WT/COMTD/AFT/W/45  
 
12 March 2013  
(13-1333)  Page: 1/3  
Committee on Trade and Development 
Aid for Trade  Original: English  
 
 COMMUNICATION FROM THE ORGANIZATION FOR ECONOMIC COOPERATION AND 
DEVELOPMENT (OECD)  
The following communication, dated 12 March 2013, has been received from the Organization for 
Economic Cooperation and Development (OECD), and is being circulated for information. 
 
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OECD POLICY DIALOGUE ON AID FOR TRADE 
16 - 17 JANUARY 2013 
SUMMARY 
1.1.  The dialogue discussed how to ensure the re levance of aid for trade in a changing trade and 
development environment. The main conclusions were to (i) recognize that import capacity is 
essential for export led growth and development; (ii) expand the analysis from ODA to 
development finance and broaden partnerships to include other key players (i.e. the private sector, other IOs, NGOs, and providers of South-south cooperation); and (iii) concentrate on 
enabling/encouraging public-private actions that could yield tangible results. 
1.2.  The Dialogue was organized by the OECD in cooperation with Sweden and the Overseas 
Development Institute and co-financed by the European Commission. Keynote speeches were delivered by Secretary-General Gurria, WTO Di rector-General Lamy, EU Trade Commissioner 
Gucht, and Ministers Groser (New Zealand), Gonz alez (Costa Rica), Costello (Ireland and EU 
presidency), and Oom (Sweden). The dialogue was attended by almost 400 participants (including around 20 ministers and vice ministers) equally divided between OECD Members and non-
Members. Besides government representatives the meeting was attended by representatives from 
think tanks, NGOs, business and parliamentarians.  
         
HIGHLIGHTS 
Setting the Scene  
1.3.  OECD Secretary-General Angel Gurría in his opening speech set the scene for the policy 
dialogue noting the achievements of aid for trade bu t also the need to rethink the role of trade in 
development. Pascal Lamy praised OECD’s substa ntive contribution and hoped that the Policy 
Dialogue would help convince Ministers to agree a strong mandate for aid for trade at the Bali WTO Ministerial in December. European Union Trade Commissioner Karel de Gucht, noted that 
delivering further results needed a long term pa rtnership for development. He pledged that the 
European Union and Member States would stay committed. Tim Groser (Minister of Trade, New 
Zealand) provided a panorama of evolving trade issues relevant to aid for trade and particularly 
noted that Global Value Chains (GVCs) introduced opportunities for developing countries.  
Adapting Aid for Trade  1.4.  A message raised throughout the Dialogue was that imports are important for exports and 
that value chains provided opportunities if hardware and software came together to address WT/COMTD/AFT/W/45 
 
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  binding constraints. Anabel González (Minister of Foreign Trade, Costa Rica) illustrated how Costa 
Rica moved up value chains from a coffee and banana exporter to agro-processing and high-tech industry. Sorasak Pan (Secretary of State, Ministry of Commerce, Cambodia) as well as other representatives from developing countries gave examples of how LDCs are starting to adapt to 
shifting production patterns and connect to value chains. In light of evolving patterns of 
development co-operation, a case was made to broaden aid for trade to include other development finance flows. Private sector engagement and in volving new providers of development assistance 
were suggested as priorities for aid for trade. Stre ngthened regional aid-for-trade efforts were also 
highlighted. 
Showing Results  1.5.  The importance of showing tangible results to justify aid for trade was a recurring theme of 
the dialogue. Different approaches were discussed including case stories/studies, empirical studies 
estimating the impact of aid for trade on trade flows and impact evaluation techniques. It was clear that country-owned results frameworks with targets and indicators to gauge progress are 
most needed to improve country planning and to better manage aid for trade. Ministers from 
Bangladesh, Colombia, Ghana, Rwanda, Solomon Islands, and Vietnam were very grateful for the opportunity to work on country-owned measurement frameworks as part of the OECD’s study on 
Managing Aid for Trade and Development Results. The success of these case study countries is 
linked to their strong country ownership, clear strategies, and machinery in place to use aid effectively to meet trade and development objectives.  
Reducing the Thickness of Borders  
1.6.  Khemmani Pholsena, (Vice Minister of Commerce, Lao PDR) highlighted that even as a small, 
land-locked LDC, Lao PDR had succeeded in reducing trade costs with its main trading partners and reduced times for processing imports and exports. In contrast, Frank Matsaert (CEO 
TradeMark East Africa) gave a vivid illustration of the bottlenecks that still exist in East Africa 
resulting in some of the highest transport costs in the world. Pradeep Mehta (Sectretary General, CUTS International) noted that even a country like India had thick borders (even within the 
country) and vested interests that thwart the obje ctive of reducing the thickness of borders. The 
dialogue concluded that trade facilitation is impr oving but remains an important area of trade and 
development co-operation. A Trade Facilitation Agreement at the Bali Ministerial would be a 
confidence building measure for the multilateral trading system.  
Engaging the Private Sector  
1.7.  While the crucial role of the private sect or in sustainable development was recognized, the 
dialogue highlighted a lack of communication/ understanding between the development community 
and private business. Nevertheless good models of public-private co-operation were presented. Joe 
Costello (Minister of State for Trade and Development, Ireland) highlighted challenges donors face in engaging with the private sector, but he al so provided examples of successful programmes 
linking Irish entrepreneurs to local businesses generating local employment. Charlotte Petri 
Gornitzka (Director General, Swedish International Development Co-operation Agency) concluded that development agencies should be humble an d open-minded about new solutions in engaging 
the private sector. It should be a true partnership where neither side has all the answers.  
The Future of Aid for Trade  
1.8.  The Policy Dialogue succeeded in reinvigorating the aid-for-trade debate. Several Ministers 
gave strong support to the Initiative and praise d the OECD contribution. Others noted that the 
Policy Dialogue had made “an incontrovertible case” for aid for trade. Aid for trade could be 
transformational if sustained, systematic and stra tegic. It must connect with broader development 
finance flows and with new providers of assistance. It should also be based on sustainability; aid 
for trade must work with and not against new market opportunities created by climate mitigation 
and adaptation.  
1.9.  A major issue since the start of the Initiative in 2005 has been whether aid for trade should 
focus on a narrow trade facilitation agenda or connect to a broader set of issues including 
investment, private sector development and infrastructure. The discussion on value chains with its WT/COMTD/AFT/W/45 
 
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  emphasis on skills development, investment climat es and reducing broad trade costs indicates the 
appropriateness of the latter in the next phase of  aid for trade. In short, aid for trade should 
operate in the context of a broad reform process in developing countries and catalyse inter-ministerial dialogue about how to improve competitiveness. Nevertheless challenges were 
highlighted such as the likelihood of declining ai d volumes, increased tying of aid and that outside 
the “aid-for-trade bubble”, a strong case still needs to be made to justify aid for trade against other priorities for development co-operation. So it is clear that despite successes, there is no 
room for complacency and as attention shifts towards the Global Review in July and the Bali 
Ministerial in December, the WTO and the OECD will need to continue to play a strong role in promoting aid for trade. 
1.10.  Further information on the Policy Dialogue can be accessed at: 
http://www.oecd.org/dac /aft/aidfortradepolicydialogue2013.htm   
 
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