This paper explores how climate change financing and aid for trade can address the climate change adaptation needs and specific supply-side constraints of African LDCs and small, vulnerable economies (SVEs) in a complementary and supportive manner.

The paper concludes that to make climate change financing and aid for trade complementary and mutually reinforcing, both African countries and donors need to recognize and specify the trade impacts of National Adaptation Plans of Action (NAPAs) projects and the climate change implications of aid for trade projects. Moreover, the analysis highlights that both NAPAs and Poverty Reduction Strategy Papers (PRSPs) should be closely linked when designed, funded and implemented. A great deal of coherence will thus be required among African governments, private sector actors, members of civil society, and donors.

Although the total size of the development assistance from these donors is still small in comparison to the traditional donors’ aid, its role is growing rapidly. Geographical proximity is a major determinant of the direction of most aid flows from the emerging economies. This pattern is mainly motivated by language and cultural similarities and opportunities for increasing trade and strengthening political relations. However, geographical proximity is not the only determinant, and southern donors, particularly China and India, are strengthening their ties with Africa as well as other developing countries. Development assistance is by no means the principal ingredient in South-South cooperation. Indeed, the latter is also largely made of trade and investment, tourism, and peace-keeping operations. Nonetheless, it is the most important element as it is used to facilitate the other flows.

The present Issue Paper challenges the perception that non-traditional aid lacks transparency and contains little or any conditionality thereby undermining the development efforts of ‘traditional’ donors. Moreover, this  paper examines the implications of the re-emergence of China, India, Brazil and South Africa as important ‘non-traditional’ donors to Africa on sustainable development and aid flows and governance.

Climate change forecasts suggest that the Caribbean is particularly vulnerable to the impact of global warming. Tourism and other key economic sectors such as fisheries and agriculture will be major impact-takers under climate change. To make those economies more resilient to climate change impacts and other exogenous shocks both mitigation and adaptation measures will have to be pursued in the tourism sector. Mitigation actions could reduce energy consumption by improving energy efficiency, increasing the use of renewable energy, and implementing carbon-offsetting strategies. Moreover, given the great interest and increasing demand for sustainable and eco-tourism, new business opportunities could emerge.

The present Issue Paper “Resilience Amidst Rising Tides” by Keron Niles, a Research Consultant, aims to deepen our understanding of the key mitigation and adaptation challenges the tourism sector faces in the Caribbean. Moreover, the study explores the issues at the interface of trade, climate change, and sustainable development of concern and interests to Caribbean countries, with a focus on the competitiveness of the tourism sector. Indeed, trade policy has an important role to play in this context. Niles argues that through the potential liberalisation of environmental goods and services (EGS), a few climate friendly technologies could be made available to decrease the Caribbean’s collective carbon footprint. Moreover, environmental services geared to reduce climate change vulnerability and foster resilience could be both imported and exported at the regional and international level.

Ultimately, the purpose of this paper is to foster an informed discussion among governments, private sector and civil society in order to search for plausible ways to address adaptation and mitigation challenges in the tourism sector and build resilience in the Caribbean.

En 2007, la industria textil y vestuario exportadora nicaragüense, empleó al 5% de la Población Económicamente Activa (PEA) del país entre 15 y 69 años, sin incluir los puestos de trabajo generados por las micro, pequeñas y medianas empresas nacionales que producen para el mercado interno, así como los creados por unidades de negocio de tipo informal.

En Nicaragua, el sector textil y confección está conformado por microempresas formales (81%), empresas de zona franca (19%) y algunas empresas medianas. Sin embargo, las empresas de zona franca generan el 99.4% de las exportaciones del sector. Actualmente, setenta y dos empresas grandes exportan en su mayoría “paquete completo”, 337 microempresas formales producen para el mercado local y existen cientos de empresas informales.

