Aid for trade
Aid for Trade: How we got here, where we might go. Background brief No. 10
Background lesson and suggestions on the way forward on Aid for Trade
Authors:
C. Massimiliano; S. Grimm; S. Page; L. Phillips; D. Willem te Velde
Publisher:
International Lawyers and Economists Against Poverty , 2006
This paper is a critical analysis of how the aid for trade initiative emerged from concerns about the development impact of the Uruguay Round Agreements, and particularly on what the international community can effectively achieve through the WTO. This paper aims to draw lessons that might assist the taskforce on aid for trade by examining the successes and failures of aid for trade efforts that have been created in response to this concern.
The paper asserts that analysis of both successful and unsuccessful development efforts has taught the international community that the usefulness of international trade as a vehicle for economic development depends highly on building trade-related capacities. It has therefore come to recognise that in order for trading system to be a vehicle for development for countries in which such vital trade related capacities were in short supply, an effort on Aid for Trade would be a necessary complement to assist in improving market access.
The paper also states that no progress has been made on how to fit Aid for Trade into the basic structure of the WTO. Furthermore, it is unlikely that multilateral rules can be tailored to the specifics of time and place that development demands without duplicating the project-specific approach to legal obligation that constitutes a key part of what makes development institutions different from the WTO.
The paper concludes that a critical factor in the international community’s commitment to development and poverty reduction would be a WTO agreement on aid for trade. This commitment however has many other expressions; the Millennium Development Goals, the existence of the development banks, the various national assistance policies, the recent increase in trade-related assistance, and many others. Such an agreement combined with the political willingness of recipient countries to fully build on the infrastructure and skill capacities can only lead to the road of prosperity. [adapted from author]
