Ministerial Conference Ministerial Conference Aid-for-Trade Roadmap for SPECA Baku Business Center, Azerbaijan, 1-2 December 2010 UNIDO Project Concept:

Ministerial ConferenceMinisterial Conference

Aid-for-Trade Roadmap for SPECABaku Business Center, Azerbaijan, 1-2 December 2010

UNIDO Project Concept:

Trade Capacity Building of ECO/SPECA Member States in Standards, Metrology, Testing and Quality Infrastructure

Ouseph PadickakudiProgramme Manager

Trade Capacity Building Branch UNIDO 1

2

T h e m a t i cP r i o r i t i e s

E n e r g y a n d e n v i r o n m e n t

T r a d e c a p a c i t y - b u i l d i n g

P o v e r t y r e d u c t i o n t h r o u g h p r o d u c t i v e a c t i v i t i e s

L o n g - t e r mG o a l

T o c o n t r i b u t e t o t h e a c h i e v e m e n t o f t h e M i l l e n n i u m D e v e l o p m e n t G o a l s ( M D G s ) , i n p a r t i c u l a r t o p o v e r t y e r a d i c a t i o n t h r o u g h s u s t a i n a b l e i n d u s t r i a l d e v e l o p m e n t .

P r o g r a m m eC o m p o n e n t s

I n d u s t r i a l P o l i c y , B u s i n e s s E n v i r o n m e n t a n d

I n s t i t u t i o n a l S u p p o r t

E n t e r p r i s e U p g r a d i n g f o r T r a d e E n h a n c e m e n t R e n e w a b l e E n e r g y

R u r a l a n d W o m e n ’ s E n t r e p r e n e u r s h i p D e v e l o p m e n t

P r o m o t i o n o f D o m e s t i c I n v e s t m e n t , F D I a n d A l l i a n c e s

S M E C l u s t e r D e v e l o p m e n t

A g r o - p r o c e s s i n g a n d V a l u e C h a i n D e v e l o p m e n t

R u r a l E n e r g y f o r P r o d u c t i v e U s e

S u s t a i n a b l e P r o d u c t i o n i nP o o r C o m m u n i t i e s

T e c h n o l o g y D i f f u s i o n

I n n o v a t i o n S y s t e m s , T e c h n o l o g y M a n a g e m e n t a n d F o r e s i g h t

M o d e r n i z a t i o n o f E x p o r t -o r i e n t e d A g r o - i n d u s t r i e s

S M E E x p o r t C o n s o r t i a

S t a n d a r d s , M e t r o l o g y , T e s t i n g a n d C o n f o r m i t y

C l i m a t e C h a n g e a n d I n d u s t r i a l E n e r g y E f f i c i e n c y

C l e a n e r a n d S u s t a i n a b l e P r o d u c t i o n

W a t e r M a n a g e m e n t

M o n t r e a l P r o t o c o l

S t o c k h o l m C o n v e n t i o n

C o m p e t i t i v e n e s s A n a l y s i s a n d T r a d e - r e l a t e d P o l i c i e s

C o r p o r a t e S o c i a l R e s p o n s i b i l i t yf o r M a r k e t I n t e g r a t i o n

UNIDO – Key Thematic PrioritiesUNIDO – Key Thematic Priorities

Trade Figures: SPECA 2009Trade Figures: SPECA 2009

Trade balance gap: oil & gas exporters and other SPECA countriesTrade balance gap: oil & gas exporters and other SPECA countries

Trade Surplus - Oil & Gas Exporters: Azerbaijan, Kazakhstan and TurkmenistanTrade Surplus - Oil & Gas Exporters: Azerbaijan, Kazakhstan and Turkmenistan Trade Surplus – UzbekistanTrade Surplus – Uzbekistan Trade Deficit – Kyrgyzstan and TajikistanTrade Deficit – Kyrgyzstan and Tajikistan

3

Countries Exports(USD million)

Imports

(USD million)

Trade balance

(USD million)

Azerbaijan 21,097 6,154 14,583

Kazakhstan 43,839 28,774 15,065

Kyrgyzstan 1,726 2,987 -1,261

Tajikistan 1,038 2,770 - 1,732

Turkmenistan 6,736 4,109 2,628

Uzbekistan 10,735 9,023 1,712

SPECA total 85,172 54,177 17,707

HS*

code

Product group Share in % 2008

Share in % 2009

All products 100 100

27 Minerals, fuels, oils, distillation products, gas, coal, electricity 78,2 71,9

72 Iron and steel 4,6 4,7

28 Inorganic chemicals, precious metal compounds, isotopes 2,1 4,1

74 Copper and articles thereof 2,5 3,0

26 Ores, slag and ash 1,8 2,8

71 Pearls, precious stones, metals, coins etc. 1,3 2,7

52 Cotton 1,1 1,5

08 Edible fruit, nuts, melons 0,6 1,2

76 Aluminum and articles thereof 0,7 1,1

79 Zinc and articles thereof 0,6 0,7

10 Cereals 0,8 0,6

41 Raw hides and skins (other than fur skins) and leather 0,4 0,6

Source Regional Review Aft, Oct 2010, p. 12-13 Note: data partially based on mirror statistics; reporting may have affected the totals

