In this section, you may find new materials that have been published on the topic of ‘Aid for Trade‘, since the date of the event. We continually select major new publications and articles that add up to the policy points discussed in our previous briefing.
Commission Communication updating the 2007 Joint EU Strategy on Aid for Trade
European Commission, 14 November 2017
The purpose of this Communication is to update the existing Aid for Trade strategy in light of developments. It proposes a results-driven and integrated approach to aid and investment for trade, making the most of the wide range of EU policy tools available in order to increase their overall impact on growth and poverty reduction. The focus is on creating more and better jobs and on countries in the greatest need, in particular LDCs.
Aid for Trade – Report 2017: Review of progress by the EU and its Member States
European Commission , 11 July, 2017
Aid for Trade (AfT) is the generic concept describing development assistance provided in support of partner countries’ efforts to develop the capacity to expand their trade, to foster economic growth and to more effectively use trade in poverty reduction. Therefore, AfT has a broad scope, encompassing both aid directly helping beneficiaries formulate and implement trade policies and practice (“Trade Related Assistance”), and aid supporting developing beneficiaries’ wider economic capacity to trade, e.g. invest in infrastructure and productive sectors (“wider AfT”).
The present strategy paper establishes the framework for action for German bilateral and multilateral DC. It is organised as follows. The first chapter describes the WTO AfT initiative and shows how trade can contribute to economic growth, increased employment, poverty reduction and food security – and so to sustainable development. Chapter 2 outlines Germany’s contribution to AfT to date, after which chapter 3 looks at the international developments and challenges which set the framework for future German AfT measures. Chapter 4 then describes the future regional priority areas and defines fields of
action, and chapter 5 presents the approaches and cooperation arrangements for implementing AfT.
The present strategy paper replaces the 2011 strategy paper ‘Aid for Trade in German development policy’. The fields of action of German Aid for Trade from now on are integration and trade policy, quality infrastructure, trade facilitation, productive capacities, promotion of investment and competition, and economic infrastructure.
This edition of Aid for Trade at a Glance focuses on trade connectivity, which is critical for economic growth, inclusiveness and sustainable development. Physical connectivity enables the movement of goods and services to local, regional and global markets. It is closely intertwined with digital connectivity which is vital in today’s trade environment. Yet, the Internet remains inaccessible for 3.9 billion people globally, many of whom live in the least developed countries. This report builds on the analysis of trade costs and extends it into the digital domain, reflecting the changing nature of trade. It seeks to identify ways to support developing countries – and notably the least developed – in realising the gains from trade. It reviews action being taken by a broad range of stakeholders to promote connectivity for sustainable development, including by governments, their development partners and by the private sector. One message that emerges strongly is that participation in e-commerce requires much more than a simple internet connection. Chapters were prepared by the World Bank, the United Nations Conference on Trade and Development (UNCTAD), the International Trade Centre (ITC), the Organisation for Economic Co-operation and Development (OECD), the World Trade Organisation (WTO), The International Telecommunication Union (ITU), and Business for eTrade Development.
Trinidad and Tobago: National Aid for Trade Strategy 2016 to 2019
Trinidad and Tobago. Ministry of Trade and Industry, 2017
Trinidad and Tobago’s Aid for Trade (AfT) Strategy, 2016-2019 presents a coherent framework of trade priorities, based on stakeholders’ views about the challenges they face in expanding trade. The Strategy is expected to assist donors, investors and international development partners in deciding where best to channel their resources to assist Trinidad and Tobago to further develop its trade. In the past, the donor community has provided Trinidad and Tobago with valuable resources to support its trade. Such resources have complemented the country’s own financial resources, the bulk of which was generated from its lucrative energy sector. In 2013/2014, energy revenues in Trinidad and Tobago accounted for 58 per cent of total government revenue. In September 2014, global oil prices fell dramatically but not unexpectedly. This led to a fall in export earnings, a deterioration of fiscal balances and a reduction in the government’s ability to fund key economic and trade programmes. In light of these circumstances, AfT has a valuable role to play in providing Trinidad and Tobago with much needed resources to build its supply capacities and strengthen its trade-related infrastructure. The priorities presented in the AfT framework are organized under three pillars: export diversification, competitiveness and trade facilitation. Each pillar features a series of objectives and sets out priority areas and priority projects where funding is urgently needed. The priority projects represent “project ideas” at this early stage and will have to be fully developed in order to attract funding.
