WORLD TRADE  
ORGANIZATION  WT/AFT/W/22 
29 June 2006 
 (06-3139) 
Aid for Trade Task Force Original:   English 
  
 
COMMUNICATION FROM  ZAMBIA ON BEHALF OF THE LDC GROUP 
  
 The following communication, dated 26 June 2006,  is being circulated at the request of the 
Delegation of Zambia on behalf of the LDC Group. 
 
_______________ 
 
 
AID FOR TRADE – AN LDC PERSPECTIVE 
 
 
I. INTRODUCTION 
1. Over the past year, a broad consensus has emerge d in the international community that both a 
successful conclusion of the Doha Development Age nda (DDA) and an effective contribution of trade 
to poverty reduction will require a s ubstantial scaling up of "aid for trad e" to developing countries, in 
particular to LDCs.  At the G8 Gleneagles meeting,  an additional $4 billion for trade-related activities 
in developing countries were announced, up from th e current $2.7 billion.  This was followed by 
important pledges at the WTO Ministerial Conference in Hong Kong, December 2005.  At that Conference, Japan announced $10 billion for trad e-related assistance over three years, the US 
announced Aid-for-Trade grants of $2.7 billion a y ear by 2010 and the EU and its member States 
announced trade-related spending of $2 billi on per year (up by $600 million) by 2010. 
2. In Hong Kong, Ministers agreed that Aid for Trade (AfT) "should aim to help developing 
countries, particularly LDCs, to build the supply-si de capacity and trade-related infrastructure that 
they need to assist them to implement and be nefit from WTO Agreements and more broadly to 
expand their trade".
1  They also reaffirmed their support to the Integrated Framework (IF) and 
welcome an Enhanced IF.2 
3. As a follow-up to the Hong Kong Ministerial C onference, an AfT Task  Force was established 
in the WTO.  
                                                      
1 Paragraph 57 of the WTO Hong Kong Ministerial Declaration. 
2 Paragraph 50 of the WTO Hong Kong Ministerial Decl aration outlines some features of an enhanced 
IF:  1. "provide increased, predictable,  and additional funding on a multi-year  basis";  2. "strengthen the IF in-
country, including through mainstreaming trade into national development plans and poverty reduction strategies;  more effective follow-up to diagnostic trade integration studies and implementation of action 
matrices;  and achieving greater and more effective coordination amongst donors and IF stakeholders, including 
beneficiaries";  3. "improve the IF decision making and management structure to ensure an effective and timely delivery of the increased financ ial resources and programmes". 
 WT/AFT/W/22 
Page 2  
 
  A. T
HE CASE FOR INCREASED AFT FOR LDC S 
4. The LDCs constitute a group of 50 countries, totalling a population of more than 700 million.  
Over the last 40 years, LDCs have been increasi ngly marginalized from world trade.  As of 2004, 
LDCs' share in world trade stood at a meagre 0.7 per cent of total world exports as compared to 
3.06 per cent in 1954.  Despite several recent in itiatives for improving market access, such as the 
"Everything But Arms" (EBA) and the African Gr owth and Opportunity Act (AGOA), few positive 
results have been achieved so far. 
5. With the exception of a few, LDCs have in common several of the following features:  
poverty and extreme poverty are prevalent; exports  are dominated by one single agricultural 
commodity and deteriorating terms of trade;  a pr ivate sector characterized by small- and medium-
sized enterprises (SMEs) which are under capitali zed and with little exposure to international 
business;  profound weaknesses of the financial and cr edit sector; absence of foreign direct investment 
(FDI) (except for oil producing LDCs);  public infr astructures in need of major repairs;  recurrent 
governance problems and a poorly organized civil society. 
6. During the last five years, the AfT delivered  to LDCs has hovered around 24 per cent of the 
total aid delivered.3  This is considerable.  A finer analys is however pinpoints large differences of aid 
per country:  (i) indeed, there is a concentration of  aid on a few countries;  (ii) despite the importance 
of AfT aid flows as recorded by OECD, specific tr ade-related infrastructures often have not received 
the share that one would expect;  (iii) some s ub-sectors crucial for export are under-funded and there 
are bottlenecks to exports which ha ve long been neglected;  (iv) l astly there is across the board a 
relatively low level of TA directed towards the private sector and business entrepreneurs. 
7. Several multilateral mechanisms exist for de livering AfT to LDCs.  One of the most 
important is the Integrated Framework which is cu rrently implemented in 40 LDCs.  By its mandate 
the IF finances only trade-related technical assist ance (TRTA) and trade-related capacity building 
(TRCB).  Project proposals to tackle supply-side constraints and infrastructure should be financed by Consultative Groups (CGs) and Round Tables (RTs).   On several occasions, such projects were 
presented to specific donors' meetings and to CGs and RTs, but without success.  Reliance on "best 
endeavour" commitments and Consu ltative Groups and Round Tables have  shown their limitations for 
mobilizing new resources for trade responding to specific priorities articulated by the LDCs. 
B. D
EFINITION AND SCOPE OF AID FOR TRADE  
1. Aid for Trade (AfT) and Aid for Development 
8. AfT is a sub-set of aid for development.  It should be a core part of any growth strategy 
whose ultimate goal is to reduce poverty.  It has the potential to enable developing countries to 
enhance their competitiveness, diversify their ag ricultural, industrial and services capabilities, 
improve their infrastructure, and strengthen their supp ly-side capacity to take advantage of the market 
access opportunities offered by trade liberalization.   It can also bolster national capacities to 
participate effectively in bilateral, re gional and multilateral trade agreements.  
9. AfT is required for developing countries, particul arly LDCs that are expected to benefit from 
the Doha Round but only if additional investments are made to improve their infrastructure, productivity and competitiveness.  However, as Pascal  Lamy pointed out when he addressed the first 
                                                     