No obstante, la desconexión entre el sector exportador y las pequeñas y medianas empresas (PYMEs) ha limitado los encadenamientos productivos, así como la creación de clusters donde, entre otras cosas, se fomente la innovación y el valor agregado. Adicionalmente, la inexistencia de un puerto en el Atlántico y la falta de abastecimiento de accesorios y servicios en  Nicaragua, restan competitividad al sector.

El presente estudio realizado por Ana Victoria Portocarrero, del Instituto de Investigación Aplicada y Desarrollo Local NITLAPAN, provee un diagnóstico exhaustivo del sector textil y confección en Nicaragua desde una perspectiva de desarrollo sostenible. Dicho estudio fungió como insumo para la identificación de estrategias de reconversión del sector textil y confección en Nicaragua por parte de Eduardo Burga, publicadas en un estudio por el ICTSD como parte de este proyecto.

El análisis concluye que para lograr una reconversión del sector textil y confección en Nicaragua desde una visión de desarrollo sostenible una serie de políticas sociales, económicas y ambientales deberán ser dirigidas para desarrollar, entre otras cosas, capacidades del lado de la oferta, promover los encadenamientos productivos entre el capital micro, pequeño, mediano y grande, fomentar el valor de la producción, mejorar las condiciones laborales y ambientales y fortalecer el conocimiento y las capacidades técnicas de las y los trabajadores del sector textil y confección.

Actualmente algunas iniciativas de producción orgánica y más limpia, así como ejemplos puntuales pero innovadores en cuanto a marcos de cooperación entre PYMEs y empresas exportadoras, podrían guiar la discusión sobre nuevos y diversos caminos hacia una reconversión del sector que tome en cuenta los actuales desafíos económicos, sociales y ambientales en el marco de una estrategia de desarrollo nacional y regional a largo plazo.

En Guatemala, el sector textil y confección cuenta con una importante participación del capital nacional y extranjero. No obstante, esta industria experimenta una alta concentración de mercado dado que el 88% de las exportaciones tienen como destino los EE.UU, así como la presencia de dos subsectores: uno enfocado en la producción nacional formado por pequeñas y medianas empresas (PYMEs) y otro volcado hacia las exportaciones formado por empresas grandes.

Aunque ambos sectores se relacionan de manera directa e indirecta, no existen políticas que fomenten los encadenamientos productivos o clusters en donde se fomente el intercambio de conocimientos, la innovación, la transferencia tecnológica, entre otros. Por otro lado, los altos costos de la energía eléctrica, los problemas de seguridad en el país, así como el contrabando afectan de manera directa a ambos subsectores. En el marco de la crisis económica global y las presiones competitivas de los países asiáticos, el sector textil y confección guatemalteco deberá generar estrategias de reconversión a fin de sortear los actuales desafíos económicos, sociales y ambientales que enfrenta el sector y el país.

El presente estudio realizado por Pedro Prado, Violeta Hernández, Marcelo Coj, Italia Pineda y Erick Ventura, de la Asociación de Investigación y Estudios Sociales (ASIES) y el Instituto de Investigaciones Económicas y Sociales (IDIES), provee una caracterización del sector textil y confección guatemalteco desde una perspectiva de desarrollo sostenible. Al igual que en el caso de Nicaragua, dicho diagnóstico fungió como insumo para la identificación de estrategias de reconversión del sector textil y confección en Nicaragua por parte de Eduardo Burga, publicadas en un estudio por el ICTSD como parte de este proyecto.

De este análisis se destila que Guatemala cuenta con una serie de capacidades productivas, académicas y empresariales establecidas para avanzar de manera más significativa hacia una producción de paquete completo o paquete rápido (menor volumen, mayor rapidez en la entrega) que genere importantes encadenamientos con el capital nacional pequeño, mediano y grande, continúe el fomento a la producción de tejido de punto que requiere de conocimiento y maquinaria más sofisticadas e integre en su quehacer una visión de desarrollo sostenible. El rol del estado, el sector privado y la sociedad civil será crucial para asegurar una reconversión efectiva y sostenible del sector

Indeed, many countries from Africa, the Caribbean and the Pacific (ACP) have inadequate human, financial or technical resources to meet the required standards of food safety. The Global Financial Crisis has placed further restrictions on developing countries’ ability to raise funds to upgrade their food safety capabilities. This aspect is seen as particularly relevant in view of the potential negative impact of climate change on fisheries through the introduction and spread of new diseases to fish, and changes in their traditional operating environment.