Aid for trade: building productive and trade capacities in LDCs
United Nations CDP, October 2016
The paper looks into the origins of Aid for Trade (AfT) and its objective of assisting developing countries to increase exports of goods and services and integrate into the multilateral trading system. Pointing out that AfT is not a new development fund nor a new aid category, the paper looks into the flows and impact of ODA resources allocated to AfT while focusing on LDCs as well as the effectiveness of AfT. Among the recommendations, the paper argues that most Aid for Trade is allocated to middle income countries and that a shift in this allocation pattern is needed to give more attention to LDCs, particular those that are not well integrated into the global market.
Aid for Trade Report 2016: Review of progress by the EU and its Member States
European Commission, October 2016
Aid for Trade (AfT) is the generic concept describing development assistance provided in support of partner countries’ efforts to develop the capacity to expand their trade, to foster economic growth and to more effectively use trade in poverty reduction. Therefore, AfT has a broad scope, encompassing both aid directly helping beneficiaries formulate and implement trade policies and practice (“Trade
Related Assistance”), and aid supporting developing beneficiaries’ wider economic capacity to trade, e.g. invest in infrastructure and productive sectors (“wider AfT”).
The Aid for Trade (AfT) has emerged from a shift in the development discourse on aid, trade and development. It marked a significant step forward by the international community in accepting that development assistance specific to trade must accompany any trade reform effort for such reform to be meaningful and lasting in terms of its development impact. The AfT is offering a unique opportunity for making trade act as an effective catalyst for development in the context of increased globalization. It is expected to meet the vast needs for trade development in developing countries and countries with economies in transition to benefit from opportunities generated by
Has Aid for Trade helped African economies achieve structural transformation?
Have Aid for Trade programmes helped African economies achieve structural change? This article finds that change has occurred in patterns of exports though it cannot credibly attributed to Aid for Trade, nor are there signs that AfT has helped switch employment from agriculture to industry. The volume of Aid for Trade has increased more than tenfold in the past twenty years with the objective of accelerating economic development in developing countries. Structural change is a necessary part, if not the core mechanism, of development. Hence we ask: ‘Has Aid for Trade (AfT) helped African economies achieve structural transformation?’ Our conclusion is ‘unfortunately, not as far as we can see.’
Assessing the effectiveness of Aid for Trade: Lessons from the ground
Case studies conducted on the ground in eight developing countries suggest that Aid for Trade is effective when the right conditions prevail. However, these conditions are often absent. The Aid for Trade initiative should refocus on building the institutional mechanisms that are critical to the effective delivery of aid. A number of developments have made evaluation more urgent than ever before. First, donors are facing a tight budget situation at home, forcing them to reassess their external aid policy. OECD (Organisation for Economic Co-operation and Development) data shows that, while Aid-for-Trade (AfT) flows at constant 2012 prices have increased over the years, the gap between commitment and disbursement has grown wider after the financial crisis in 2008. Second, the landscape for aid has changed dramatically with the rise of emerging economies, whose AfT activities, while significant, remain largely outside of the OECD Development Assistance Committee (DAC) framework. Finally, the demand for greater transparency and accountability in developing countries has increased with the return of democracy in many countries and aided by rapid and efficient information exchange.
– Addressing sustainable development knowledge gaps in regional Aid for Trade strategies
This article reviews some of the advantages of regional approaches towards reducing trade costs and achieving sustainable development objectives. In view of some of the tensions outlined, it argues that certain knowledge gaps should be addressed in view of inclusive sustainable development objectives. Regional approaches have become the preferred mechanisms of disbursing aid for trade (AfT) for some of the major donors. Regional AfT strategies, created by regional economic integration units and supported by AfT disbursement agencies, invariably include the reduction of trade costs as an objective. After all, investing in trade capacity building and trade facilitation helps in reducing the costs of trading for business. After briefly outlining some of the main advantages of leveraging regional AfT strategies to reduce trade costs, this article draws attention to some important knowledge gaps in view of the achievement of inclusive sustainable development objectives.
