Development Assistance call for Tender

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TERMS OF REFERENCE

SHORT TERM TECHNICAL ASSISTANCE ON TRADE

1. Project Title:  Assessment of   the Trade-related Development Assistance Needs and Capacity Constraints of the  Forum Island Countries in relation to PACER Plus

2. Background

The Pacific Agreement on Closer Economic Relations (PACER) was endorsed and signed at the Forum Leaders’ Meeting in August 2001 and entered into force on 3 October 2002. PACER is a trade and economic cooperation framework agreement between the Forum Island Countries (FICs) and Australia and New Zealand (ANZ) which provides for the future negotiation of free trade arrangements between the FICs and ANZ.

2. In 2009, Forum Leaders, following recommendations by Forum Trade Ministers, launched negotiations for a free trade agreement between the FICs and ANZ commonly referred to as PACER Plus. The PACER Plus, as currently proposed, will be a comprehensive free trade agreement, encompassing a wide range of economic activities. It is envisaged to result in a comprehensive agreement covering, inter alia,  Trade in Goods, Technical Barriers to Trade, Sanitary and Phytosanitary Measures, Rules of Origin, Customs Procedures, Trade in Services, Investment, Labour Mobility, Dispute Settlement  and Development Assistance and Economic Cooperation Chapter with a view to enabling the FICs to realise their aspirations for economic growth and sustainable development.  This presents considerable challenges together with potential benefits to the FICs. These challenges are amplified by the unique constraints many FICs face, such as their small population sizes, geographical dispersion, isolation from key markets, vulnerability to natural disasters, limited natural resources and small domestic markets.

3. The Office of the Chief Trade Adviser (OCTA) is a regional organisation, established in March 2010, comprising of fourteen FIC members.[1] The OCTA’s mandate is to provide broad technical assistance, comprised of advisory, coordination, facilitation and negotiations, to underpin the participation of the FICs in the PACER Plus negotiations with Australia and New Zealand.

4. While most FICs are Small Island States with few natural resources, they attach considerable importance to international trade. Notwithstanding their openness to international trade, they are marginalised in the multilateral trading system and collectively account for an estimated 0.05% of world trade. The export earnings of the FICs are derived from a few export products (such as fish, root crops, betel nut, sugar, butternut squash, vanilla, and coffee), tourism, and remittances from workers mostly employed in Australia and New Zealand. The FICs are mostly countries at very early stages of development, with governments possessing limited financial resources and relying heavily on Official Development Assistance (ODA) to provide basic social services such as health and education. ODA constitutes a substantial part of government revenue for most FICs, the disbursement of which often requires compromises with other national priorities, such as broader trade-related development assistance, which is often necessary for the private sector to engage in productive activities. Australia and New Zealand rank very high among donors of the FICs, in some cases providing the largest aid.

5. The ability of the FICs to secure trade-related development assistance for overcoming supply-side constraints and strengthening the productive capacity plays an indispensable role in enhancing their capacity to realise the objectives of economic growth and sustainable development. The capacity to trade can be undermined by endogenous and exogenous factors militating against productive capacity. Overcoming these constraints requires an overarching framework of not only rules, but also critical trade-related development assistance, comprising the provision of soft and hard infrastructure. The recognition of this at the multilateral level has prompted the WTO Task Force on Aid for Trade, set up in 2005, to categorise trade-related assistance into five broad categories, including trade support for policy and regulation, building productive capacity, trade-related adjustment to deal with trade liberalisation, and trade-related infrastructure

6 .The FICs recognise the importance of trade as a powerful engine of economic growth, but they continue to encounter internal and external barriers in utilising trade as a means to achieve economic growth and sustainable development. The negotiation of trade disciplines under PACER Plus can address some aspects of internal and external barriers to trade. However, internal barriers, such as poor infrastructure, require a different approach given the limited resources available to the FICs. There is wide acceptance that Aid for Trade (AfT) can assist developing countries to increase and diversify their export of goods and services and benefit from increased trade and market access, and facilitate their fuller integration into the global economy. In that regard, AfT is seen an important complement to trade liberalisation undertaken by developing countries.

