International Trade Department

Trade Related Capacity Building (TRCB) activities financed through multilateral and bilateral institutions

Since 1998, DFID’s total financial commitment to TRCB activities has been £181 million. Much of DFID’s support to TRCB is integrated into DFID’s other development programmes, such as private sector development or livelihoods projects. A recent update of DFID’s inventory of TRCB activities has led to an increase in the total commitment figure for TRCB activities from the previous £174 million figure.

The 4 case studies, given below, outline the impact of some of the DFID supported TRCB activities:

TRCB activities financed through multilateral institutions

i) Advisory Centre on World Trade Organisation (WTO) Law (ACWL). – DFID commitment £1.33 million (2001-2006)

This independent, Geneva based centre assists developing and transition countries by providing free or low-cost legal support to members pursuing cases in the WTO Dispute Settlement Mechanism. Since its establishment in 2001, the ACWL has represented 13 different developing countries and 1 least developed country in a total of 20 different dispute settlements. In one case, the ACWL assisted Peru to win a dispute settlement over a European Council Regulation, which prevented Peruvian sardine exporters from labelling their products as “sardines”.

ii) International Trade Centre (ITC) – DFID commitment £1.8 million (2002-2006)

The ITC’s Export-led Poverty Reduction Programme (EPRP) assists developing countries to develop and market labour intensive products and services, for example, agricultural products, textiles and community-based tourism. In Cambodia, the EPRP is working with poor rural weavers, many of them women, to improve the production and marketing of high-quality silk products, enabling them to gain access to international markets. Sales amounting to US$10,000, with exports worth US$2,500 have been generated by the project.

In the period 2003-2005, average monthly-sales turnover increased six fold from US$160-US$940. Product development by the weavers has increased and now incorporates the use of environmentally friendly dyes, which conform to European Union import regulations. Incomes of weaver families have risen and there has been a rise of school attendance amongst the children of weavers. The project is being replicated in other communities in Cambodia and a pilot will be included in the Integrated Framework.

TRCB activities financed through bilateral programmes

iii) Lesotho Revenue Authority (LRA) – DFID commitment £4.05 million (2002-2007)

Customs reform is an important element of trade facilitation: the improvement of the ease and speed of the movement of goods across international borders. In Lesotho, the LRA has improved tax revenue collection and effectively offset the decline in customs revenues arising from Lesotho’s membership in the Southern African Customs Union. The successful introduction of both Value-Added Tax (VAT) and a system to claim tariff revenues from South Africa, by the LRA, provides the Government with revenues, which enable it to finance services of benefit to the poor.

The new VAT system has a direct positive impact on the incomes and expenditure of the poor. Some basic foodstuffs are zero rated for VAT and the system is progressive, exempting small traders. As well as tripling the levels of revenue previously collected at the border, the VAT system has streamlined border procedures making it easier for people to trade. The time it takes for large traders to cross the border has been reduced from 2-3 hours to 30 minutes and for small traders from 20-60 minutes to 5 minutes.

iv) Business Partnerships Programme (BPP) Kenya – DFID commitment £2 million (2000-2004)

The BPP encouraged business partnerships with British and European companies to improve livelihoods of poor Kenyans. A partnership was established between the company Honey Care Africa and the non-governmental organisation (NGO) Africa Now. The partnership has successfully stimulated the development of commercial bee keeping in Kenya, involving small-scale farmers. As well as raising the incomes of smallholders in more than 200 households, the project has enabled market access of Honey Care Africa to the European markets, as well as domestic.

The project has had significant effects. Approximately 90% of honey sold in Kenya used to be imported and currently 90% of the honey is produced domestically. The business model developed by Honey Care Africa has the potential to benefit other developing and transition countries. Tanzania and Eastern Europe have asked the company for training and to replicate the model.

Last updated: 12 January 2006

Back to top