TradeTrade--Related Capacity Related Capacity Building in East Asia: Building in East Asia:

Role of ADBRole of ADB

Jong Woo KangJong Woo KangEconomist, Economist, Office of Regional Economic IntegrationOffice of Regional Economic Integration

5 February 2008, Cambodia5 February 2008, Cambodia

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Outline of the PresentationOutline of the Presentation

I.I. ADB’s Role in Capacity Building ADB’s Role in Capacity Building and Development in Asiaand Development in Asia

II.II. ADB’s Regional Cooperation and ADB’s Regional Cooperation and Integration (RCI) StrategyIntegration (RCI) Strategy

III.III. Aid-for-Trade InitiativeAid-for-Trade InitiativeIV.IV. ADB Capacity Building ADB Capacity Building Activities Activities

and and Support for FTAsSupport for FTAsV.V. Lessons Learned from ADB Lessons Learned from ADB

ExperienceExperience

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I. ADB’s Role in Capacity I. ADB’s Role in Capacity Building and Development in Building and Development in

AsiaAsia Dedicated to “poverty reduction” in Asia Dedicated to “poverty reduction” in Asia

and the Pacific. and the Pacific. FFocusocuseded on encouraging economic growth, on encouraging economic growth,

social development, and good governance, social development, and good governance, while promoting regional cooperation and while promoting regional cooperation and integration.integration.

Based on the experience and close Based on the experience and close cooperation with other governments and cooperation with other governments and institutions, best poised to provide institutions, best poised to provide research, capacity building and training research, capacity building and training activities in Asia.activities in Asia.

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I.I. ADB’s Role in Capacity ADB’s Role in Capacity Building and Development in Building and Development in

AsiaAsiaWhy Trade-Related Capacity Building?Why Trade-Related Capacity Building? While trade performance in Asia is striking, While trade performance in Asia is striking,

there still exist countries that are lagging there still exist countries that are lagging behind others and unable to fully enjoy the behind others and unable to fully enjoy the benefits from increasing trade.benefits from increasing trade.

With an estimated 204 FTAs in Asia of which With an estimated 204 FTAs in Asia of which more than 50% include East Asian economies, more than 50% include East Asian economies, trade-related capacity building is critical trade-related capacity building is critical element to enable DMCs and LDCs to cope with element to enable DMCs and LDCs to cope with the growing reality in an effective way.the growing reality in an effective way.

ADB’s regional cooperation programs have been ADB’s regional cooperation programs have been active in trade-related projects in GMS, CAREC active in trade-related projects in GMS, CAREC and the Pacifiand the Pacific.c.

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FOUR PILLARS OF REGIONAL

COOPERATION AND INTEGRATION

II. ADB’s Mission and the Role of Regional II. ADB’s Mission and the Role of Regional Cooperation and Integration in Poverty Cooperation and Integration in Poverty

ReductionReduction

Pro-Poor Sustainable Economic

Growth

InclusiveSocial

Development

Good Governance

POVERTY REDUCTION

Trade and Investment Cooperation and

Integration

Monetary & Financial Cooperation and

Integration

Regional Public Goods

Individual Country Programs

Regional & Subregional Economic Cooperation

OVERACHING MISSION/ OBJECTIVE

CORE AREASOF

INTERVENTION

Regional Cooperation and Integration

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III. Aid for Trade (AfT)III. Aid for Trade (AfT)

AfT refers to aid flows to improve AfT refers to aid flows to improve the participation of DMCs, esp. LDCs the participation of DMCs, esp. LDCs in the global trading system. in the global trading system.

Broadly defined, AfT covers:Broadly defined, AfT covers: Trade capacity buildingTrade capacity building to help DMCs negotiate to help DMCs negotiate

and implement trade agreements;and implement trade agreements; Trade developmentTrade development including export promotion including export promotion

and trade finance;and trade finance; Trade-related infrastructureTrade-related infrastructure (transport, energy (transport, energy

communications);communications); Supply-side capacitiesSupply-side capacities (e.g. in the productive (e.g. in the productive

sector);sector); Trade-related adjustment programsTrade-related adjustment programs (e.g. social (e.g. social

safety nets and worker retraining)safety nets and worker retraining)

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III. ADB involvement in AfTIII. ADB involvement in AfT In 2006, RDB Heads including ADB In 2006, RDB Heads including ADB

President expressPresident expresseded support for AfT support for AfT WTO AfT Advisory Group established in WTO AfT Advisory Group established in

20072007 of which of which ADB is a member ADB is a member OECD-DAC Global MonitoringOECD-DAC Global Monitoring Regional AfT Review co-hosted by WTORegional AfT Review co-hosted by WTO

September 2007, Manila September 2007, Manila www.aric.adb.org/aft_asia.phpwww.aric.adb.org/aft_asia.php

1st Global AfT Review 1st Global AfT Review November 2007, GenevaNovember 2007, Geneva ADB presented the AfT in Asia and the Pacific: ADB presented the AfT in Asia and the Pacific:

