A critical Assessment of the EU’s trade-related assistance to third countries: lessons from the past, policy options for the future

Having outlined the rational for trade-related assistance (TRA) and some lessons leaned from past European Commission (EC) programs, the authors outline the pros and cons of four possible options for EC-provided TRA:

• status quo:: this option fails to secure the foreseen increase in TRA to € 1bn., and makes it difficult to increase current levels of EC support for multilateral initiatives. Projects will also remain of low visibility and transparency prior to implementation. It does nevertheless avoid sudden changes to TRA. Some readjustments of expectations on the increase in TRA is required
• status quo, with budgets coinciding with a multi-annual plan on TRA: this option does not allow the European Parliament (EP) to secure an increase in TRA, and will make it difficult to increase current levels of EC support for multilateral initiatives. It does nevertheless make TRA projects more visible and transparent for the EP and other outsiders. The role of the EC would be to design a planning tool of TRA coinciding with annual budget discussions, and to compile data on TRA disbursements
• status quo plus a new ‘Trade Adjustment’ budget line: an additional budget line will allow disbursement to special issues negotiated with developing countries. The visibility and transparency will be increased, and assistance to multilateral institutions will be enhanced. A new trade adjustment budget line on trade issues more generally would need to be included, that could complicate in-country coherence
• One ‘budget line’ for TRA in the EC budget: by changing the programming of projects and enabling projects to draw funds from various budget lines, this option runs counter to the philosophy of careful cooperation cycles involving aid. Visibility and transparency of TRA projects ex ante would however be increased, and the EP would be able to control how much, and how TRA was spent.