Aid for trade

The third global review of the Aid for Trade programme took place in Geneva on 18 and 19 July. The six year old initiative – Aid for Trade – is a WTO programme to help developing countries build their trade capacity. Sri Lanka is also a beneficiary of this programme.

A joint report prepared by the OECD and the WTO for the meeting found that financial commitments had increased substantially in recent years, creating a need to evaluate and monitor the ground impacts.

The publication – Aid for Trade – at a glance: Showing Results – indicated that the international community has responded effectively to the challenge of helping developing countries overcome the structural and capacity limitations that undermine their ability to maximise the benefits of trade opportunities and that the initiative has resulted in the prioritisation of trade in development strategies, has galvanised support to tackle the bottlenecks that prevent producers from accessing global markets and has bettered the lives of many people in developing countries.

The publication also points towards new pathways for leveraging the Aid for Trade initiative to attain the Millennium Development Goals including through South-South cooperation.

WTO Director General Pascal Lamy in his introductory remarks noted that research shows a positive link between the Aid for Trade initiative and trade performance in the developing countries and emphasised that “global supply chains are extending even more widely as countries in Asia, Latin America and increasingly Africa too falling under their spell”.

It was also noted that improvements have also been seen in developing country participation in negotiations, quicker customs clearance, increased standards compliance and export growth.

The meeting also discussed how the AFT initiative could be viewed in conjunction with issues such as climate change and the food crisis. This is an important development as these are very topical issues which need to be addressed, particularly by developing countries. This view was endorsed by UN Secretary General Ban Ki Moon, when addressing the meeting.

Also supporting this view was the WTO Director General who in his speech said: “We can do a better job of explaining why Aid for Trade can support broader policy objectives like poverty alleviation, social welfare, food security, gender empowerment, climate change adaptation, energy generation and sustainable development.”

A high level session on food security featuring the DG WTO, President of the World Bank Group, ministers and private sector representatives also focused on how improved trade capacity could help with the problem of high and volatile food prices.

One of the major conclusions of the review was that the private sector needs to be better integrated into the initiative. Stressing the importance of the inclusion of the private sector, the DG WTO in his closing remarks noted that although this was the third Global Review, this was the first with genuine private sector participation and that “getting the private sector onboard also means understanding that in reality Aid for Trade is as much the need to generate ‘Investment for Trade’”.

The need for private sector in helping developing countries in trade facilitation measures such as transport infrastructure, logistics and helping producers learn to comply with various new standards were considered important in this process.

Chairman of Nestle, who was a panellist at the high level session, addressing the issue of private sector involvement made a clear demarcation of what their role should be when he stated that the “private sector should never try to substitute for what the government is not doing”.

The results of the review meeting will be seen in future Aid for Trade projects which might see active private sector collaboration, which should bring in more investments to beneficiary countries and greater attention and assistance to handling issues such as food security, climate change adaptation, etc., which if not tackled from now on will be critical problems for developing countries in the future.

(Manel de Silva holds an Honours Degree in Political Science from the University of Ceylon, Peradeniya and has engaged in professional training in Commercial Diplomacy at ITC and GATT. She has served as a trade diplomat in several Sri Lankan Missions overseas and was the first female Head of the Department of Commerce as Director General of Commerce.)