Supply Capacity - IDB

Since its inception in 2008, the Inter-American Development Bank (IDB) Aid for Trade Strategic Thematic Fund (AfT) has been an important and effective tool in supporting LAC countries' efforts to facilitate trade. The contributions from Canada, Chile, Switzerland, and the United Kingdom to the AfT Fund have served as an operational framework aimed at addressing supply-side obstacles, such as excessive red tape, inadequate financing, institutional weakness or poor infrastructure, thereby contributing to the WTO's 2005 Aid for Trade Initiative. Later, Canada, Colombia, Mexico, Spain and the United States joined efforts to complement the AfT Fund establishing the Multidonor Regional Infrastructure Integration Fund (RIIF) and the European Union (EU), Japan and Korea have also provided support to integration projects in LAC. Through non-reimbursable technical assistance, the AfT and the RIIF Funds have supported global, regional and national priorities in the "software" (regulatory frameworks) and "hardware" (infrastructure investments) of trade and integration through priority areas such as:

• Implementation of trade agreements;
• Expansion and diversification of trade;
• Reduction of transaction costs;
• Compliance with agricultural export standards;
• Regulatory harmonization;
• Training and capacity building; and
• Leveraging resources for integration investments

Resources of the AfT and RIIF are now depleted, after jointly approving 51 projects totaling US$34 million.

Building on these funds' successful achievements, in 2016 the IDB merged AfT and RIIF topics into the new Multi-Donor Regional Integration Fund (RIF). The RIF covers challenging and emerging aspects of LAC's regional and global integration agenda, i.e., implementing and taking advantage of trade agreements, reducing logistics and transport costs, and promoting productive integration while continuing to support intergovernmental platforms and emerging integration initiatives. The RIF has three main areas of intervention:

• Improvement and regional harmonization of legal procedural frameworks on infrastructure, trade, trade facilitation and security, logistics, trade security, energy interconnection, telecommunications and financial integration.
• Systematic and results-based institutional capacity building for the implementation of FTAs, adoption of policies and procedures for trade facilitation and security, especially in the framework of the WTO Trade Facilitation (“Bali”) Agreement, trade and investment promotion and country participation in regional or cross-border integration initiatives and value chains.
• Increased mobilization and leveraging of resources committed to strategic integration and trade projects for LAC countries through Bank loan and grants with support from donors.