ࡱ> CEB @ bjbj5*5* ".W@W@,4444444H8$,PHlhpp"mmm$ R&#4*mm**44&"""*44"*""|44Kd K5pO$<0la#"#$KHH4444#4K|mn " d /mmmHHXHHϲʹ General Council: Mobilizing Aid for Trade: Latin America Panel November 20, 2007, 3:00 PM John Hewko, Vice President, Millennium Challenge Corporation Having talked with you this morning about the overall US government approach to aid for trade, I would like to address more specifically the role played by aid-for-trade in our relations with our nearest neighbors in Latin America and the results of the Latin American Regional meeting attended by my colleague from USAID, Assistant Administrator Paul Bonicelli. I dont plan to repeat, but rather to stress, complementary themes: the role of aid for trade in regional trade agreements, the importance of country ownership in making aid for trade a success, and the critical role of the private sector. Supporting FTAs: The United States has an active program of aid for trade in Latin America, much of it in support of our bilateral and regional trade agreements. An interesting element of the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR, for short) and our negotiated bilateral FTAs with Peru and Colombia is the way these agreements have integrated trade capacity building from the start. The TCB Committee of CAFTA-DR will be meeting next week in Washington, in fact. One purpose of the group is to ensure coordination of aid for trade activities, and, to that end, we will be hosted by the Inter-American Development Bank and joined by the World Bank, the UN Economic Commission for Latin America and the Caribbean (ECLAC), and the Organization for American States. There are many examples of this ongoing cooperation. Our Department of Agriculture is conducting regional training on regulations for the importation of plants and plant products to the U.S. and inspection techniques, in order to reduce the number of shipments with phyto-sanitary infractions. USDA also has regional programs to help countries harmonize SPS regulations with international standard setting bodies. Our Trade and Development Agency is helping the customs agency of El Salvador design and develop a single customs window so that importers and exporters can obtain all required permits and documentation via a single Internet portal. TDA is also helping streamline and modernize Guatamalas customs transit control process. In Honduras, USAID is helping the private and public sectors prepare laws and regulations for implementation of CAFTA. The U.S. Overseas Private Investment Corporation (OPIC) has provided a grant to the Nicaraguan National Port Authority to carry out reforms to modernize the Port of Corinto by making it more attractive for Nicaraguan and foreign partner investment. And the Peru FTA agreement envisions programs for small and medium-sized enterprises and farmers, to improve the transportation infrastructure and telecommunications, and to assist Peru in implementing the obligations of the agreement. My own agency, MCC, has agreements with three Central American countries: Honduras, El Salvador and Nicaragua. MCC (along with other donors) is funding roads to improve transportation links between El Salvador and Honduras and between Honduras and Nicaragua. These linked routes will allow goods to cross the isthmus from the Atlantic to the Pacific and will help farmers more easily move their products to markets in the region, in the U.S., and beyond. Country Ownership: At MCC, countries develop their own proposals for financing. We have found that nearly 60% of requests have been for activities defined as aid for trade. This percentage varies considerably, however, from country to country, reflecting the fact that countries do have different priorities. We believe that the ϲʹ and donors should respect this country ownership. Aid for trade should not be treated in a vacuum, but as part of the overall decision that each country makes in determining its own development and budget priorities. That is why we emphasize the importance of countries incorporating trade in their overall development plans. We will only fund it if you propose it. Enabling the Private Sector: While treaties such as CAFTA-DR or assistance agreements such as MCC Compacts are negotiated and approved by governments, their success in economic terms rests on the efforts of the private sector. People and the corporations they form and work for need to seize the opportunities that trade offers for sustainable growth. All the aid in the world will not result in sustainable development if an adequate environment for private sector activity is lacking. We like to say at MCC that the private sector is our exit strategy. I think we would do well to think of the private sector as the vehicle that ultimately determines the success of aid for trade as well. Finally, we all know that none of this is easy. Coordination is hard work; seeking input from private sector is time consuming; prioritizing is tough but essential. What weve found from our experience at MCC is that there is no single path to reducing poverty through growth and Im sure the same applies to increasing economic growth through trade. The answer isnt just one new road or one new program. Time and commitment will be needed no matter how much money is available. But with leadership and the right policies, aid for trade can help.     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