Multi-donor Trust Fund for Trade and Development

In November 2007 PRMTR launched the multi-donor trust fund for trade and development (MDTF) to help developing countries integrate trade into their economic growth and poverty reduction strategies.  The MDTF was inaugurated with $24 million in contributions from Sweden and the United Kingdom.  A number of other donors have expressed interest in contributing to the trust fund. 

Objectives
The MDTF’s overall objective is to enable the World Bank to support trade-related activities at the country, regional and multilateral level that contribute to growth and poverty reduction in developing countries by:

• enabling Regional departments to respond to client demand for trade-related technical assistance and capacity building
• developing analytical tools to assist countries to define trade policy strategies
• expanding research on international trade topics still not well understood and to develop datasets to fill information gaps
• diffusing knowledge on international trade to developing countries

The MDTF also serves as a key vehicle for implementing President Zoellick’s plans to expand the World Bank’s agenda on trade and competitiveness. More information..

Governance Structure
The MDTF Steering Committee provides overall direction for the trust fund. The Steering Committee consists of representatives from each contributing donor, the Director of the World Bank Trade Department, and a World Bank Regional PREM Director.  The Steering Committee decides on overall funding allocations for annual work programs.  It also decides on changes to the Governance Structure of the trust fund, reviews the trust fund's overall performance, and approves additional donations and contributors.

Programmatic Approach
The MDTF is based on programmatic approach where funding is allocated to annual work programs developed by Regions and the Trade Department. Each Region and the Trade Department develops an annual work program of activities after soliciting proposals from country and sector teams working on trade issues.  These work programs respond the specific needs of the Bank’s client countries and are aligned with the World Bank’s trade strategy. Work programs are developed transparently with the participation of all units involved in trade issues.

Eligible Activities
Activities financed by the trust fund may be prepared and implemented by the World Bank, country governments, and non-governmental agencies. Specific types of eligible activities include, inter alia, the following:

• Policy analysis and diagnostics
• Technical assistance and capacity building
• Research on global trade issues
• Production of trade data and trade analysis tools
• Knowledge sharing and dissemination
• Project preparation for lending activities

Examples of activities approved for financing under the MDTF in the first year of its operation include:

• A study on services trade and South Asian development;
• An assessment of trade facilitation between Mongolia and its neighbors, and capacity building for a more effective logistics supply chain network between these countries;
• Development of a trade and competitiveness strategy for Tanzania;
• Capacity building and technical assistance for the accession of Laos to the WTO
• Research on welfare and poverty impacts of trade reforms at the household and firm level; and
• Policy analysis on emerging carbon labeling standards and impacts on the exports of low income countries.

Contacts
For questions about the MDTF please contact:

Philip Schuler, Senior Economist, PRMTR, pschuler@worldbank.org

Yolanda Strachan, Research Analyst, PRMTR, ystrachan@worldbank.org

Last updated on April 3, 2008