Key Exports in 2008 & 2009Key Exports in 2008 & 2009

4* Harmonized Commodity Description and Coding System

5

BORDER REJECTIONSDATE NOTIFIED BY REF. REASONS FOR NOTIFYING PRODUCT CATEGORY Country

12/10/2010 PL 2010.BSRprohibited substance DDT (0.07 mg/kg - ppm) in hazelnut kernels from Azerbaijan nuts, nut products and seeds AZERBAIJAN (AZ)

24/06/2009 DE 2009.0811unauthorised use of colour E 102 - tartrazine in pasta made from durum wheat semolina from Kazakhstan cereals and bakery products KAZAKHSTAN (KZ)

7/8/2009 BE 2009.BLFimproper health certificate(s) for pistachios from Tajikistan, dispatched from Turkey nuts, nut products and seeds TAJIKISTAN (TJ)

24/02/2010 BE 2010.AIJ

aflatoxins (B1 = 101; Tot. = 138 / B1 = 61; Tot. = 78 / B1 = 61; Tot. = 80 µg/kg - ppb) in pistachios from Kyrgyzstan, dispatched from Turkey nuts, nut products and seeds KYRGYZSTAN (KG)

10/11/2010 NL 2010.BYQochratoxin A (30 µg/kg - ppb) in dried raisins from Uzbekistan fruit and vegetables UZBEKISTAN (UZ)

Source: http://ec.europa.eu/food/food/rapidalertRASFF Portal 2010

Selected Export Rejections of SPECA

High dependence on natural resources export Trade flows (95%) mainly outside SPECA’s area Untapped intra-regional trade potential High level of product and market concentration:

62% of SPECA exports destined to

China, Italy, France, Russia, Germany and USA

Shifting trade paradigm necessary:

Intra-regional trade integration and harmonization policies

Export diversification

Targeted promotion of specific sectors with high export potential

Improvement of quality standards

Improvement of business conditions and trade infrastructure

Promotion of export consortia

Trade Patterns Trade Patterns

6

No.7

National

Quality

Infrastructure

Testing

Standardization

Metrology

Accreditation

Certification

CODEX

National Quality Infrastructure & International LinkagesNational Quality Infrastructure & International Linkages

7

M A R K E T S

P R OD U C T S

Products to Market

….by upgrading supply capacities and standards infrastructures

Connect to the Market

DevelopCompetitive

ManufacturingCapability

Prove Conformity with

Market Requirements

Compete Conform Connect

Connect to the Market

DevelopCompetitive

ManufacturingCapability

Prove Conformity with

Market Requirements

Compete Conform Connect

Integrating into Global Trade: UNIDO 3 CsIntegrating into Global Trade: UNIDO 3 Cs

UNIDO projects & initiatives on trade development in SPECA countries

Compete

Conform

Connect

SPECA Regional Network for Conducive Business Environment * Agro processing and marketing for small-scale producer groups, Kyrgyzstan* Strengthening Damu Center for Development of Industrial Enterprises, Kazakhstan Fostering competitive clusters, Uzbekistan

Trade Capacity Building of ECO Member States in Standards, Metrology, Testing and Quality Infrastructure* Market surveillance project proposal in cooperation with UNECE, Azerbaijan* Trade capacity – building for Azerbaijan to reap the benefit of accession to WTO

* Included in SPECA Project Portfolio8

UNIDO Project Concept: Trade Capacity Building of SPECA Member States in Standards, Metrology, Testing

and Quality Infrastructure

Reasons for UNIDO Assistance:Reasons for UNIDO Assistance:

Lack of harmonization of standards to enforce regional

and international trade Lack of internationally recognized conformity

assessment systems Necessity to enhance human resources in conformity

assessment Weak quality culture Non membership of WTO (except Kyrgyzstan)

9

Selected assessed needs

UNIDO SMTQ Needs Assessment in SPECA RegionComprehensive report on SPECA infrastructure needs assessed

by UNIDO in 2008 -2009

Azerbaijan National quality policy benchmarking and review

Quality management systems certification bodies

Development, application and audit of management

system of labour protection

Pressure, temperature, mass, force, physical, food and

chemical laboratories accreditation

Personnel certification body

Product certification scheme accreditation

Development of inspection organizations

10STRENGTHEN NATIONAL/REGIONAL CONFORMITY ASSESSENT SYSTEM

UNIDO Project Concept: Trade Capacity Building of SPECA Member States in Standards, Metrology, Testing and Quality (SMTQ) Infrastructure