Report and RecommendationsReport and Recommendations

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Regional Technical Group on Regional Technical Group on AfT for Asia and the PacificAfT for Asia and the Pacific

Proposal for AfT in Asia and Proposal for AfT in Asia and the Pacificthe Pacific

Study on Trade Performance Study on Trade Performance and AfT in Asia and the Pacificand AfT in Asia and the Pacific

III. AfT Roadmap for 2008III. AfT Roadmap for 2008

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1. Free Trade Agreement (FTA) 1. Free Trade Agreement (FTA) ManualManual for Asiafor Asia

Offers all-in-one resource materials Offers all-in-one resource materials on current practices and experiences on current practices and experiences of Asian economies on FTA design, of Asian economies on FTA design, negotiation and implementation.negotiation and implementation.

Covers economics of trade and FTA, Covers economics of trade and FTA, main components of FTA and its main components of FTA and its related practical issuesrelated practical issues

Scheduled due in March, 2008Scheduled due in March, 2008

IV. ADB Capacity Building Activities IV. ADB Capacity Building Activities and Support for Free Trade and Support for Free Trade

AgreementsAgreements

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2. Training Course on Designing, Negotiating 2. Training Course on Designing, Negotiating and Implementing FTAsand Implementing FTAs

Address the growing concern for new Address the growing concern for new technical skills among government officials technical skills among government officials in such areas as services, intellectual in such areas as services, intellectual property rights, and government property rights, and government procurement.procurement.

Aims to build up a pool of trade officials who Aims to build up a pool of trade officials who are active are active or to be active or to be active in the area of trade in the area of trade design, negotiation and implementation in design, negotiation and implementation in promoting "best practice" FTAs.promoting "best practice" FTAs.

The 2-week course consist of lectures, group The 2-week course consist of lectures, group presentations and mock-up negotiationspresentations and mock-up negotiations

IV. ADB Capacity Building Activities IV. ADB Capacity Building Activities and Support for Free Trade and Support for Free Trade

AgreementsAgreements

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2. Training Course on Designing, Negotiating 2. Training Course on Designing, Negotiating and Implementing FTAsand Implementing FTAs

Course contents include:Course contents include: Economic theory of international tradeEconomic theory of international trade General issues of WTOGeneral issues of WTO Coverage of FTACoverage of FTA Practical processes in the governmentPractical processes in the government

3 batches of training have been conducted in 3 batches of training have been conducted in ADB HQ, Manila, Philippines since October ADB HQ, Manila, Philippines since October 2006.2006.

Received strong and positive feedbacks on the Received strong and positive feedbacks on the RRELEVANCE ELEVANCE and USEFULNESS and USEFULNESS of the course.of the course.

IV. ADB Capacity Building Activities IV. ADB Capacity Building Activities and Support for Free Trade and Support for Free Trade

AgreementsAgreements

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2. 2. Training Course on Designing, Negotiating Training Course on Designing, Negotiating and Implementing FTAsand Implementing FTAs

IV. ADB Capacity Building Activities IV. ADB Capacity Building Activities and Support for Free Trade and Support for Free Trade

AgreementsAgreements

FTA Training Participants, Oct 2006 - Oct 2007

1st Batch (29 pax, 12 countries

and 1 agency)

2nd Batch (31 pax, 25 countries

and 1 agency)

3rd Batch(35 pax, 29 countries

and 1 agency)

Brunei, Cambodia, PRC, Indonesia, South Korea, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, Viet Nam, ASEAN Secretariat (ASEC)

Afghanistan, Armenia, Azerbaijan, Bhutan, Brunei, Cambodia, Fiji, Georgia, Kazakhstan, PRC, Indonesia, South Korea, Lao PDR, Maldives, Myanmar, Nepal, Papua New Guinea, Philippines, Samoa, Singapore, Sri Lanka, Thailand, Tonga, Vanuatu, Viet Nam, ASEC

Armenia, Azerbaijan, Bangladesh, Bhutan, Brunei, Cambodia, Fiji, Georgia, Kazakhstan, Kyrgyz Republic, PRC, Indonesia, Lao PDR, Malaysia, Maldives, Myanmar, Nepal, Papua New Guinea, Philippines, Samoa, Singapore, Solomon Is., Sri Lanka, Tajikistan, Thailand, Tonga, Turkmenistan, Vanuatu, Viet Nam, ASEC

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3. Asia Regional Integration Center 3. Asia Regional Integration Center (ARIC) Database(ARIC) Database

Launched in October 2006 Launched in October 2006 Database provides three types of Database provides three types of

information: information: FTA trends FTA trends showing statistical tables on the status showing statistical tables on the status

and various classifications of FTAs and various classifications of FTAs Available resourcesAvailable resources on each FTAs including legal on each FTAs including legal

documents, official summary, studies and documents, official summary, studies and researches, news, opinions and editorials, FTA researches, news, opinions and editorials, FTA membership and an external link to the UNESCAP membership and an external link to the UNESCAP databasedatabase

