Aid for Trade: one year on
A series of WTO meetings on Aid for Trade later this year will determine whether and in what form the Aid for Trade initiative will survive.
A series of WTO meetings on Aid for Trade later this year will determine whether and in what form the Aid for Trade initiative will survive.
Aid to Africa is expected to rise steadily if the pledges at the G8 meeting in Gleneagles in 2005 will indeed lead a doubling of aid to Africa by 2010. Judging by the pledges, Aid for Trade is also likely to increase in response to last year’s WTO Ministerial in Hong Kong and the Aid for Trade Task Force created in 2006. Rising aid flows, particularly when directed at increasing a country’s capacity to trade, are crucial steps to achieving the economic growth that is needed for poverty reduction in Africa.

Container ship at the port of oakland, california
License: Creative Commons
Credit: pbo31
Source: Flickr
The Aid for Trade Task Force reported in mid-2006. In June 2006, ODI brought together the people who shaped the Aid for Trade proposals.
This paper assesses the cost and current donor commitments on Aid for Trade in Africa and considers possible success stories.
The Aid for Trade initiative marked international acceptance of the limitations of trade as a tool for development and of a role for the WTO in aid. Although many in developing countries would gain from a WTO settlement, there are small gains or even costs for some developing countries. This paper looks at the issues relating to the Aid for Trade initiative.
Aid for trade was brought into sharp focus in the current World Trade Organization (WTO) Doha Round trade negotiations, though not part of the single undertaking. Aid for trade is concerned with helping developing countries totrade or adjust to trade liberalisation. Several issues are not yet addressed adequately in the current discussions, such as additionality of aid for tradefunds, the role of private sector, over-reliance on donor co- ordination atcountry level to safeguard effective aid for trade, and the lack of regionalaid for trade (RAFT).
Despite the fact that aid for trade is widely recognized as an essential component of a successful World Trade Organization (WTO) Doha Round (WTO 2005), there is as yet no agreement on the exact rationale and scale of the funds required for this type of assistance to take form.
This paper will first review what types of aid would meet WTO-related needs, and the types needed more broadly to help countries use trade as part of their development strategies. Secondly, it will consider how to decide which needs and which countries or regions should receive Aid for Trade.
This report seeks to identify and assess complementary instruments and as well as assess current request/offer procedures which may include issues such as flexibility, secrecy, limited progress, scope, and Special and Differential Treatment (SDT).