Aid for trade
Can aid fix trade?: assessing the WTO’s aid for trade agenda
Should developing countries accept aid for trade?
Authors:
C. Smaller
Publisher:
Institute for Agriculture and Trade Policy , 2006
This report summarises the Aid for Trade debate within the context of the WTO and highlights important questions that remain unanswered by WTO members including:
- is Aid for Trade a consolation prize for a failed Doha Agenda?
- will Aid for Trade be used to pressure developing countries to open markets more than they otherwise would?
- are donors serious about embracing Aid for Trade according to recipients’ needs?
- will there be enough money?
- is the WTO the best forum to operationalise Aid for Trade?
The report indicates that there is a risk that Aid for Trade will distort multilateral trade negotiations and further complicate already delicate relations between developed and developing countries.
The report also argues that the multilateral trading system is in urgent need of reform because the current system is ill equipped to address the fundamental concerns facing developing countries. If Aid for Trade is used to finance the implementation of the existing rules, it will exacerbate existing inequalities. It encourages developing countries to think hard before accepting aid money that serves these ends. Developed countries should think twice before they allocate increasing shares of their aid budgets to such an agenda. If, on the other hand, governments are ready to confront the failures of the existing model of trade and to refocus their objectives on achieving full employment and sustainable development, then Aid for Trade could be an important complement to such a reform process.