 
3 Under AfT infrastructure, OECD does not distinguish between what could be narrowly defined as a 
trade-related infrastructure from more general multi-pur pose infrastructures.  Under that practice, figures for 
AfT infrastructure seem to be exaggerated.  WT/AFT/W/22 
 Page 3 
 
 
  meeting of the AfT Task Force, aid for trade is not  a substitute to the development dimension that the 
DDA must deliver; it should, however, been per ceived as complementary to this objective. 
10. AfT comprises the on-going trade-related assist ance and the additional resources pledged in 
Hong Kong and by the G8 nations to bolster export cap acities of developing countries, in particular of 
LDCs.  As much as possible the scaling up of aid for trade should be financed through new money 
rather than a reshuffle of resources from other sector al priorities towards trade, or resources already 
earmarked for trade and re-pack aged under the AfT label.  
11. The rationale for avoiding the reallocation to trade of resources from other sectors, such as 
education, health, poverty reduction or governan ce, is that it would endanger the economy's 
competitiveness in the medium term.  In fact, co mpetitiveness in a globalized economy is achieved 
through the interaction of numerous non-trade factor s, such as the quality of the education system, a 
healthy working force, an efficient transport system, an impartial judicial system and other more subjective factors such as political stability, the investment climate, and the thrust between 
government and the business community.  In LDCs, where often the social objectives as defined by 
the Millennium Development Goals (MDGs) for 2015 are not yet reached, it would be a tragic 
mistake to reduce basic social expenditures to reallo cate aid towards trade.  Indeed, aid for trade and 
social expenditures are separate tracks that s hould receive adequate level of financing from the 
development community for fostering a sustainable, vigorous and quality growth. 
2. The AfT Pillars  
12. Four pillars of aid for trade are distinguished hereafter:  supply-side capacity, trade-related 
infrastructure, trade policy and negotiations, and cost adjustment.  The first three are familiar to the 
trade and development communities.  The last one, co st adjustment, is relatively new; it responds to 
the developing countries' concerns that implem entation of WTO agreements may require high up-
front costs and benefits which will only materiali ze at a later date.  Financial assistance should be 
provided to ease countries with adjustments in their economy during this transition period.  
13. For LDCs, the priorities which AfT should addr ess include strengthening their supply-side 
capacity, which is often closely linked with improve ments in their infrastructure, and assistance with 
cost adjustments.  Needs for formulation of trade policy, mainstreaming trade into national 
development strategies and strengthening capacities for participating at multilateral rules making are 
already met by existing mechanis ms, such as the IF and Joint In tegrated Technical Assistance 
Programme (JITAP). 
14. Supply-side capacities .  In LDCs, private-sector development is key to any policy which 
seeks to strengthen supply capacities.  This may include support to the chamber of commerce and 
professional associations, the establishment of a one-stop window for creating a business, streamlining procedures and reducing business re gulations, fostering a supportive environment 
through revamping legal codes for commerce and i nvestment, strengthening the registration of goods 
and persons, and supporting th e creation of arbitrage centres.  Trade facilitation measures are also part 
of any integrated package for strengthening the supply-side capacity.  They comprise, inter alia,  
customs modernization, simplification of trade pr ocedures and information oriented to the business 
community.   
15. Strengthening financial and insurance ser vices and making them more inclusive
4, providing 
targeted support for investment, supporting expo rt marketing facilitation and up-grading local 
                                                      