This study seeks to examine those challenges and to contemplate possible policy responses. It argues that the Economic Partnership Agreements (EPAs) between the European Union and ACP countries represent an opportunity to achieve solutions to several problem areas associated with EU SPS requirements. The importance of addressing SPS concerns in the fisheries sector cannot be overemphasized given that the EU accounts for 75 percent of ACP fisheries exports.

Moreover, fisheries are a key source of employment, export revenue and food security for many ACP countries. Internationally, fisheries are one of the few areas where their share of world trade is increasing. Consequently, if the impact of some of the SPS ‘barriers’ were reduced, it could facilitate a further potential expansion of this sector. This paper suggests that in this light, SPS can quite properly be viewed as a tool of development for the purposes of the EPAs, and therefore merits funding on this count alone.

In considering what might usefully be achieved within the framework of rule-making under the Economic Partnership Agreements, consideration is also given to the World Trade Organization SPS Agreement and some of the ambiguities that the SPS Agreement poses in this respect.

Finally, this paper sets out a number of recommendations for consideration by the EPA negotiators. These cover both specific textual wordings dealing with the SPS Agreement ambiguities, capacity building, and the need for regional institutions and regional approaches to the problem, as pests and diseases do not respect political boundaries. Some other recommendations are also made, which whilst relating to SPS issues, have a broader development objective.

This paper is part of ICTSD’s project on fisheries, trade and sustainable development, which aims to foster an inclusive and informed process for crafting multilateral, regional and domestic trade rules and policies in the fisheries sector that are supportive of sustainable development.

Muchos países en desarrollo han adquirido mayores obligaciones internacionales en materia de propiedad intelectual, como moneda de cambio para consolidar preferencias comerciales existentes, o aumentar el acceso de sus productos agrícolas e industriales. En algunos casos, estas obligaciones han sido incluso interpretadas como necesarias para la consolidación de reformas en curso, la modernización de la economía, y la imagen “positiva” de país que, según algunos actores, la suscripción de acuerdos comerciales adjudica.

Sin embargo, los beneficios comerciales esperados de la adhesión e implementación de las normas “ADPIC-Plus” han estado en su mayoría basados en valoraciones subjetivas y/o consideraciones políticas más que en evaluaciones empíricas que determinen con mayor precisión los posibles costos y beneficios.

Como consecuencia de esta tendencia y, en particular dadas las preocupaciones manifestadas por agentes sociales vinculados con el acceso a medicamentos, se planteó la necesidad de realizar evaluaciones empíricas sobre el impacto de las normas “ADPIC-Plus”. Una de las metodologías elaboradas para la evaluación de este tipo de impacto es el Modelo Agregado de Evaluación del Impacto de los Derechos de Propiedad Intelectual, generado y promovido inicialmente con apoyo de la Organización Panamericana de la Salud en el año 2005. Este modelo fue revisado y corregido en una reunión de expertos organizada por el Centro Internacional sobre Comercio y Desarrollo Sostenible (ICTSD), la Organización Mundial de la Salud (OMS), el Programa de Naciones Unidas para el Desarrollo (PNUD) y, el Instituto del Banco Mundial (IBM) en mayo del 2008.

