WT/COMTD/AFT/W/52  
 
7 August 2014  
(14-4627)  Page: 1/5  
Committee on Trade and Development 
Aid for Trade    
 
FIFTH GLOBAL REVIEW 
AID-FOR-TRADE MONITORING EXERCISE 
 
"REDUCING TRADE COSTS FOR INCLUSIVE, SUSTAINABLE GROWTH" 
BACKGROUND NOTE BY THE WTO AND OECD SECRETARIATS1 
 
1  INTRODUCTION 
1.1.  The aim of this background note is to ou tline the monitoring and evaluation (M&E) exercise 
that will underpin the 5th Global Review of Aid for Trade. The theme of the 2014-2015 
Aid-for-Trade Work Programme and the 5th Global Review of Aid for Trade is: "Reducing Trade 
Costs for Inclusive, Sustainable Growth". The next M&E exercise will explore this theme in detail.  The purpose of this working document is to expl ain how this exercise will be organized and to 
invite comments and suggestions.  
2  OVERVIEW 2.1.  The 2014-2015 Aid-for-Trade Work Programme (WT/COMTD/AFT/W/51) is built around, and 
will lead to, the 5
th Global Review of Aid for Trade. Past Global Reviews have been informed by a 
joint OECD-WTO monitoring and evaluation (M&E ) exercise that had surveyed Aid-for-Trade 
implementation by partner countries, bilateral and multilateral donors, South-South partners and regional economic communities. Efforts have also been made to reach out to the private sector 
and to engage other partners in the M&E exerci se. The results of the M&E exercise have been 
reported at Global Reviews in a joint OECD-WTO publication "Aid for Trade at a Glance". The 5
th 
Global Review of Aid for Trade, to be held in mid-2015, will follow the same approach, using the 
M&E exercise to inform discussion at the Global Review meeting, and as the basis for a further 
edition of the "Aid for Trade at a Glance" publication. 
2.2.  The M&E exercise for the 4th Global Review identified trade costs as a key factor influencing 
the ability of developing country firms to connect to value chains, both regionally and globally, and 
to deliver inclusive economic growth. The accomp anying M&E exercise included a private sector 
questionnaire to which some 700 firms responded. Key issues identified as negatively affecting the ability of developing country suppliers to connect to value chains included: access to trade finance, 
transportation costs and infrastructure capacity, customs procedures, and standards.  These same 
issues, which are an especially important cost component for lower value goods, also ranked highly in the survey of partner countries and do nors – albeit with somewhat differing emphasis.
2 
The issues cited in the last M&E exercise are ke y determinants of trade costs. As such, the M&E 
exercise for the 5th Global Review will aim at continuity of analysis by examining in more detail 
how Aid for Trade can help reduce trade costs and the associated impacts to deliver inclusive sustainable growth.  
2.3.  The purpose of the M&E exercise for the 5
th Global Review is to review implementation of the 
Recommendations of the Aid-for-Trade Task Force, notably as regards steps taken to strengthen the "demand side" by mainstreaming trade in national and regional development planning 
                                               
1 This document has been prepared under the responsibility of the WTO Secretariat and is without 
prejudice to the positions of Members and to their rights and obligations under the WTO. 
2 For a more detailed overview of the results of th e private sector monitoring  exercise, see "Aid for 
Trade at a Glance 2013: Connecting to Value Chains". WT/COMTD/AFT/W/52 
 
