Aid for Trade - how to deliver more and better aid for trade
 The
first Global Review meeting on Aid for Trade took place in Geneva in the General
Council of the WTO which Gareth Thomas attended. We welcome this first ever
Global Review on Aid for Trade. Never before have all 151 WTO members, including
major multilateral institutions, come together to focus on how - collectively –
we can help improve countries capacity to trade. This is a major achievement
that we fully support. The meeting was attended by Robert Zoellick, President
World Bank, Dominique Strauss-Kahn, Managing Director IMF, Kemal Dervis, UNDP as
well as being hosted by Pascal Lamy and OECD Secretary General, and heads of
regional banks.
What was achieved at the Global Review Aid for Trade Meeting?
The Global Review meeting underlined the importance of translating
commitments into implementation plans. The review was a historical first
bringing together for the first time the international trade, development and
financial communities to focus on integrating the most marginalised countries
into the global trading in order to ensure that poor people capture the benefits
of increased trade. As stated by Pascal Lamy following the review:
"I think we've succeeded, which is a very first step, in establishing Aid
for Trade as a priority in the trade community, in the development
community, in the finance community, in the planning community,...connecting
together trade people, finance people, development people, planning
people...establishing the necessary connection and the necessary trust
between these actors, and after all, connection and trust is something that
takes us back to our core business in the WTO."
UK Pledges
The UK supported its international agenda on Aid for Trade with two specific
“Aid for Trade” commitments. The UK has pledged commitment to increase Aid for
Trade to £100 million per annum by 2010. This pledge covers bilateral DFID
spending only, against a narrow definition of Aid for Trade, including trade
policy work, contributions to the Enhanced Integrated Framework and private
sector development. This first commitment was announced by Tony Blair, as Prime
Minister, in November 2005. The second commitment was announced by Gordon Brown
as Chancellor of the Exchequer in September 2006. He pledged to increase our
total support for Aid for Trade including support for trade-related
infrastructure by 50 percent by 2010 to $750 million a year. This pledge covers
bilateral and multilateral DFID spending against a broad definition of Aid for
Trade, to include infrastructure such as roads, ports, power and
telecommunications.
The UK fully expects to meet these commitments.
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Origins of the Aid for Trade Initiative
Since 2005, the UK has been at the forefront in promoting the need to
increase support for trade integration, the aim was to influence the
international community to provide a step change in trade support. The
initiative was supported by evidenced based policy. DFID sponsored international
research. The research programme was chaired by Ernesto Zedillo and brought
together respected international researchers from a broad spectrum of
philosophies and countries.
Rationale for Aid for Trade
 The
research group found that the rationale for aid for trade is both political and
economic.
Political: Securing a multilateral trade agreement is expected to generate
sizeable welfare gains to both developed and developing countries. In this sense
it is a Global Public Good. But implementing trade reforms may well impose
economic and social costs on some countries and require them to take additional
measures to help with the adjustment and reform process.
Economic: Developing countries almost doubled their share in non-oil world
exports, from about 20 percent to 37 percent over three decades. This was
accompanied by strong economic growth. Trade integration is a core element of
sustainable growth. However, in terms of integrating trade into development
strategies, low-income countries have generally lagged middle income countries.
Incentives to integrate trade into PRSPs needs to be seen as part of the
increased attention to growth-oriented strategies under the PRSP process
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Links
Last updated 12 December 2007
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