Transcript THE TRADE POLICY PROCESSES IN UGANDA

THE TRADE POLICY PROCESSES IN
UGANDA
Presentation by
Silver Ojakol
Department of External Trade
Kampala, 15th October 2008
Organization of the Presentation
• Background to formulation of the Trade
Policy
• Process of writing the draft Policy
• Presentation of the Draft National Trade
Policy (NTP)
• Next steps – finalization and implementation
Background to formulation of the Policy
• Desire to formulate and consolidate a Trade
Policy arose out of a realization by
Government that there was no single
coherent Trade Policy document to guide
players in the trade sector, especially the
private sector
• Trade and trade-related policies existed in
various documents
Background to formulation of the Policy
(cont’d)
• Most of these policies were not up-to-date,
lacked consistence and coherence
• Government therefore decided to consolidate,
streamline, update and formulate the National
Trade Policy; and avail a single document to
guide players in the trade sector
Process of writing the National Trade
Policy
• The process began in 2004, with a SubCommittee selected from within members of the
Inter-Institutional Trade Committee (IITC)
tasked to develop Terms of Reference to guide
preparation of Background documents
• The IITC is a multi stake holder forum
• Sub-committee members drawn from the public
sector, private sector and civil society
Process of writing the National Trade
Policy (cont’d)
• A consultant was recruited to prepare a
Background to Uganda’s Trade Policy;
document was to examine existing trade and
trade related policies, the gaps therein,
institutional framework for trade policy, gather
and document stakeholders’ views on trade
policy, and recommend what a new Trade
Policy should entail
Process of writing the National Trade
Policy (cont’d)
• Consultant worked under supervision of MTTI
• Numerous stakeholders were consulted, either
individually or as a group; included Government
Ministries and Agencies – including those affiliated
to MTTI, Parliament, private sector, academia, and
civil society
• Result of this process: The Background to Uganda’s
National Trade Policy
Process of writing the National Trade
Policy (cont’d)
• MTTI constituted a National Trade Policy Drafting
Team to study the Background document and
stakeholders’ views, and draft a National Trade
Policy for wider discussion
• The Team produced a draft that was later discussed
by a wider group of technocrats in the Ministry, and
MTTI political leadership
Process of writing the National Trade Policy
(cont’d)
• The Drafting Team incorporated the input of all these
discussions into the draft Policy
• An improved version of the Policy was then sent to
selected key stakeholders (e.g. MFPED, NPA) for
further consultations; in addition to further capturing
key stakeholders’ input, this process was meant to
prepare ground for implementation
Process of writing the National Trade
Policy (cont’d)
• A number of comments/views were received
and incorporated into the draft Policy before it
was circulated for discussion at the final
national consultation – the 2nd National Trade
Sector Review Conference (NTSRC) and
DTIS validation Conference held on 2-4th
October 2006
• The NTSRC involves stakeholders in the IITC as well
as the local governments, Parliamentarians,
development partners
Process of writing the National Trade
Policy (cont’d)
• After discussion of the Policy at the
Conference, a five-man team (MTTI -3,
MFPED – 1, & Technical Advisor –
UPTOP - 1) held a two-day retreat to
incorporate the recommendations of the
Conference into the Policy; clean it up;
and finalize it
Process of writing the National Trade
Policy (cont’d)
• After the finalization, the Drafting Team
thought it prudent to present the final
document to Honourable Ministers in MTTI in
preparation for submission of the Policy to
Cabinet for consideration
• The whole process of writing the Policy was
supported by the EU through UPTOP
Presentation of the National Trade Policy:
Key considerations
• context within which the Policy is formulated,
and a discussion of trade as a development tool
• Situational analysis – sectoral composition of
GDP, direction of trade, existing trade and
trade-related policies, Uganda’s trade in the
global context
Presentation of the National Trade Policy:
Key considerations (Cont’d)
• Guiding Principles
• Priorities of the NTP
• Requirements for implementation of
the NTP
Presentation of the National Trade Policy:
Key Considerations (Cont’d)
• Specific Policy Interventions – Domestic
Trade, International Trade, Trade Policy
Synergies and Complementarities/crosscutting policies
• Implementation of the NTP – core
functions of MTTI and DCOs; Ministries
with direct roles to play
Presentation of the National Trade Policy:
Key considerations (cont’d)
• The NTP is formulated within the framework
of other National Development Policies and
Strategies, particularly the PRSP – the PEAP
2004/5-2007/8, The Medium Term
Competitiveness Strategy (MTCS), The Plan
for Modernization of Agriculture (PMA) and
Vision 2025
• The findings of the Diagnostic Trade
Integration Study (DTIS) has also provided
significant guidance.
