Aid

Trade News: From ICTSD: Aid for Trade Articles and Results

Aid for Trade: Showing results. There is a large and growing body of evidence (1) about the positive links between openness to trade and economic growth, which depending on its pace and pattern is important for sustained poverty reduction. (2) This virtuous relationship can be observed in many developing countries that have succeeded in expanding their domestic markets regionally or globally. Steady reductions in trade barriers have enabled these countries to rapidly integrate into the world economy through export-led industrialization thereby sharing the prosperity generated by globalization.

Third Global review of Aid for Trade: A snapshot of the outcome. Aid for Trade (AfT) is about getting trade to work for development. It assists countries and regions to benefit from the opportunities offered by the multilateral trading system in order to generate economic growth and promote poverty alleviation.

Does it work? Aid for Trade through the evaluation prism. In the early days after the Hong Kong Ministerial in December 2005, trade negotiators, especially from developing countries, gauged their success in Aid for Trade (AfT) merely by increases in amounts.  By this measure, the AfT initiative has indeed been successful, rising from $25 billion in 2005 to $40 billion today.

The achievements and risks of Aid for Trade. In a review of the 25 most important multilateral donors, the five regional development banks, and the 24 OECD bilateral donors, UNIDO found that the greater interest in trade and in Aid for Trade has brought a major increase in the number of donors and amounts.

An aide for Aid for Trade – Early findings and recommendations from country studies.  The WTO and the OECD have restricted their monitoring mainly to the global level and the project level, primarily through ‘case stories’, while overlooking AfT effectiveness at the national level, for which there have been many calls by numerous countries and experts.

Aid for Trade effectiveness: What do evaluations say? The Aid for Trade (AfT) initiative has been hailed as highly successful in raising the profile of trade as a tool for development. Developing countries have increasingly mainstreamed trade in their development strategies, while donors have responded by mobilizing additional resources for trade-related programs and projects (together referred to as operations).

Where Aid for Trade is failing and why: the example of Malawi. AFT is proving to be ineffective in countries that have failed to reconcile the trade and development spheres. What should be the response of the trade and development communities in such countries?

Aid for Trade : Success stories and lessons. Trade liberalization, in the context of the multilateral trading system (MTS) and regional integration processes, such as for instance, the Common Market for Eastern and Southern Africa (COMESA), the Southern African Development Community (SADC), the East African Community (EAC), have provided African, Caribbean and Pacific (ACP) countries with many market access opportunities. However because of supply-side constraints including the lack of necessary infrastructure (roads, ports, telecommunication facilities…) and insufficient trade facilitation institutions, many Least Developed Countries (LDCs) have been unable to take advantage of these market access opportunities. Trade, which is yet often considered an engine of growth, has therefore not been fully used to spur economic growth in some of these countries.

Download an OECD PDF on Aid For Trade

Comments are closed.