Strengthening trade competitiveness in developing countries has become even more important in the context of the current global economic crisis. Both nationally and regionally coordinated actions will help position developing countries to benefit from the recovery of global growth.
UNDP’s support for trade capacity development is based on the premise that international trade can play an important role in raising levels of human development and achieving sustainable poverty reduction. It therefore considers trade a means to an end, not an end in itself. Properly harnessed, international trade can create opportunities for growth, poverty reduction, and human development within developing countries by:
- Expanding markets: trade allows an economy to overcome the constraints of its domestic market;
- Raising productivity through the increased returns to scale in production, especially in the manufacturing sector, that result from access to international markets;
- Accelerated technological development resulting from increased exposure to new technologies and the dissemination of knowledge – mainly through exposure to foreign competition, marketing and, in particular, technological diffusion.
However, none of this is an automatic or inevitable consequence of international trade. If developing countries are to reap the potential benefits of trade, trade agreements must ensure enough flexibility for them to establish policies that address human development needs and concerns. This may include a prioritized focus on agriculture, commodities, industrial tariffs, special and differential treatment, and services of particular interest to developing countries.
Further support for trade development and productive sector capacity building is provided under UNDP’s private sector which seeks to foster inclusive and sustainable markets. This portfolio, including the activities of UNDP’s affiliate, the UN Capital Development Fund (UNCDF), accounts for approximately US$100 million per year globally, and is aimed at enhancing the contribution of the private sector, including micro, small and medium sized enterprises, to trade, growth and poverty reduction.
To enable trade to become a meaningful driver of development and a serious contributor to the achievement of the Millennium Development Goals (MDGs), UNDP helps to strengthen capacities in developing countries in three important areas:
- Trade competitiveness - the capacity to compete internationally by overcoming supply- side constraints (especially LDCs);
- Trade agreements - the capacity to negotiate, interpret, and implement trade agreements which prioritize poverty and human development concerns;
- Policy integration - the capacity to integrate pro-poor trade policy in national poverty reduction strategies.
The overriding aim is to put human development concerns at the forefront so that economic growth and development are viewed as a means towards the achievement of employment, health, education, and empowerment.
UNDP maintains a variety of partnerships on trade-related issues at multilateral, regional and country levels. These include:
- Chief Executives Board (CEB) Inter-agency Cluster on Trade and Productive Capacity
- The Enhanced Integrated Framework for Trade-related Assistance for Least Developed Countries
- The WTO Advisory Body on Aid for Trade
TCB activities in this guide
- Trade and human development
- Least Developed Countries (LDCs)
- Natural resource management, including commodities
- Landlocked Developing Countries (LLDCs)
- Mainstreaming trade
- Capacity development of trade related institutions
- Trade diagnostic and needs assessments
- Human development impact of trade and investment policies
- Inclusive Growth and Poverty Reduction in the Asia Pacific Region
- Regional Integration and Institutional Capacity Development in Africa
- TRIPS and access to HIV/AIDS drugs
- TRIPS, trade and biodiversity
- Private sector development and engagement
- Green commodities facility
- Aid for trade initiative for the Arab states
- Wider Europe – Aid for Trade for Central Asia, South Caucasus and Western CIS
- South-South Global Assets and Technology Exchange
- UNDP-China Trilateral and South-South Cooperation