Presentation of the National Trade Policy:
Key considerations (cont’d)
• International Development aspirations &
commitments such as the MDGs as well
as international trade agreements to
which Uganda is a signatory have also
provided significant input and guidance
in drafting the National Trade Policy
• The NTP theme: Trading Out of Poverty,
Into Wealth
Presentation of the National Trade Policy:
Key Considerations (cont’d)
• Draft Policy acknowledges that the trade
sector is very dynamic, especially in the
context of a fast globalizing world under
the auspices of the multilateral trading
system
Presentation of the National Trade Policy:
Situational Analysis
• Situational analysis notes that imports
have been growing faster than exports,
resulting into a wider trade imbalance.
• Most of these imports do not necessarily
feed into the production process (i.e. are
consumables), a situation which is
unsustainable and undesirable
Presentation of the National Trade Policy:
Situational Analysis (cont’d)
• If not corrected, this would contribute to
a widening trade imbalance and
continued lack of coordination between
the trade and production sectors – such as
the agricultural and industrial sectors
• Country’s major trading partners are the
EU and COMESA
Presentation of the National Trade Policy:
Situational Analysis (cont’d)
• Whereas the percentage share of exports
to the COMESA has increased, the trade
imbalance between Uganda and the
COMESA region has been widening
• Implication of this is that limited
domestic capacity to tap opportunities
created by regionalism and
multilateralism is developed
Presentation of the National Trade Policy:
Situational Analysis (cont’d)
• Development of domestic trade is an
integral component of the NTP
• Henceforth, Government to pursue
“trade-led development”
• Export sector still faces both tariff and
non-tariff barriers
Presentation of the National Trade Policy:
Situational Analysis (cont’d)
• Some of the barriers to growth in trade
are exogenous while others are
endogenous
• The NTP and other trade-related policies
should therefore focus on both internal
and external factors to boost the country’s
capacity to use trade as a development
tool
Presentation of the National Trade Policy:
Situational Analysis (cont’d)
• Relationship between trade and poverty reduction is
analyzed
• Analysis indicates that the NTP would, inter alia,
have to address problems in the agricultural sector,
especially the falling agricultural commodity prices,
& managing trade liberalization & its effects in order
for trade to be a tool of poverty reduction
Presentation of the National Trade Policy:
Situational Analysis (cont’d)
• Importance of complementary policies comes
out in the situational analysis
• Trade in the context of globalization is
analyzed, and the conclusion is that we need to
do more than we have previously done in order
to develop the country’s capacity to gain from
globalization
Presentation of the National Trade Policy:
Situational Analysis (cont’d)
• Emphasis needs to go beyond the
“Washington Consensus” –
macroeconomic stabilization,
privatization and liberalization
• Private sector in LDCs such as Uganda is
still weak, and needs some support –
including through trade policies
Presentation of the National Trade
Policy: Situational Analysis (cont’d)
• Linkage between domestic policies and development
of trade is explored
• Severed linkage between MTTI and the DCOs clearly
comes out as an issue that needs immediate policy
correction
• Domestic trade and international trade are mutually
reinforcing and policies should reflect this
Presentation of the National Trade Policy:
Situational Analysis (cont’d)
• Complementarities of policies is
essential, e.g. trade and tax policy, trade
and transport/infrastructure, trade and
agriculture, trade and health, trade and
Industry
Presentation of the National Trade Policy:
Situational Analysis (cont’d)
• Gov’t recognizes that trade policy will be most
effective when complemented by effective and
efficient institutions, adequate and efficient trade
facilitating infrastructure and appropriate human
skills
• Trade in Services is key to economic development;
and so is sufficient regulatory capacity
Presentation of the National Trade Policy: Trade
Policy Vision
• To transform Uganda into a dynamic and competitive
economy in which the trade sector stimulates the
productive sectors; and to trade the country out of
poverty, into wealth
Presentation of the National Trade Policy:
Mission Statement & Overall Policy
Objective
• To develop and nurture private sector
competitiveness, and to support the productive sectors
of the economy to trade at both domestic and
international levels, with the ultimate objective of
creating wealth, employment, enhancing social
welfare and attaining sustainable economic
development
Presentation of the Draft National Trade
Policy: The Guiding Principles
•
•
Development of both domestic and international
trade
Creating opportunities for equal participation in
trade through entrepreneurial development, giving
priority to the socially and economically
disadvantaged groups in society
Presentation of the Draft National Trade
Policy: The Guiding Principles (cont’d)
• Provision of an enabling environment with
a view to developing and nurturing a private