OutcomeOutcome

Efficient SMTQ set up to support market surveillance and contribute to :

Health and safety of people Conserving environment Strengthening the control of imported substandard goodsTrade growth with quality: Prosperity and HAPPINESS

ObjectiveObjective

To strengthen SMTQ infrastructure of SPECA member states through enhancing capacity of conformity assessment system including laboratories and building technical staff capacity on implementation of standards relevant to WTO requirements

11

OutputsOutputs

- National standards formulated, harmonized and published

- Quality Management System certification bodies accredited

- Product certification scheme strengthened at national standards bodies

- Food, chemical and microbiology testing laboratories accredited

- TBT/SPS enquiry points, standards library and documentation

centre established/strengthened

- Fuel testing laboratories capacity enhanced and strengthened

- Legal and industrial metrology laboratories

strengthened/accredited

Trade Capacity Building of SPECA Member States in Standards, Trade Capacity Building of SPECA Member States in Standards, Metrology, Testing and Quality InfrastructureMetrology, Testing and Quality Infrastructure

ActivitiesActivities

• Enhancement of managerial & technical capacities

• Overcoming Technical Barriers to Trade and SPS

constraints meeting WTO requirements

• Fostering integration of ECO members into

regional and international trading systems

• Mutual recognition agreements to strengthen trade

• Enforcement of quality management systems at

manufacturing processes

• Strengthening testing and calibration capacities

Trade Capacity Building of SPECA Member States in Standards, Trade Capacity Building of SPECA Member States in Standards, Metrology, Testing and Quality InfrastructureMetrology, Testing and Quality Infrastructure

SPECA Project CounterpartsSPECA Project Counterparts

Kazakhstan Kazakhstan Institute of Standardisation (KazInSt) Kazakhstan Institute of Metrology (KazInMetr) National Accreditation Centre

Kyrgyzstan National Institute of Standards and metrology (NISM - Kyryzstandart) Kyrgyz Centre of Accreditation

Tajikistan Agency of Standardisation, Metrology, Certification, Trade & Inspection

Uzbekistan Uzbek agency of Standardisation, metrology and Certification (UzStandart)

Azerbaijan State Committee on Standardization, Metrology and Patents of the Republic of Azerbaijan (AZSTAND)

Turkmenistan The Major State Service "Turkmenstandartlary“ (MSST)

14

Government Ownership CommitmentGovernment Ownership Commitment

Resources for availability of laboratory buildings

Hiring of professional and support staff

Conformity assessment sustainability plan

Promotion of services within country: public goods

Pursue WTO membership

15

Trade Capacity Building of SPECA Member States in Standards, Trade Capacity Building of SPECA Member States in Standards, Metrology, Testing and Quality InfrastructureMetrology, Testing and Quality Infrastructure

Total: $ 4 500 500

Outputs USD

Formulation and publication of national standards S 80 000

Development of ISO 9001, ISO 14001, and ISO 22000 certification services Q 110 000

Accredited product certification scheme at national standards bodies T 150 000

Food, chemical and microbiology testing laboratories accredited T 1 850 000

TBT enquiry point, standards library and documentation centre S 320 000

Fuel testing laboratories enhanced and strengthened T 710 000

Industrial and legal Metrology Laboratories strengthened / accredited M 1 470 000

Total budget sought SMTQ $ 4 500 000

16

Project budget and resources sought from donors

UNIDO SMTQ Projects: US$ 100 MnUNIDO SMTQ Projects: US$ 100 Mn (2007-2011)(2007-2011)European Union Bangladesh, Cameroon, Cote D’Ivoire, Nepal, Pakistan,

ECOWAS, UEMOA

Norway East Africa, Mekong, Sri Lanka, Bangladesh; SAARC, Zambia, Uganda, GLOBAL FORUM

Switzerland Vietnam, Tanzania, Ghana, Mozambique, Tanzania, Lebanon, Egypt

Italy Egypt, Iraq

Sweden Trade Trust Fund, AIDMO

Poland Ukraine, Moldova

Korea Mongolia, South -South Metrology Centre

India South-South Lab Testing Centre, Timor-Leste

Finland Trade Trust Fund

Spain China, Egypt

18

Regional Integration and Intra-Regional Trade Growth with Regional Integration and Intra-Regional Trade Growth with Quality through SMTQ Capacity BuildingQuality through SMTQ Capacity Building

UNIDO is at your serviceUNIDO is at your servicefor SPECA national for SPECA national

happiness happiness

19

Thank YouThank Youfor your attention!for your attention!