7. The FICs are committed to utilising trade as an engine of economic growth and sustainable development as demonstrated by regional and national strategies, which many of them have implemented, or are in the process of formulating, representing a holistic and coherent policy document of a private sector-centred development strategy. In particular, National Development Plans have identified the role of the private sector in accelerating the pace of economic growth and reducing poverty through employment creation. At the regional level, the FICs, as Pacific- African Caribbean States (PACPS), have formulated the Pacific Aid for Trade Strategy, which is aimed at addressing the challenges they face in areas such as private sector development and utilising trade as a mechanism for achieving economic growth and sustainable development. The Strategy affirms the desire of the PACPS to harness Aid for Trade resources to build trade-related infrastructure, and improve the production of goods and services, in order to enhance private sector competitiveness. Its five focal projects include activities which contribute to the capacity of the private sector to engage in international trade, namely facilitating market access for FICs’ products by addressing SPS and TBT measures, customs and trade facilitation, services sector development, private sector development, and developing and implementing comprehensive trade policy frameworks.

8. With respect to the envisaged arrangement under PACER Plus, there will be a need to provide the FICs technical and financial assistance to enable them implement the Agreement and to utilise opportunities arising from it. There is convergence among the Parties that Australia and New Zealand will not only provide the FICs assistance to implement obligations arising from the Agreement, but also broader trade-related development assistance to enable them benefit from the framework to be established under PACER Plus.

9. It is, therefore, necessary to conduct a baseline assessment of FICs’ capacity in the light of the implementation needs arising from PACER Plus as well as an analysis of broader trade-related development assistance needs,  and to highlight any capacity constraints. The assessment of the implementation needs will take account of the Article-by-Article analysis of the draft PACER Plus Agreement done by the OCTA to determine any obligations and assess the existing capacity of the FICs to abide by such obligations. In doing so, specific actions for fulfilment and primary and secondary institutions responsible for implementation are to be  identified.

10. The study will also undertake an assessment of the nature and scale of development assistance needed by the FICs to derive benefits from PACER Plus. Consideration should be given, where necessary, to common elements in the likely approach to several of the development assistance issues and the similarity in the technical assistance that will be required to address such issues. This may require the disbursement of technical assistance at the regional level through existing or newly created regional institutions, as an efficient way of channelling technical assistance to the FICs. Project costs should be broken down by regional and country-specific national components.

3. Objectives

11. To assess and compile trade-related development assistance needs of the FICs to benefit from the envisaged PACER Plus Agreement.

12. To identify the capacity constraints faced by FICs which may limit their ability to implement and benefit from the proposed PACER Plus agreement.

In line with the WTO AfT categories, possible implementation assistance and broader trade-related assistance could include the following:

  1. Trade policy, regional integration and trade facilitation
    • PACER Plus implementation,
    • meeting technical regulations and standards of trade partners
  2. Tax and revenue support
  3. Regulatory reform and policy, including in the services sectors
  4. Private sector development
    • investment, SME support and business incubators
    • market and product development,
    • key industries;
  5. Human resources development: training and retraining,
  6. Trade-related infrastructure

13. To recommend options, in order of priority, for implementing development assistance for efficient channelling of technical assistance to FICs.

4. Specific Tasks

14. The consultant(s) will prepare a study report, entitled “An Assessment of the Trade-related Development Assistance Needs and Capacity Constraints of the Forum Island Countries in relation to PACER Plus.” The study report will comprise:

  1. A baseline analysis of FICs’ current trade and economic cooperation relationships with Australia and New Zealand and identification of areas where the FICs might benefit from those relationships in future;
  2. An assessment, carried out on a sectoral basis, of the national needs and capacity constraints limiting the FICs ability to effectively implement and benefit from a PACER Plus agreement, structured in line with each FIC’s offensive and defensive interests, and interventions necessary to address those needs and constraints.