Hasta ahora, un número limitado de estudios de impacto ha sido realizado usando el Modelo Agregado de Evaluación del Impacto para determinar los efectos de las normas “ADPIC-Plus” en el mercado farmacéutico de Colombia, Ecuador, Perú, India y Tailandia. Estos estudios han permitido generar insumos sobre el nivel de impacto en materia de precios, gasto público, consumo y competencia. A medida que más países en desarrollo han comenzado y en algunos casos finalizado nuevas negociaciones comerciales, la aplicación de la metodología revisada ofrece indicaciones útiles para evaluar intercambios en las negociaciones comerciales en curso. Por otro lado, provee una idea de los costos que se generarán como consecuencia de estos compromisos, su implementación, así como la mitigación de los impactos sociales y económicos.

Es bajo este contexto que en el diálogo regional Centro Americano de Propiedad Intelectual y de Desarrollo Sostenible organizado por el ICTSD y co-patrocinado por la UNCTAD, el Instituto del Banco Mundial, la CEPAL y el CINPE en mayo de 2006 y con vistas a la negociación e implementación del Tratado de Libre Comercio entre los Estados Unidos, Centroamérica, y República Dominicana (CAFTA-DR, por sus siglas en inglés), que el ICTSD recibió solicitudes de varios países de la región para que se realizasen evaluaciones nacionales de impacto de normas de propiedad intelectual como consecuencia de este futuro acuerdo sobre el mercado farmacéutico de la región. Dos casos piloto fueron seleccionados: Costa Rica y República Dominicana.

A fin de generar mayor precisión en la evaluación de impacto y de mejorar las opciones de implementación y mitigación de este acuerdo, el ICTSD y el CINPE, prepararon el presente estudio piloto titulado “Evaluación del Impacto de las Disposiciones de ADPIC + en el Mercado Institucional de Medicamentos de Costa Rica”. Este estudio consiste en una aplicación del Modelo Agregado de Evaluación de Impacto revisado en el 2008. El propósito de la aplicación de este modelo es determinar el impacto a largo plazo de varios escenarios de implementación de las normas “ADPIC-Plus” acordadas en el CAFTA-DR sobre los precios y, consecuentemente, sobre el gasto nacional en medicamentos (y/o la reducción de su consumo). Igualmente, este estudio pretende contribuir al proceso de mitigación de tal impacto y servir de referencia de cara a otros procesos de negociación.

While Paragraph 31 (iii) of the Doha mandate calls for a reduction, or as appropriate, elimination of tariffs and non-tariff barriers (NTBs) on EGS, the lack of a universally-accepted definition on EGS has meant that trade delegates have struggled over the scope of goods and services that could be taken up for liberalization. Furthermore, while the aim of the EGS mandate is to liberalize, it provides no indication of the pace, depth or sequencing of liberalization vis-à-vis ‘other’ goods and services. A major fault line in the negotiations on environmental goods is the dispute over whether only goods intended solely for environmental protection purposes should be included, or if other goods that may have both environmental and non-environmental uses should also be incorporated. A number of developing countries are concerned about the inclusion of goods which they perceive to be only vaguely linked to environmental protection. They are also concerned about the import-led impacts of including a broad range of industrial goods on their domestic industries, employment and tariff revenues. In a broader context, a lack of movement on issues of interest to developing countries, particularly agriculture, also inhibits proactive developing country engagement in EGS negotiations.

Particular attention has been focused on the challenges of climate change and the widespread diffusion of climate-friendly technologies which are viewed as critically important in addressing these challenges. To the extent that the WTO negotiations on EGS can help identify and liberalize specific climate-friendly goods and services, they can enhance their wider diffusion. In the WTO context a number of challenges exist, as they do with many other environmental goods in identifying specific climate-friendly goods. This is partly related to the way climate-friendly goods are classified for the purposes of international trade negotiations and also to the fact that the same goods may have other uses in addition to climate-mitigation. Political economy considerations surrounding international trade negotiations indicate that it is will not be easy to liberalize any good or service even if it is important to climate change, and if doing so will also impact a broad range of industries in producing countries. Furthermore, trade-liberalization done in isolation may not necessarily generate greater trade flows in climate-friendly goods and services if the right policies and incentives that drive markets in these goods and services are missing. Hence, it would also be useful to identify the key market drivers of these goods and services that are related to domestic regulatory policies and measures.