sector that is capable of competing at global
level
• Targeted Government interventions in
specific sectors, if and as deemed necessary
Presentation of the Draft National Trade
Policy: The Guiding Principles (cont’d)
•
•
Pursuit of bilateral, regional and multilateral trade
initiatives
Mitigating any adverse effects of practices by the
country’s trading partners by invoking and
implementing trade defense measures as and when
appropriate, taking into account multilateral
disciplines in the area
Presentation of the National Trade Policy:
Priorities of the NTP
• Enhancing the competitiveness of Ugandan products
and services in the domestic, regional and
international markets
• Facilitating the smooth flow of trade, while ensuring
that trade conforms to national and international laws
and regulations
• Boosting capacities of the socially and economically
disadvantaged to trade
Presentation of the National Trade Policy:
Priorities of the NTP (cont’d)
• Strengthening trade institutions, particularly those
dealing with trade policy, standards, trade flow
facilitation/customs, & provision of trade information
• Securing and maintaining improved market access to
the domestic, regional and international markets for
Uganda’s goods and services
Presentation of the National Trade Policy:
Priorities of the NTP (cont’d)
• Provision of trade information to enable prudent and
optimal investment decision making
• Developing capacity to exploit existing market access
opportunities
• Exploiting policy synergies, coherence and
complementarities between trade and other policies
Presentation of the National Trade Policy:
Requirements for Implementation of the
Policy
• Strengthen the Ministry of Tourism, Trade and
Industry, Affiliated Institutions, and the
District Commercial Offices; and create a
closer link between the Ministry and the
District Commercial Offices
• Provide adequate resources, both financial and
human, to facilitate trade development
activities right from the grassroots
Presentation of the National Trade Policy:
Requirements for Implementation of the
Policy (Cont’d)
• Provide resources for participation in
activities that are aimed at securing
improved and predictable market access
for Uganda’s products and services
Presentation of the National Trade Policy:
Requirements for Implementation of the
Policy (Cont’d)
•
•
Review and strengthen commercial and/or trade
laws, as well as complementary laws and policies
Formulate and implement policies and strategies
that are complementary to trade policy
Presentation of the National Trade Policy:
Requirements for Implementation of the
Policy (Cont’d)
• Develop a Market Information System to facilitate the
collection, analysis and dissemination of trade
information
• Institutionalize and strengthen the Public-Private
Sector Partnership in the formulation and
implementation of the trade policy and trade
development strategies and programmes
Presentation of the National Trade Policy:
Requirements for Implementation of the
Policy (Cont’d)
• Clarify and consolidate the relationship
between the productive sectors on one
hand and the trade sector on the other
• Work with the private sector to
strengthen private sector apex
associations.
Presentation of the National Trade
Policy: Specific Policy Interventions
• Domestic trade: Development of the domestic
trade sub-sector shall be pursued using a multifaceted approach, which shall include;
• 1. strengthening of domestic trade policies and
laws
• 2. Identification and exploitation of policy
synergies and complementarities
Presentation of the National Trade
Policy: Specific Policy Interventions
• 3. Ensuring that goods and services on
sale on the domestic market meet the
required standards and sanitary and
phytosanitary measures
• 4. Nurturing the private sector with a
view to making it competitive in
production and trade
Presentation of the National Trade Policy:
Specific Policy Interventions (cont’d)
• 5. Ensuring that all national policies and
practices on taxation and licensing are
supportive of the competitiveness of
Ugandan products
• 6. Using domestic trade as a spring board
for effective participation in international
trade
Presentation of the National Trade Policy:
Specific Policy Interventions (cont’d)
• 7. Substantially reducing artificial shortages of
products and services in one part of the
country when they are available in another
• Formulation & implementation of sectoral
policies necessary for prudent management of
a liberal economy, e.g. Competition Policy,
Consumer Protection Policy;
Presentation of the National Trade Policy:
Specific Policy Interventions (cont’d)
• Implementation of the Marketing and
Agro-Processing Strategy of the PMA;
strengthening the District Commercial
Offices; encouraging collective action in
marketing; development &
implementation of a Standards Policy;
provision of affirmative action to local
suppliers under Government Procurement
Presentation of the National Trade Policy:
Specific Policy Interventions (cont’d)
International Trade: Development of
international trade, using a vibrant
domestic production and trade sub-sector
as a spring board is an integral
component of the Policy
Presentation of the National Trade Policy:
Specific Policy Interventions (cont’d)