15. In undertaking the study, the consultant(s) should draw on detailed research already conducted relevant to the potential impact of trade liberalisation on the FIC economies. The non-exhaustive list of trade and trade-related areas that have been identified for inclusion in the PACER Plus agreement include:

  • Trade in Goods
  • Sanitary and Phytosanitary Measures
  • Technical Barriers to Trade
  • Customs Procedures
  • Rules of Origin
  • Trade in Services
  • Investment
  • Development Assistance
  • Labour Mobility
  • Transparency
  • General Provisions and Exceptions
  • Initial Provisions
  • Final Provisions
  • Institutional Provisions
  • Dispute Settlement

16. The study should cover all sectors of the economy but pay particular attention to those industries or specific products that have the most scope for providing significant gains from trade for FIC economies, including but not limited to agriculture, marine resources, and tourism. [2]

5. Baseline study

17. For all sectors of the economy relevant to trade and trade-related areas covered by the PACER Plus agreement, the consultant(s) should assess:

  1. The present and expected future situation with respect to trade and economic cooperation between individual FICs and Australia and New Zealand. This should include, as far as can be determined, the nature, quantity and value of imports and exports in both directions and the current and future treatment of FIC exports by Australia and New Zealand, taking into account potential change in tariffs and relative preferences.
  2.  Specific areas where difficulties have been encountered to date in deepening trade and economic cooperation, including behind the border barriers to trade within the FICs (supply side constraints), and beyond the border barriers to trade in Australia and New Zealand, including but not limited to standards and conformance, SPS and TBT;
  3. Possible contribution that deepening of trade and economic cooperation between the FICs and Australia and New Zealand might make to sustainable development of the FICs; and
  4. The current capacity of FIC governments to implement commitments in the mentioned areas under the PACER Plus agreement.

6. Needs assessment

18. For all the sectors relevant to trade and trade-related areas identified for inclusion in the PACER Plus agreement, and taking into account the identification of individual FIC interests in the PACER Plus agreement, the consultant(s) should identify:

  1. The areas in which the public sector and non-state actors face capacity constraints and development needs with respect to implementation of the future PACER Plus agreement;
  2. The areas in which the public sector faces capacity constraints and development needs with respect to their ability to take advantage of opportunities that might become available through the PACER Plus agreement, including addressing those specific areas where difficulties have been encountered to date in deepening trade and economic cooperation, including behind the border barriers to trade within the FICs (supply side constraints), and beyond the border barriers to trade in Australia and New Zealand;
  3. The areas where the public sector faces capacity constraints with respect to securing the potential benefits of the PACER Plus agreement, including addressing those specific areas where difficulties have been encountered to date in deepening trade and economic cooperation, including addressing behind the border barriers to trade within the FICs (supply side constraints) and beyond the border barriers to trade in Australia and New Zealand
  4. The interventions necessary to address the above capacity constraints, including identification of where further analysis/research is needed in order to design suitable support to the public and private sectors and other relevant stakeholders;
  5. The interventions necessary to address the above capacity constraints, including identification of where further analysis/research is needed in order to design suitable support to the public and private sectors and other relevant stakeholders;
  6. A development cooperation arrangement that would assist in the reduction of poverty and proactively deal with the negative impacts of economic integration. Some of the development cooperation issues to be considered include: development of social safety nets, special re-training programs, identifying investment incentives that could stimulate growth in investment levels of both Australia and New Zealand and FIC nationals, consideration of possible budgetary support towards adjustment programmes, infrastructure development, protection of the environment, trade and investment capacity building, good governance indicators, institutional strengthening of key trade and investment agencies, building private sector capacity, dealing with legislative issues and any other related issues.

7. Expected Outcomes

19.The expected outcomes are:

  1. A national level baseline analysis of the current capacity of individual FICs to engage in international trade and the current trading relations between FICs and Australia and New Zealand;
  2. Ab identification of individual FICs’ offensive and defensive interests with respect to the trade and trade-related areas that have been included in the PACER Plus negotiations and analysis of products/ industries/sectors of export potential and how the FICS could be supported through targeted measures to enable them realise benefits from PACER Plus and other trade agreements ;
  3. An identification of strategic ways in which investment growth can be stimulated in the FICs, including determining the best approach to increasing investments in areas of strategic importance, increasing local participation in investments, financing of investments, and determining incentives structure that could encourage Australia and New Zealand investments in the region.
  4. An assessment, carried out on  a sectoral basis, of the capacity constraints faced by individual FICs with respect to their ability to effectively implement and benefit from the envisaged PACER Plus agreement, structured in line with the identified offensive and
  5. An identification of development cooperation options, including possible approaches to mutually beneficial partnerships in the sustainable development of productive capacity, human resources, infrastructure, adjustment programmes and basic services. The assessment will also identify options for a development cooperation arrangement that would assist towards the reduction of poverty and proactively deal with the negative impacts of economic integration
  6. Further research to enable the FICs to fully address their development needs with respect to the implementation and securing benefits of the proposed PACER Plus agreement

