I welcome the Minister of State at the Department of Foreign Affairs, Deputy Tom Kitt, and his officials. The purpose of today's meeting is to consider a motion referred by the Dáil to this committee for consideration. The motion refers to the terms of the agreement establishing the Agency for International Trade Information and Co-operation as an intergovernmental organisation. Members have been circulated with the relevant briefing document and a copy of the Minister of State's speech.
Agency for International Trade Information and Co-operation: Ministerial Presentation.
What we are doing this morning is significant. There is not a great deal of procedure involved. I was a trade Minister during the term of the last Government and now have responsibility in the area of development and this is a significant development. We have always agreed that we need to assist the poorest countries in the world to trade out of poverty. That is what we are doing. I will outline the procedure to the committee and members may ask questions later.
In December 2002, and subject to ratification by Dáil Éireann, Ireland signed up to an agreement to establish the Agency for International Trade Information and Co-operation, or AITIC, as an intergovernmental organisation. AITIC was created in 1998 on the initiative of the Swiss Government. It is based in Geneva where most of the international trade-related organisations are headquartered. The objective of AITIC is to assist developing countries, particularly those without permanent trade delegations in Geneva to strengthen their participation in trade related activities and thus maximise the development benefits which can accrue. AITIC's target clients are primarily poor, low income and resource constrained countries with the priority being least developed countries without permanent representation in Geneva. AITIC achieves its objectives by assisting poor countries to participate more actively in the work of the international trade-related organisations, such as the World Trade Organisation.
AITIC is now in the process of transforming itself from a Swiss association, funded exclusively by the Swiss Government, into an intergovernmental organisation. This change, launched by an initiative adopted by Ministers of 55 governments at the WTO's Fourth Ministerial Conference in Doha in November 2001, will enable AITIC to perform its vital tasks more effectively and put it on a sound legal, professional and financial basis.
AITIC will function through a council of member representatives, headed by an executive director appointed by members. The executive director will manage the day-to-day operations of AITIC and represent the organisation externally. As a fully fledged intergovernmental organisation, with secure sources of financing, AITIC will be able to provide more specialised assistance to LDCs as they attempt to integrate themselves into the international trading system. Its services include the provision of information and advice about developments in the multilateral trading system and the work of the WTO, meeting the particular needs of LDCs without representation in Geneva and organising informal meetings, training sessions and workshops focused on enhancing negotiating capacities and skills.
Negotiations for a new WTO global trade round commenced at Doha in 2001 and are expected to conclude in 2005. The new round, known as the Doha Development Agenda, is the first such round to accept that development must be at the heart of the international trade policy agenda. The integration of developing countries into the world trading system and global economy is the main theme of the Doha Development Agenda.
It was agreed at Doha that trade capacity building programmes had an important role to play in helping developing countries increase their share in world trade. Ireland fully supports the new approach to trade agreed at Doha. However, the lack of adequate institutional and human capacity to deal with the complexities of the multilateral trading system has become a key issue for many developing countries. In my view, all members of the WTO should be able to participate effectively in the multilateral trading system, in the negotiations for a new trade round and in resolving trade disputes.
Speaking as a former Minister of State with responsibility for trade, I am aware of the positive potential of international trade for developing countries. We often hear of the concept of poor countries being able to trade out of poverty. In the era of globalisation, trade is one of the most powerful engines of poverty reduction, economic growth and development. Our own experience in Ireland has demonstrated how trade can transform a country's economic growth. It is imperative that we assist our partners in the developing world to participate fully and as equals in the global economy so they too can benefit from the opportunities offered by more liberalised and globalised trading arrangements. The services provided by AITIC are a significant contribution in this regard.
The increasing difficulties of some developing countries in participating in WTO negotiations, intensified by the Doha work programme, have boosted the demand for AITIC's services. By broadening AITIC's funding base, and putting in place an inclusive governance structure, the agreement acknowledges AITIC's unique role and provides the basis to enable it to respond more effectively to this demand. As well as its co-operation with the WTO, AITIC will also be in a position to co-operate more effectively with other intergovernmental organisations, including the United Nations Conference on Trade and Development, the International Trade Centre and the Advisory Centre on WTO law. AITIC must complement, not duplicate, the work of these other trade organisations. Its transformation has received strong support from donor countries. Its funding for the next five years is guaranteed by pledges totalling over €11 million from the United Kingdom, the Netherlands, Denmark, Finland, Sweden and Ireland. I am proud that Ireland is to join AITIC as a founder sponsor member and we hope other donor countries will join at a later stage. The terms of this agreement need to be approved by Dáil Éireann before ratification, given that it involves a charge on public funds. With the signing and ratification of this agreement, Ireland will pledge to contribute €1.4 million for the initially agreed contribution period of five years, following the establishment of AITIC as an intergovernmental organisation, which is likely to happen later this year. This contribution will come from the overseas development aid budget and contributes towards the percentage of Irish GNP disbursed on development co-operation.
I thank the committee again for its attention. This initiative concerns our involvement with an important intergovernmental organisation and is in line with the policies we have been pursuing in recognising that the 48 LDCs need to be assisted in trade capacity building. This organisation will help do that. There are other means of helping the developing world such as through ODA or our own programme of activities in various countries but having had responsibility for trade I see this as a key area for helping the developing world and I hope the committee agrees withme.
