Participants at the latest Global Review of Aid for Trade. The initiative’s next review is in 2017.
Photo: WTO/Studio Casagrande

01.12.2016

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The Aid for Trade initiative was originally launched to mobilise resources for addressing traderelated constraints in developing countries and to thus contribute to sustainable development. Scientists are at odds over the extent to which this has met with success. Our author nevertheless believes that the initiative should be continued – especially with a view to tapping the potential of regional trade.

Aid for Trade (AfT) was conceived as a joint effort by the World Trade Organization (WTO) and donors to engage developing countries during the Doha Development Round (the current trade-negotiation round of the WTO which commenced in November 2001), in an attempt to increase their confidence in the availability of trade-related adjustment support stemming from further trade liberalisation. Since its inception, the AfT initiative has recorded a significant increase in financial commitments and disbursements totalling approximately 393 billion US dollars in commitments since 2006. It constitutes about a third of all Official Development Assistance (ODA) annually. However, the trend in commitments is levelling off (see Figure).

Eroding confidence in AfT?

The question is whether both developed and developing countries still have confidence in the Aid for Trade initiative. This may no longer be the case. Just as AfT was a response to the crisis in multilateral trade negotiations and donor expediencies ten years ago (see Box below), there is a need for its reassessment on the basis of shifts in the global trading environment, pressures on donor governments and needs of developing countries.

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