– Aid-for-trade should support the Pacific’s ‘hidden strength’: smallholder agriculture
Agriculture is easily the most important economic sector for the Pacific island countries – providing the greatest source of livelihoods, cash-employment and food security for more than eight million people across the region. Typically, food production dominates the sector – with ‘village-level’ farmers growing and distributing a large quantity and varied range of fresh vegetables, root crops, nuts, fruits and flowers. Because many of these farmers focus on growing food for their own families, or to share with others through socially-embedded systems of exchange, traditional food production is often under-represented in national accounts and has been identified as a ‘hidden strength’ of Pacific economies. [Click here to read the paper]
– EAC states fail to strike trade deal with Europe
The just concluded negotiations on the Economic Partnership Agreements (EPAs) between East Africa Community (EAC) member states and the European Union (EU) markets have once again failed to strike a deal.
In the Government Gazette of 21 January 2014 the South African Department of Agriculture, Forestry and Fisheries (DAFF) published the latest information regarding the procedures, administration and allocation of export permits for specific agricultural exports under the Trade, Development and Co-operation Agreement (TDCA) between the European Union and South Africa. The TDCA came into force on 1 January 2000 and establishes a Free Trade Area between the EU and South Africa. In accordance with Article 14 and Annex IV of the TDCA the EU grants tariff preferences on limited quantities of selected agricultural products, exported from South Africa, in the form of tariff-rate quotas (TRQs). The products the TRQs apply to currently include cut flowers (including fresh roses, chrysanthemums, and lilies under HS 0603), fruits and nuts (including strawberries, pears, apricots, peaches and fruit mixtures under HS 0811 and HS 2008), fruit juice (including orange, pineapple and apple juice under HS 2009) and wines under HS 2204. TRQs are a two-tiered tariff system with a limited volume of imports (quota) imported at a lower tariff rate (in-quota tariff), while all additional imports are subject to a higher import tariff (out-quota tariff). This means that import quantities under a TRQ system are not limited, but that the over-quota import quantities are imported at a higher rate of import duty.
The purpose of this study is to help guide the thinking of Australian organizations involved in official development assistance (ODA) on the future of Aid for Trade (A4T) in the area of agricultural development, and especially the advancement of food security and nutrition in Asia-Pacific region’s poorest countries. In particular, the study (1) reviews funding patterns in A4T; (2) summarizes donor approaches to A4T in agriculture, where possible provides insights into individual donors; (3) reviews academic and donor literature on the effectiveness of A4T as a means to increase trade, economic growth, and agricultural development; and (4) takes note of the lessons learned by donors with respect to A4T generally and as they relate to agriculture specifically. [Click here to read the document]
– A fresh look at a Preferential Trade Agreement among the BRICS
To date, little emphasis has been placed upon examining future trading relationships within the BRICS (Brazil, Russia, India, China and South Africa) countries. In general, economic theory suggests that the gains from trade are greater when a wider suite of countries is involved, and this is the fundamental basis of the multilateral liberalisation objectives of the World Trade Organisation (WTO). With the WTO currently stalled in its trade reform objectives, the question is raised as to whether or not trade liberalisation within BRICS may be an objective worth pursuing as this bloc represents a significant portion of the so-called ‘South-South’ trade. This paper explores the trade and economic implications of a Preferential Trade Arrangement (PTA) between the member countries of BRICS. The starting point is that except for the importance of China as an import source intra-BRICS trade is, in general, not very high: this so because the EU is commonly the main import source and export destination.
– Donors, recipients look at effectiveness of ‘aid for trade’
Two EU Commissioners participated to the Fourth Global Review of Aid for Trade in Geneva yesterday (8 July). The event was aimed at providing an opportunity to donors and to developing countries to look how Aid for Trade (AfT) is helping people across the world to trade and what has been achieved so far.
– Global value chains and Aid for Trade: An African perspective
Although global value chains (GVCs) have existed for decades now, interest in the literature has reignited in recent years, particularly since the global financial crisis. Policy makers have sought to better understand the dynamics and governance of GVCs as well as the opportunities and constraints that this type of trade poses for firms in the various stages of participation.
The Economic Commission for Africa (ECA) and the WTO, on 8 July 2013, signed a Memorandum of Understanding to enhance trade-related technical assistance and capacity-building for African countries. Director-General Pascal Lamy said “building capacity to trade is a ‘must’ step for Africa to more effectively participate in the global economy.”