Aid for trade
Aid for trade: making it effective
Improving aid effectiveness
Authors:
M. Garcia; F. Lammersen; M. Hayashikawa
Publisher:
Organisation for Economic Co-operation and Development , 2006
This OECD report deals with the issue of how to effectively operationalise Aid-for-Trade, including how to developing effective mechanisms for appropriately deliver additional financial resources through grants and concessional loans for Aid-for-Trade.
The report in detail the following three questions:
- how much aid do the DAC donors already provide in support of trade?
- how effective are these assistance programmes?
- how to make aid-for-trade an effective tool for helping developing countries, particularly the least-developed countries, to fully benefit from trade liberalisation and the WTO Agreements?
The report is organised as follows: The first chapter gives an overview of the origins of trade-related technical assistance, including how its scope is expanded in the Doha Development Agenda. The internal response to this is also discussed in chapter one.
The second chapter tackles some of the difficulties in defining the scope of the aid-for-trade agenda. The issue of how to address adjustment costs is discussed here. The third chapter looks at trends in donors’ financial contributions in support of the expanding aid-for-trade agenda to provide a common baseline.
Chapter 4 presents scenarios for additional aid-for-trade in the context of scaling up aid to USD 130 billion in 2010 and addresses the management challenges with respect to absorption capacity constraints and the potential for Dutch disease. The fifth chapter looks at challenges in identifying market failures that can be effectively addressed by government interventions. This chapter also highlights the principles for aid effectiveness that can be utilised in augmenting the trade capacity of donor programmes.
Chapter six outlines three primary areas of improvement in the effectiveness of aid-for-trade. These are:
- establishing a national dialogue to formulate and implement trade policy
- mainstreaming trade policy into national economic development and external assistance strategies
- better adapting donor programmes to recipient’s characteristics
Chapter 7 is a proposal for strengthening the aid-for-trade framework. It deals especially with the provision of additional incentives to apply aid effectiveness principles and increase mutual accountability.