Comparative FTA Toolkit -Comparative FTA Toolkit - allows side-by-side allows side-by-side comparison of concluded FTAs comparison of concluded FTAs

IV. ADB Capacity Building Activities IV. ADB Capacity Building Activities and Support for Free Trade and Support for Free Trade

AgreementsAgreements

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IV. ADB Capacity Building Activities IV. ADB Capacity Building Activities and Support for Free Trade and Support for Free Trade

AgreementsAgreements3. Asia Regional Integration Center 3. Asia Regional Integration Center

(ARIC) Database(ARIC) Database www.aric.adb.org/ftatrends.php

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IV. ADB Capacity Building Activities IV. ADB Capacity Building Activities and Support for Free Trade and Support for Free Trade AgreementsAgreements4. 4. Technical Assistance ProgramsTechnical Assistance Programs Capacity building program for BEIF Capacity building program for BEIF

(Bureau of Economic Integration and (Bureau of Economic Integration and Finance), ASEC - ongoingFinance), ASEC - ongoing

For 2008, ADB-OREI have two upcoming For 2008, ADB-OREI have two upcoming technical assistance on trade capacity technical assistance on trade capacity and facilitation:and facilitation: Supporting the capacity building of FTA Units in Supporting the capacity building of FTA Units in

CLV countries- expected for approval in Q2 2008CLV countries- expected for approval in Q2 2008 Partnership in Supporting Trade Facilitation For Partnership in Supporting Trade Facilitation For

DMCs in Asia and the Pacific (Phase I)DMCs in Asia and the Pacific (Phase I) (with (with UNESCAP) – expected for approval in 2UNESCAP) – expected for approval in 2ndnd Half of Half of 20082008

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IV. ADB Capacity Building Activities IV. ADB Capacity Building Activities and Support for Free Trade and Support for Free Trade

AgreementsAgreements55. Research Activities. Research Activities Study on Economic Cooperation Between Study on Economic Cooperation Between

East Asia and South AsiaEast Asia and South Asia Two-volume book (forthcoming) with Two-volume book (forthcoming) with

six thematic chapters-six thematic chapters- including investments, including investments, services, trade, infrastructure and trade facilitation, services, trade, infrastructure and trade facilitation, scenarios for EA-SA integration using a CGE modelscenarios for EA-SA integration using a CGE model

Eight country studies-Eight country studies- PRC, Thailand, PRC, Thailand, Singapore, Bangladesh, India, Nepal, Pakistan and Sri Singapore, Bangladesh, India, Nepal, Pakistan and Sri LankaLanka

Address issues such asAddress issues such as extent of East Asia-South Asia trade, investment extent of East Asia-South Asia trade, investment

and other linkages and economic factors thereof and other linkages and economic factors thereof potential benefits of enhanced East Asia-South Asia potential benefits of enhanced East Asia-South Asia

cooperation and integration for member countriescooperation and integration for member countries

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IV. ADB Capacity Building Activities IV. ADB Capacity Building Activities and Support for Free Trade and Support for Free Trade AgreementsAgreements55. Research Activities. Research Activities Study on Economic Cooperation Study on Economic Cooperation

Between East Asia and South Asia: Between East Asia and South Asia: Key Key FindingsFindings

East Asia-South Asia linkages growing rapidly East Asia-South Asia linkages growing rapidly from a small base, driven by PRC-South Asia and from a small base, driven by PRC-South Asia and India-East Asia tradeIndia-East Asia trade

Given the complementarities between the two Given the complementarities between the two regions and on-going policy efforts, economic regions and on-going policy efforts, economic integration is bound to increase much more in the integration is bound to increase much more in the future future

The inclusion of South Asia in a broader regional The inclusion of South Asia in a broader regional agreement sees gain for East Asian and South agreement sees gain for East Asian and South Asian economies Asian economies

Big effort needed at regional and national levels Big effort needed at regional and national levels to realize Pan-Asian integration. to realize Pan-Asian integration.

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V. Lessons from ADB T&I V. Lessons from ADB T&I Capacity Building ExperienceCapacity Building Experience

Need to dNeed to define a comprehensive course efine a comprehensive course program still responsive to individual program still responsive to individual country country rrequirementsequirements

There is a lack of There is a lack of general understanding in general understanding in basic economic rationales behind trade and basic economic rationales behind trade and trade-related issuestrade-related issues

Effective harmonization of HQ and on-field Effective harmonization of HQ and on-field courses are needed building on merits and courses are needed building on merits and demerits of respective training schemesdemerits of respective training schemes

Spread of knowledge and skills is essential Spread of knowledge and skills is essential → → knowledge dissemination through Manual, knowledge dissemination through Manual, CD and etc.CD and etc.

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Thank You.Thank You.

Jong Woo KangJong Woo KangOffice of Regional Economic IntegrationOffice of Regional Economic Integration

Asian Development BankAsian Development Bank

jkang@adb.orgjkang@adb.org