20. The outcomes of the study will provide a body of information to be considered alongside other relevant studies conducted at the national and regional level when FIC governments are considering their offensive and defensive interests and forming their negotiating positions.  The consultants will undertake visits to each of the 14 FICs, where meetings of relevant stakeholders will be convened to assist in assessing the nature and scale of implementation and development assistance needs in each FIC.

An estimate of unit costs for technical assistance and provision of other resources shall be provided.

8. Outputs and indicative Timelines

21. The required outputs are:

  1. A draft study of no more than 60 pages in length, including up to 10 pages of Executive Summary but excluding detailed annexes on individual FICs, to be submitted to the OCTA no later than [….]
  2. PowerPoint presentations to highlight the key findings of the study to relevant stakeholders by no later than […]. The consultant will make the presentations at a regional workshop.
  3. A final report of no more than 60 pages in length, including up to 10 pages of Executive Summary but excluding detailed  annexes on individual FICs, to be submitted to the OCTA no later than […], taking into account comments from the FICs on the draft report.

A final report of no more than 60 pages in length, including up to 10 pages of Executive Summary but excluding detailed  annexes on individual FICs, to be submitted to the OCTA no later than […], taking into account comments from the FICs on the draft report

9. Expertise required

The consultant(s) should have:

  1. Detailed knowledge of the key economic and trade issues relevant to the FICs
  2. A sound understanding of the needs and concerns of developing countries relating to participation in the international trading system and trade capacity-building; first-hand understanding of FICs’ needs and concerns in this regard would be an advantage
  3. Demonstrated familiarity with the social and economic conditions of the FICs; first-hand experience in the FICs would be an advantage;
  4. Proven ability to write in a clear and concise manner and to communicate effectively orally; and
  5. Proven ability to meet strict deadlines.

10. Timeframe and Proposal

23. One hundred (100) working days are allocated for the duration of this study, including in-country consultations within the FICs, as required. It is intended to award and conclude a consultancy contract by […] so work commences no later than […].

24. In submitting a proposal to conduct the study, interested consultants should deal with both technical and financial aspects. From the technical perspective, the proposal should demonstrate a clear understanding of the ToRs and set out, with appropriate explanatory comments, a methodology, work plan and timelines for completion of the work.

25. A proposal should also contain financial details

  • expressed in Euros;
  • Broken down by fees per man-day and lump sum amount;
  • Show separately the cost of required travel to carry out the work and any reimbursable expenses

Submissions should also include:

  • detailed curriculum vitae of the consultant(s);
  • the names and contact details of three referees;
  • the dates of availability to take up the consultancy.

11. Confidentiality/ownership of material

26. No information acquired by the consultants in relation to the consultancy may be disclosed to anyone, without first seeking and obtaining the prior written consent of the OCTA. Confidentiality of the study report and all information obtained in connection thereto shall be maintained. The ownership of the report and all materials produced in  relation to the consultancy shall vest exclusively with the OCTA.

12. Application Deadline

27. Submission of proposals responding to this invitation should be received by the OCTA by 5pm on 16th January 2015

For further information regarding these ToRs, please contact Mr Adeshola Odusanya at aodusanya@octapic.org .

 


[2] This is for illustrative purposes only. It is for individual FICs to determine on which sectors they believe will be of most interest to concentrate.


[1] Cook Islands, Fiji, the Federated States of Micronesia, Kiribati, Nauru, Niue, Palau, Papua New Guinea, the Republic of Marshall Islands, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu.