Trade Policy Unit

‘Trade matters and helps lift millions out of poverty’

The new UK Government has set out to bring the development and trade agendas even closer together. Trade is of immense importance to developing countries and to the UK alike.

Development has been at the heart of UK trade policy for the last ten years. Our challenge will be to build on this and to continue calling for trade deals that are beneficial to both the UK and to poorer countries, while working towards our dual objectives of global poverty reduction and UK competitiveness and market access.

The following changes have been introduced:

• A new Cabinet Committee on trade has been created to give strategic direction and political oversight to UK trade policy, chaired by DFID’s Secretary of State Douglas Alexander.
• Gareth Thomas has been appointed as the first ever joint DFID-BERR (Department for Business, Enterprise and Regulatory Reform) Minister for Trade Policy, in charge of trade policy and operational issues, trade negotiations and trade capacity-building.
• A new joint DFID-BERR Trade Policy Unit (TPU) has been set up, bringing together some 70 trade and development experts from the two Departments.
   

TPU Organisation(28 kb)

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What can trade do?

Trade reform has the potential to improve the lives of poor people for the long term. Chapter 5 of the 2004 White Paper emphasises that once the conditions are right, trade may often be the means by which economic growth takes place and will ultimately reduce dependency on aid. Trade, however, will not work in isolation, and any trade reform needs to be spaced, designed and sequenced in a way that is appropriate for the particular circumstances of developing countries. We recognise that developing countries need support to tack the internal constraints – such as poor transport or telecommunications, conflict or corruption – that prevent them form being able to take advantage of more open markets. That is why the UK Government expects to increase spending on ‘Aid for Trade’ by 50% to 4750m a year by 2010.

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DFID's objectives on Trade

There are four channels through which DFID seeks to achieve its objectives on trade:

1. The World Trade Organisation (WTO) Doha Development Round
The Doha Round commenced in 2001. We are working closely with other Whitehall departments to ensure that the Round delivers on its original development objectives, creating an international system in which poor countries can fully participate so that trade contributes to the reduction of poverty. A successful Doha Round has the potential to deliver huge welfare gains to developing countries. Agriculture, industrial goods and services are the main strands of the negotiations. Across all of these, we want to see increased market access for developing countries’ products though significant cuts in tariffs and subsidies.

• More on the Doha Development Round

2. Economic Partnership Agreements (EPAs)
EPAs are new trade agreements recently signed up to by the European Union and 35 African, Pacific and Caribbean (ACP) countries. They took effect from the 1st January this year. We have worked consistently to ensure that these agreements have been negotiated to fully reflect ACP countries’ needs and concerns and provide development opportunities. These 35 countries now receive duty-free, quota-free access into the EU on all products, and improved Rules of Origin on textiles, clothing and fisheries.

• Latest on Economic Partnership Agreements
• A Rough Guide to EPAs

3. Aid for Trade
Aid for Trade is defined as “Technical assistance, capacity building, institutional reform, investments in trade related infrastructure; and assistance to offset adjustment costs, such as fiscal support to help countries make the transition from tariffs to other sources of revenue".

Aid for Trade is aimed at helping people in developing countries to become more competitive traders, better able to capture opportunities created by more open regional and global markets. It is about increasing broad based capacity building for trade policy, private enterprise/market development and economic infrastructure (power, transport, communications). Gordon Brown announced last September that DFID would increase its spending on Aid for Trade by 50% to $750m per year by 2010.

• Aid for Trade UK position (available soon)
• How to deliver more and better aid for trade
• Aid for Trade: Increasing Support for Trade Adjustment and Integration - a Proposal(538 kb)
• Aid for Trade: Questions and Answers

4. Research on Trade and Development
DFID commissions and finances considerable research on trade and development issues, focusing on areas and concerns identified by developing country partners. We also support a number of civil society organisations carrying out further research on behalf of developing countries.

• Trade policy unit related research matrices(784 kb)
• Trade Research

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Key publications

• Trade Matters
• DFID's work on international trade and development 2005-2007(303 kb)

Main policy commitments and Government White Papers

• Making Globalisation a force for good" (White Paper on Trade and Development)
• "Eliminating World Poverty: Making Globalisation Work for the Poor"(129 kb) - White Paper on International Development - Chapter 5
• Eliminating world poverty: Making Governance work for the Poor (White Paper on International Development July 2006)

Speeches

• Fair Trade speech to the Fairtrade Foundation campaign conference (Leeds 14 Oct 2006)
• How can we get Trade Justice? (Hilary Benn - 29 July 2005 - LSE)
• Making Globalisation Work for Bangladesh (Hilary Benn -11 December 2005)
• Can Trade be Fair and Free? (Hilary Benn 10 January 2005)
• Living up to our promises: Helping developing countries to capture the gains from trade (Hilary Benn stresses the importance of making multilateral process work for developing countries - 21 July 2004)
• Speech to the Churches Development network(140 kb) (Hilary Benn 9 June 2004)
• Speech to the Trade Justice Movement (Hilary Benn May 2004)

Last updated: 15 January 2008

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