• The overriding goal of Government
policy on international trade is to ensure
effective integration of the economy into
the regional economy and the Multilateral
Trading System (MTS), enhancing
national capacity to take advantage of the
above, while minimizing the negative
effects of globalization
Presentation of the National Trade Policy:
Specific Policy Interventions (cont’d)
• Government policy actions in the international
trade sub-sector shall aim at:
• 1. ensuring that the sub-sector effectively
and efficiently complements the domestic
trade and production sub-sectors;
• 2. ensuring that what is produced
domestically can be competitively traded at
international level;
Presentation of the National Trade Policy
Specific Policy Interventions (cont’d)
• 3. Enhancing trade negotiations capacity
4. adapting Uganda’s economy to the
trade and trade-related policies and
practices of the country’s trading partners
Presentation of the National Trade Policy:
Specific Policy Interventions (cont’d)
• Establishment of the National Trade
Negotiations Team;
• Creation of a Trade, Debt and Finance
Committee to ensure reflection of the
importance of trade in macroeconomic
and monetary policies, and vice versa
Presentation of the National Trade Policy:
Specific Policy Interventions (cont’d)
•
•
Posting and maintaining Trade Officers to
Embassies/Missions that participate in
various trade negotiations or are located in
countries and/or regions in which Uganda has
strategic trade interests
Pursuing regional economic integration as
well as multilateralism with a view to
increasing effective market access
opportunities for Uganda’s goods and
services
Presentation of the National Trade Policy:
Specific Policy Interventions (cont’d)
•
•
Maintain a liberal trade policy and at the
same time enhance capacity to adjust to trade
liberalization, including development of
social safety nets in instances where it is
envisaged that the liberalization may have
negative effects
Continue to implement trade facilitating
measures.
Presentation of the National Trade Policy:
Specific Policy Interventions (cont’d)
• Policy will be guided by the objective of
optimal exploitation of policy synergies,
with the major focus on forward and
backward linkages between domestic,
international trade, production policies –
such as agricultural and industrial
policies – and infrastructure/transport
policy
Presentation of the National Trade Policy:
Specific Policy Interventions (cont’d)
• Institutionalization of the public-private
sector consultative mechanism through
the formal establishment of the IITC;
• Implementation of trade facilitation
measures
Presentation of the National Trade Policy:
Specific Policy Interventions (cont’d)
• Working with training institutions, in both the
public and private sectors, to provide business
and entrepreneurial skills as well as other
skills that are relevant to private sector
development, competitiveness, and trade
policy
• Protection of intellectual property rights
Presentation of the National Trade Policy:
Specific Policy Interventions (cont’d)
• Pursuance of macroeconomic policies and
practices that are consistent with the country’s
objective of increasing exports and enhancing
competitiveness
Presentation of the National Trade
Policy: Implementation of the Policy
• Implementation of the Policy shall be the
responsibility of the Ministry of Tourism,
Trade and Industry
• In fulfilling this function, the Ministry
collaborates with relevant Ministries MFPED, MAAIF, MLH&UD; MOES,
MOLG, MOFA, MJ&CA, MW&E, MICT,
MWT&C & MOH), and Institutions, and the
private sector
Presentation of the National Trade Policy:
Implementation of the Policy (cont’d)
• A National Trade Sector Development
Plan (NTSDP) has been developed to
guide implementation of the Policy
• The NTSDP provides for a Monitoring
and Evaluation Framework
Presentation of the National Trade Policy:
Implementation of the Policy (cont’d)
• Core functions of MTTI in light of the new
NTP revolve around coordination, policy
formulation and guidance, resource
mobilization, and monitoring and evaluation
• Those of the decentralized units of service
delivery – the DCOs customize
implementation of the Policy to
decentralization framework
Presentation of the National Trade
Policy: Conclusion
• The National Trade Policy presents an
opportunity to substantially reduce
poverty in the country. In the past, some
problems have existed with regard to
expending deliberate efforts to trade, with
the private sector largely expected to play
the lead role
Presentation of the National
Trade Policy: Conclusion (Cont’d)
• The updated and consolidated Policy
learns from the past and puts in place
corrective measures. It aims at enhancing
competitiveness and nurturing the private
sector
• Domestic trade and international trade are
equally emphasized in the Policy
Presentation of the National Trade Policy:
Conclusion (Cont’d)
• A social dimension is also introduced into the Policy.
Government is fully convinced that implementation
of the Policy will lead to achievement of the Poverty
reduction targets and the attainment of the
Millennium Development Goals
• The Public-Private Partnership approach envisaged
for implementation will make it possible for the
Policy to achieve its Vision and Objective