean, where the Bank has developed a partnership with the WTO, the OECD and other regional development banks.
As part of the Bank’s contribution to the implementation of the WTO Aid for Trade Initiative, the IDB organized a series of national, sub regional and regional reviews on aid for trade in Latin American and the Caribbean during 2008-2009 (see “Implementing Aid for Trade in Latin America and the Caribbean. The National and Regional Review Meetings 2008-2009” at http://www.iadb.org/int/ ) and has provided support for the development of AfT strategies in the Caribbean, in particular in Belize, Jamaica, Trinidad and Tobago.
The Bank also collaborates with other international organizations, such as the World Customs Organization, the World Bank, the United Nations, the European Commission and the Asian Development Bank (ADB) in a number of trade-related initiatives. The strong trade and economic ties between Asia and LAC has led to enhance cooperation on capacity building and knowledge and best practices exchange between the ADB and the IDB and their respective clients.
The Bank is also developing strategic partnerships with regional institutions such as SICA and SIECA in Central America and REDIBERO in Latin America that gather the export promotion agencies.
TCB activities in this guide
- Inter-institutional cooperation on trade and integration
- Regional Policy Dialogue on Trade and Integration
- South-South cooperation
- Policy research and impact studies
- Trade policy notes
- Support for the negotiation and implementation of trade and investment agreements
- Trade and Integration Capacity Building Program
- Supporting the integration of Latin America and the Caribbean into the global economy through Aid for Trade
- Supporting trade strategies and strengthening institutional capacity in trade promotion and investment attraction agencies
- Suporting SMEs: workshops under the FINPYME Export Plus Jamaica Program
- INTRADE – IDB Trade Information Hub
- Customs, trade facilitation and logistics and capacity and institutional building.
- The Mesoamerican Project (MP) and the Initiative for the Integration of Regional Infrastructure in South America (IIRSA)
- Transport infrastructure
- Ports and maritime transport
- Grants and loans
- Trade finance
- Private sector development
- South-South cooperation programmes
- South-South cooperation joint initiative: IDB and ADB
The IDB, trough the Integration & Trade Sector and the Institute for the Integration of Latin America and the Caribbean (INTAL), and the General Secretariat of SICA joined efforts to establish SICA-IDB Joint Capacity Building Program on Central American Integration (2011-2014) to contribute to strengthen capacity on integration and trade, including trade facilitation.
The objective of SICA-IDB Joint Capacity Building Program on Central American Integration is to carry out training and technical assistance in regional integration and regional institutions –face-to-face courses, online courses and, the creation of communities of practice- for member countries of SICA that are linked to the projects that contribute to the integration process of both software (policy and regulatory framework) and the hardware (physical integration).
In 2011, the SICA-IDB launched the first pilot edition of the online course on Single Window as a Tool to Facilitate Trade in Central America. Since its launch, 214 participants –average age 38, and 46 percent female– from 17 Latin American countries have been trained in six online tutored courses on single windows, customs management and leadership, strategic planning in customs, e-commerce, and the International Transit of Good (TIM). Eighty-three percent of participants have received certification. Additionally, 25 tutors were trained in online methodology, which resulted in the design and development of 28 modules with more than one hundred exercises.
In order to ensure success and ownership, the Bank works closely with LAC institutions to identify and propose potential candidates, while at the same time building strategic partnerships with other institutions such as the WTO and the WCO and with sub-regional entities like the Central American Integration System (SICA) and the Caribbean Customs Law Enforcement Council (CCLEC).
Mesoamerican Integration and Development Project
A successful story is the Mesoamerican Project (MP), which serves as the operational tool responsible for the execution of specific projects and programs aimed at fostering the development, financing and implementation of regional infrastructure, connectivity, and social development projects in the Mesoamerican countries (Mexico, Belize, Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama and Colombia). The MP connects markets within the region, reduces transport and trade costs, enhances trade competitiveness, and increases foreign investment. Of the 100 projects, two stand out: the Pacific Corridor Highway (PC) and the International Transit of Goods (TIM).
The PC constitutes the international trade backbone of the region, through which it circulates 95 per cent of international trade within these countries. This corridor will cut the distance from Mexico to Panama by 300 kilometres, saving considerable time and cost to its users. Also, as part of the Corridor, a pilot plan has been implemented to develop a common system for the international transit of goods. To this date, the average transit time has been reduced at the “El Amatillo” border between El Salvador and Honduras from 60 minutes to 8 minutes and the program is implemented in Mexico, Guatemala and other Central American countries at the request of Central American Presidents.
Institutional strengthening of international trade
The programs financed by the Bank to support institutional strengthening of international trade (including support for the negotiation and implementation of trade agreements) under the modalities of “sectoral facility” and investments loans have shown significant results in improving beneficiary countries’ capacity to design and conduct their own trade policy.
With these instruments, the Bank has financed numerous operations in the region. Many of these operations were also identified as best practices during the last exercise done by the World Trade Organization (WTO) and the Organization of Economic and Cooperation Development (OECD) under the frame of the Aid for Trade Initiative, in particular because of their contribution to the improvement of countries’ capacity to design and conduct trade policy.
Bank programs financing trade promotion have demonstrated that investment in trade promotion results in a high return. In the case of the Bank’s programs, results have been very positive: projects that have supported and financed export promotion agencies have resulted in a return of 40 to 50 dollars of exports per dollar invested. The Bank is now developing a capacity building program whose main audience will be the export Promotion and Investment Attraction Agencies.