In order to enable a better understanding of the patterns of trade flows and market drivers for technologies and associated goods, it is important as a first step to map key technologies and the associated goods that are important for climate mitigation. This needs to be done in a number of sectors. Thus, this paper by Dr. Veena Jha builds on a mapping exercise of technologies and associated goods in the renewable energy sector carried out by experts from the Energy Research Centre of the Netherlands (ECN) and their subsequent classification under the Harmonised System (HS) customs codes at the 6-digit level undertaken by Mr Izaak Wind, an expert and former Deputy-Director at the World Customs Organisation (WCO). Similar mapping studies and customs classification exercises have already been carried out for climate-friendly technologies and associated goods in the building and transport sectors in order to feed into subsequent trade analyses for these sectors.

This paper points out the challenges in identifying goods used solely for renewable energy generation purposes for computing trade statistics. It also highlights goods for which identification is relatively easier and those sectors which appear to be more trade-intensive than others.  In addition, it shows the key exporting and importing countries of renewable energy equipment in a range of sectors including solar, wind, hydro-electricity, geothermal, ocean and biomass. Finally, the paper assesses to what extent tariffs drive trade flows in these technologies, compared to a number of other policy drivers including regulations and incentives. Overall, the paper addresses the issue of the need for a level playing field, particularly for developing country producers. The playing field can be leveled through subsidies provided to renewable energy in the developed world being made available to developing countries while addressing the trade-distorting ones through WTO rules and disciplines. While subsidies need to be phased out over the long term it is important to recognize the importance of some of these subsidies at least in the short to medium term for market creation. All of these issues are important in the context of both the role of the WTO in generating conditions for free and fair trade in climate-friendly goods as well as for the United Nations Framework Convention on Climate Change (UNFCCC) negotiations in creating an enabling environment for markets and domestic demand for these goods, particularly in developing countries.

Dr. Veena Jha is a Visiting Professorial Fellow at the Institute of Advanced studies, University of Warwick, UK, and a research fellow at the International Development Research Centre, Canada. In addition, she is the Executive Director of Maguru Consultants Limited, London, UK. She has worked with the United Nations in various capacities for over twenty years. She was the Coordinator of an important UNCTAD/ DFID/Government of India initiative on ‘Strategies and Preparedness for trade and Globalisation in India’. She has published twelve books on trade and development issues, articles in journals, and was a member of some consensus-building initiatives on trade and environment issues in the last decade. She has been a member of several national and international Advisory Boards, notably the United Nations Secretary General’s Task Force on Millennium Development goals. She has served as an expert on technical committees of the Government of India, industry associations, and non-governmental organisations on trade and development issues.

The paper is part of a series of issue papers commissioned in the context of ICTSD’s Environmental Goods and Services Project, which address a range of cross-cutting, country specific and regional issues of relevance to the current EGS negotiations. The project aims to enhance developing countries’ capacity to understand trade and sustainable development issue linkages with respect to EGS and reflect regional perspectives and priorities in regional and multilateral trade negotiations. We hope you will find this paper to be stimulating and informative reading and useful for your work.

In its recommendations to policymakers released in October, the ICTSD-IPC Platform on Climate Change, Agriculture and Trade emphasized that an open and equitable agricultural trade system is necessary to address both climate change and food security concerns. Yet, as this paper also argues, it would be unwise to rely solely on trade to help us adjust to climate change. Alongside ongoing efforts to maintain an open and equitable global food system, the international community must also importantly commit to sustained investment in agricultural productivity. We are pleased to release this paper, trusting that it will enhance the Platform’s efforts to increase understanding of the linkages between climate change, agricultural production, trade and food security, which in turn will yield greater policy coherence among these issues.