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  frameworks, and the  response from donors, providers of South-South cooperation and the private 
sector, by examining Aid-for-Trade flows and alig nment with national and regional priorities 
together with effectiveness and efficiency.3 A key component of the M&E framework will also be 
sharing good practice and examining results on the ground, with a view to creating positive 
incentives for more and better Aid for Trade.  
2.4.  The Ministerial Decision on Aid for Trade (WT/L/909) and the Bali Package added a 
significant, novel dimension to ongoing work on Aid for Trade. The 2013 M&E exercise highlighted 
the priority being given to trade facilitation among partner countries.  
2.5.  A growing body of research is available on trade costs and the economic impact of efforts to 
reduce these costs. The World Bank, for example,  publishes data on trading across borders (as 
part of the Doing Business Index), the Logistics Performance Index, and research on trade costs. A 
variety of other international organizations have also conducted extensive research in this area, 
including, inter alia , the OECD, regional development banks, UNCTAD, UN regional economic 
commissions, and the World Customs Organization. Other international non-governmental 
organizations, such as the World Economic Forum,  are also actively engaged in looking at this 
topic. The aim of the M&E exercise is to harvest key lessons from this growing body of work on 
(i) the role that Aid for Trade can play in reducing trade costs and (ii) the impact that reducing 
trade costs is having on supply-side capacity, em ployment, income growth and poverty reduction. 
2.6.  Research on trade costs shows a trend towa rds declining trade costs in developing countries, 
but also that the rate of change is slower than  among developed countries, and has started from a 
much higher baseline.4 This message is borne out by Figure 1 below.   
Figure 1 - Time to export in days by different income groups 2005-2014 and projected 
trends for the period 2014-2020 
LDCs
LMICs
UMICsSVEsLLDCs
0102030405060
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 
Source:  World Bank Doing Business Index. WTO Secretariat calculations. Income groups: LLDCS: landlocked 
developing countries; LDCs: least-developed countries; LMICs: low middle income countries; SVEs: small, vulnerable economies; UMICs: Upper middle-income countries 
 
 
2.7.  Figure 1 analyses the World Bank Doing Business Indicator "time to export" (in number of 
days) over the period 2005-2014. On the basis of the trend line for the period 2005-2014, Figure 1 also projects time to export for each income group until 2020. From the time series, it is clear that 
progress is being made to reduce trade times. However, this progress needs to be sustained. In 
                                               
3 See document WT/AFT/1,  27 July 2006. 
4 Arvis, Jean-François; Duval, Yann; Shepherd, Ben; Utoktham, Chorthip. 2013. Trade costs in the 
developing world: 1995 - 2010 . Policy Research working paper; no. WPS 6309. Washington, DC: World Bank WT/COMTD/AFT/W/52 
 
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  2005, exports from landlocked developing countries (LLDCs) and least-developed countries (LDCs) 
on average took more than double the number of days than upper middle-income countries 
(UMICs) to export. While the rate of decline has been faster for LLDCs and LDCs, the gap in terms 
of time remains wide, even when projected forward to 2020.  
2.8.  Nearly 50 of the 275 case stories submitted for the 2011 M&E exercise concerned trade 
facilitation projects. Many of the case stories highlighted progress in reducing trading times and associated costs.
5 Initial progress reported in these case stories has been consolidated. For 
instance, Table 1 shows the changes in transit times and costs on the Northern Corridor in East 
Africa.6 
Table 1- Progress in reducing trade costs and time on the Northern Corridor 
Impact of the Northern Corridor Transport Corridor on 
trade times in East Africa Past Scenario Current Status  
Border delays 3 days 3 hours 
Mombasa-Kampala cost per container US$3,300 US$1,700 
Mombasa-Kampala transit time 18 days 4 days 
Mombasa Port aver age waiting time 19 days 13 days 
Average truck's number of tr ips per month between Mombasa 
and Kampala 1.5 3 
Mombasa-Kigali cost per container US$4,900 US$3,300 
Mombasa-Kigali transit time 22 days 6 days 
Source: 5th Northern Corridor Ministerial Report, 1 May 20147 
 
 
2.9.  The scope of the literature on trade cost s is broad and growing. To ensure that the M&E 
exercise remains a manageable and clearly defined one, it is suggested that the following four 
areas be its focus: (i) access to finance; (ii) co sts of compliance with non-tariff measures (e.g. 
standards and technical regulations); (iii) trade facilitation; and (iv) trade-related infrastructure. In 
addition, the M&E exercise will aim to clarify how these barriers affect the opportunities of local 
business to contribute to the overall objective of achieving inclusive sustainable growth. 
2.10.  In general, the literature on trade costs is more developed in the area of merchandise goods 
where these topics have been studied extensively, and for which data sets are available for at least 
some of these four variables. In contrast, the issue of trade costs as they affect trade in services is 
less developed, especially concerning developing countries.8 Indeed, this is an area where the 
Secretariat will seek to undertake further work and seek input in developing the M&E framework. 
Preliminary research suggests that issues that may be  worthy of more in-depth study in relation to 
trade costs and the services include: professional qualifications; standards; network services; and ICT infrastructure.  
2.11.  Reducing trade costs is one aspect of the theme for the 5
th Global Review. The other aspect 
is that of effect of trade costs on "inclusive, su stainable growth". The M&E exercise is also being 
placed in the context of ongoing discussion s on the post-2015 Development Agenda.  
                                               
