Nepal eyes EIF aid for trade mainstreaming

Nepal plans to apply for the Tier 2 aid under Enhanced Integrated Framework (EIF) Trust Fund that is meant for the Least Developed Countries (LDCs) under the global trade regime.
The $3 million Tier 2 aid could be granted for a period of five years for the countries that have already prepared National Trade Integration Strategy (NTIS) and need to implement the strategy.
"Though The Aid for Trade was meant for supply capacity enhancement of World Trade Organisation (WTO) members, most of the aid receipient countries are not LDCs," according to national coordinator of NECTRADE Shiv Raj Bhatta.
Nepal doesnot figure in the top 20 aid receipient countries, where India, Vietnam, Afghnistan, Iraq, Ethiopia are five of the top aid reciepients.
"However, Nepal has received aid from EIF Tier 1 Fund under the $170 million Trust Fund that has been established to help specifically to the LDCs," he said, adding that including Nepal only 14 countries have received the aid, whereas there are 49 LDCs are the members in global trade regime.
Aid for Trade aims to help developing countries, particularly LDCs, develop the trade-related skills and infrastructure that is needed to implement and benefit from WTO agreements and to expand their trade.
The EIF is the main mechanism through which LDcs access to Aid for Trade
The EIF is a multi-donor programme, which supports LDCs to be more active players in the global trading system by helping them tackle supply-side constraints to trade.
Earlier EIF was called Integrated Framework (IF) and was set up in 1997 at the WTO but subsequently reviewed in 2005.
The LDCs can use the EIF as a vehicle to assist in coordinating donors' support and to lever additional Aid for Trade resources, whereas donors can sign up to the EIF as a vehicle to deliver on their initial Aid for Trade commitments.
To access Aid for Trade, developing countries must clearly prioritise their needs. In return, their development partners need to provide trade-related assistance and capacity building to meet the demand with a supply of resources.
To bridge the gap between demand and supply as effectively as possible, developing countries need to mainstream their demand for Aid for Trade into their national development strategies, such as the Poverty Reduction Strategy Papers (PRSPs), since these form the platform on which donors base their aid planning.
Additional funds sought through the EIF process over and above the EIF Trust Fund represent a significant proportion of Aid for Trade. The EIF therefore forms a key pillar within the much larger edifice of Aid for Trade.Tier 1 of the EIF Trust Fund provides funding to strengthen LDCs' capacity to manage the benefits of Aid for Trade.
The funding helps to incorporate trade into national development plans and to translate trade priorities into bankable projects for broader Aid for Trade funding.
The Trust Fund also supports the implementation of some of the activities identified as priorities, taking into account the availability of alternative funding and the quality of the projects.
"Tier 2 of the Trust Fund provides bridging funding to 'jump start' activities through project preparation, feasibility studies, funding of smaller projects, including seed projects," he said. "However, for most activities identified through the EIF, resources for implementation have to be mobilised from other sources beyond the EIF Trust Fund."