Microtrade and public procurement: Facilitating "Aid for Trade" through government purchasing

Abstract

The concept of Microtrade is noteworthy because it can be a realistic policy alternative for poverty reduction in least developed countries (hereinafter LDCs). For the successful implementation of this concept, the following issues must be addressed: 1) the creation of demand, 2) supply and demand matching, and 3) shipping and distribution. In addressing these issues, public procurement can be a useful tool. In relation to creating demand, the preference for Microtrade products should be actively implemented. Public entities in developed countries can set targets for the purchasing of microtrade products and make efforts to meet these targets. For supply and demand matching, an e-procurement system should be executed. Technical assistance for strengthening the e-procurement system in LDCs and registration assistance for local producers are necessary. In this process, donor countries' international development institutions can take an active role. Incentives can be given to shipping companies which ship locally produced products (hereinafter LPPs) with very low costs. In the tendering stage of choosing shipping companies by donor countries' aid agencies, additional points can be given to enterprises which actively participate in providing shipping services for microtrade products. Aid and trade should complement each other, and "Aid for Trade" should be integrated with public procurement. In the long term, establishing certification of microtrade products will definitely facilitate this integration. © 2012 The Law and Development Review.