5 OECD/WTO (2013) Aid for Trade at a Glance 
6 The World Bank and the Northern Corridor Transi t Authority submitted case stories about this 
programme in 2011. See, respectively, http://www.oecd.org/aidfortrade/47811454.pdf  and 
http://www.oecd.org/aidfortrade/48293562.pdf  
7 As reported in the "The East African". Source: http://www.theeastafrican.co.ke/news/New-clearing-
system-saves-Uganda-and-Rwanda-- 469m/-/2558/2310260 /-/43lmr8z/-/index.html  
8 See for instance the OECD Services Trade Restrictiveness Index Regulatory Database 
http://qdd.oecd.org/subject.aspx?Subject=063bee63-475f-427c-8b50-c19bffa7392d   WT/COMTD/AFT/W/52 
 
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  3  APPROACH 
3.1.  This M&E exercise, like in the past, will also be based on a self-assessment questionnaire. 
The questionnaires will be complemented by a case story exercise in which respondents will be invited to provide, in more detail on their expe riences of Aid for Trade reducing trade costs and 
associated impacts. An effort will also be made to assess what the Aid-for-Trade Initiative has 
achieved since 2006 in making trade an engine  of economic growth and poverty reduction. 
3.1  Key questions to be surveyed 
3.2.  It is suggested that the following questions could, inter alia , be the focus of the 
self-assessment questionnaires:  
 What priority do developing countries' national and regional development strategies give to 
reducing trade costs? How are trade costs tracked in national and regional planning 
frameworks? What have been respondents' experiences with programmes to reduce trade 
costs? What impacts can respondents report from Aid-for-Trade programmes directed to reducing trade costs?   
 How do donors' Aid-for-Trade strategies address the issue of reducing trade costs? How are 
donors working to align their assistance with national and regional needs in this area, including with the private sector? What are donors' experiences of Aid-for-Trade assistance 
to address the issue of reducing trade costs?  What impacts can be reported from these 
programmes also in terms of inclusive, sustainable growth? Has the delivery and alignment of Aid for Trade around country stra tegies and priorities improved?  
 How are South-South partners working with other developing country suppliers to tackle the 
issue of trade costs? What can South-South partners see in terms of impact from their 
programmes?  
 What can be learnt from regional approaches to addressing the issue of reducing trade 
costs? What are the main difficulties and opportunities associated with regional approaches 
to addressing trade costs? What impacts can be reported form these programmes also in terms of inclusive, sustainable growth? 
 What is the private sector doing to address the issue of reducing trade costs? What does the 
private sector in developing countries view as the main economic benefits from addressing the issue of trade costs? What has been the ex perience of the private sector in developing 
countries with programmes to reduce trade costs?  
3.2  Who will be surveyed? 
3.3.  Questionnaires and the call for case stories will be disseminated using electronic survey tools 
and completed on-line. The self-assessment questi onnaires and the call for case stories will be 
distributed to the following recipients:   
 Donors (Bilateral and Multilateral) 
 Partner countries 
 South-South partners 
 Regional economic communities. 
3.4.  Efforts will also be made to reach out to the private sector, notably by engaging other 
organizations in the M&E exercise. In 2013, Grow Africa, the International Chamber of Commerce, 
the International Trade Centre, the International Telecommunications Union and the World 
Tourism Organization collaborated in the M&E exercise. Outreach will similarly be undertaken with other organizations to utilize their expertise and networks with respect to outreach to the private 
sector.  WT/COMTD/AFT/W/52 
 
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  4  HOW WILL THE INFORMATION COLLECTED BE ANALYSED? 
4.1.  Information collected will be analysed and published in the edition of the joint OECD-WTO 
publication "Aid for Trade at a Glance 2015". The analysis will also inform the 5th Global Review 
agenda, for example through the organization of specific sessions. Conclusions arising from the 
analysis may be used by trade and development rese archers, and as input for future policy and aid 
programming. 
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