I agree with the Minister of State. We should send our congratulations to the Swiss on their initiative. It is a pleasure for us to be a founding sponsoring member because we have been involved for a long time. We can give considerable help in this area through the provision of information and advice. As we have often found, people do not always know how to access what is available or how to get by the regulations or the problems. We are fairly developed yet have found major problems and difficulties. The help we can give will be valuable to the least developed countries which might have to face similar difficulties. There could also be opportunities for Ireland to be involved in consultancy with the new body as we have expertise in the area which could be helpful.
I welcome the initiative. What unique contribution will it make? Where does it sit in regard to World Bank or IMF initiatives and policies for these countries? Will it have an effect on EU programmes? There is some concern among non-governmental organisations about a shifting in policy by the EU. Does this just involve a shifting around of moneys that might be spent otherwise or is it a new initiative with a unique target group?
It is a new initiative in the area of trade capacity building and is related to the WTO and the Doha round. As one who has represented Ireland at both Seattle and Doha I am conscious of the work done in this area. This initiative is in the same category as those taken there. In Seattle one initiative that was agreed was to provide a legal advice centre in Geneva to help the LDCs. That is now up and running and I am proud that Ireland was involved in that decision. This initiative will include the provision of information and advice about developments in the multinational trading system and the particular needs of LDCs, particularly those that would not have representation in Geneva.
In Seattle and Doha it was starkly clear that the larger more powerful countries had larger delegations. As a nation we were ably represented at official level. I was in Seattle and was joined by the Minister for Agriculture and Food, Deputy Walsh, in Doha. In both places we had an effective team of officials from various Departments including Foreign Affairs, Enterprise, Trade and Employment and Agriculture and Food. It was obvious that the poorer countries did not have the same. Ireland has the IDA, Enterprise Ireland and various State supports to help us trade successfully. The LDCs are so far behind they need this kind of support. This initiative is capacity building support that will try to get through the layers of bureaucracy, legal difficulties and complexities attached to the WTO. It will also help individual countries to deal with the type of situation we have successfully dealt with over the years.
Deputy Carey mentioned developments at EU and World Bank level. The issue at EU level is relevant to NGOs. It relates to the fact that the Development Council has now been integrated into the General Affairs Council. I consider that a separate issue but it is relevant to our work as Ministers. The World Bank was also mentioned. The World Bank and the IMF would clearly be involved in issues of debt cancellation. The World Bank is also concentrated on trade related issues. It would be more involved in trade capacity within the individual countries.
The broad trade agenda is a crucial issue. On my recent visit to Ethiopia I met the Prime Minister and we discussed the huge humanitarian needs of the country. We also discussed the issue of trade and the need for assistance in trade capacity building within the country. The debt issue which is related was also discussed.
I am enthusiastic about the approach being adopted but I have some questions to raise concerning the adequacy of the structure and funding proposed. This body was set up with the support of 55 governments yet the guarantee of funding, as I read it, is only from six EU governments, including our own. I am delighted we are part of that guaranteed funding but the funding over five years is only around €11 million, about €2 million a year. How effective will such an organisation be if that is its complete funding? What funding will the other 49 supporters of the initiative, who agreed to the setting up of AITIC in Doha in November 2001, provide?
What essential support will be available to the LDCs? I agree with the Minister of State about the lack of expertise available in these countries. We tend to take for granted the professional support we get from our Civil Service. That is not available in developing countries. There are 48 of those countries so how will a small, possibly underfunded, organisation provide adequate support to them? We must bear in mind that no great progress was made in the Doha round on some of the complex issues involved. I support the initiative in which Ireland is involved but I want to ensure that this organisation will be adequately funded and resourced to do what in my opinion will be an enormous undertaking in the next couple of years.
We will take questions from two Deputies together.
I suppose all good things must start in a more modest way. I agree with Deputy O'Keeffe that the funding is quite modest at the moment at €11 million. The other countries and their funding are Denmark at €1.6 million, Ireland, €1.4 million, Netherlands, just over €2 million, Sweden, € 1.426 million, Switzerland, €2.687 million and the United Kingdom, €1.5 million. I have referred to the terms of reference and the work programme of the organisation. I agree with the Deputy that there is an urgent need for other countries to come on board. This is a five-year commitment and clearly the whole process will need to be nurtured. Other initiatives such as a legal advice centre is a very important area in relation to the whole negotiations procedure. That too was an initiative in which Ireland was involved in Seattle with other donor countries and that structure is developing and growing. As an initiator of this process I am looking for the approval of the committee. I accept that the funding amount is very modest but it is a very important area for Ireland and other countries to support. We must be in there at the start. I assure the committee that we will monitor the process and we will try to persuade other countries to become involved. It is at a very early stage but we must start the process somewhere.
That makes us one of the founding members and hopefully more of the 55 countries will fulfil their obligations.
I welcome the Minister and I support this initiative. Ireland has seen the miraculous impact of improved trading capacity which has transformed this small country over a short time into a dynamic economy. The Minister will agree that from time to time when we visit our partner countries in sub-Saharan Africa it is very clear that they lack the institutional capacity to trade and in terms of their Civil Service, the human capacity to negotiate and improve their place in world trading. It is important that Ireland takes a lead and is seen as an advocate of economic development as well as alleviating poverty in the third world.