4 This includes micro credit and making available small loans to poor farmers and women who do not 
have collateral, enabling these groups to participate to the modern  economy. WT/AFT/W/22 
Page 4  
 
  institutions in the areas of applied agronomic research  and technology are also in dire need in LDCs 
and contribute to creating a favourable e nvironment for enhancing supply capacities. 
16. Strengthening LDCs' export capacity will also re quire a change in the mix of TRCB provided, 
as more projects should be targeted to firms and networks of firms at the branch level.  Flexible and 
innovative forms of TA, responding to their needs, and a problem-solving approach, are needed to 
improve local business' capabilities for bene fiting from enhanced market access.  
17. Trade related infrastructure  comprises construction and rehabilitation  of roads and feeder 
roads linked to production areas, communications , port and storage facilities, production and 
distribution of energy, and water supply.  For LDCs, a special plea is needed for investments in energy, in particular hydro-electricity schemes  and electricity distribution in rural areas.  
18. In LDCs, the cost of energy and transport can be several times higher than in a more 
advanced developing country.  These high costs are not only related to the absence of, or poor quality 
of, infrastructure.  They are also often borne from inefficiencies, rent-seeking behaviours and quasi monopolies that have to be corrected.  Attenti on has to be given to strengthening management, 
revamping the legal and regulatory framework, priva tizing or constituting public -private partnerships 
(PPP) and establishing cost recovery schemes to ensure the financing of maintenance and 
rehabilitation work. Remedial action shoul d fall within the scope of the AfT. 
19. Development of regional infrastructures, e.g., regional trade corridor, cross border transit, 
management and integrated development of a river running through two or more countries (e.g., 
irrigation and use of water, security and tran sport policy, hydro-electricity schemes common to 
several states) should also fall within the AfT purview . In the past, such investments have often been 
overlooked, partly because aid delivery mechanisms  are mostly country-based, and partly because of 
the complexity of projects that are shared by sever al countries and stakeholders with different views 
and priorities. Several LDCs ar e landlocked countries and they give a high priority to these 
undertakings. 
20. Trade policy and negotiation .  This comprises trade-related technical assistance and trade-
related capacity building activities to strengthen na tional capacities for formulation of trade policy, 
mainstreaming trade into the Poverty Reduction St rategy Paper (PRSP) or national development 
plans, fostering participation in rules making and supporting negotiators in their work in WTO or in 
regional economic associations.  
21. The formulation of a thorough national trade policy should be highly participatory, involving 
the private sector and civil society.  This often requires an overall up-gradi ng of the knowledge of 
trade policy issues and an understanding of the effects of trade throughout the economy, on firms, 
workers and consumers.  Cooperation of many speci alists – economists, but also political analysts, 
strategists and negotiators – as well as private sectors representatives, are needed for devising a 
strategic approach.  
22. In parallel, trade mainstreaming into the PRSP and the national development plan should take 
place.  This priority need was recognized by the IF.  Some progress has been made towards that 
objective but at a recent IF Working Group meeting,  the unsatisfactory level of trade mainstreaming 
was once again noted and additional efforts were recommended.
5  
                                                      
5 In a recent review by the World Bank of the trade content in PRSPs, only 8 out 20 countries reviewed 
had completed a DTIS validation workshop at the time of the publication of the PRSP.  Of these 8 countries, 
only 3 had successfully incorporated the recommendations of the DTIS in the PRS documents.  WT/AFT/W/22 
 Page 5 
 
 
  23. For LDCs, trade policy formulation, trade main streaming and support to negotiators remains 
high on the priority list for assistance.  It is how ever, expected that on-going assistance and future 
scale-up activities in these areas through the Enhanced IF  and better coordinati on with other on-going 
programmes and/or streamlining activities should be sufficient.  Occasionally, some additional 
funding from AfT Facility may be needed, complementary to the existing resources. 
24. Adjustment cost.   Developing countries are faced with costs arising from the implementation 
of trade reform, including those related to implemen tation of WTO agreements and future changes in 
the multilateral trade regime as a result of the Doha  Round.  Adjustment costs are not mentioned in 
the Hong Kong Ministerial Declaration but the pol itical economy of the on-going negotiations in 
Geneva is such that they are now considered as a legitimate request from developing countries and 
should be part of the AfT.  
25. Several unfavourable outcomes for LDCs can be  imagined if the Doha Round succeeds.  For 
example,  (i) some LDCs will suffer from the erosion of  preferences that they pr eviously enjoyed;  (ii) 
for those LDCs that are net food importers, difficulties could arise from food prices increases 
following reforms of agricultural subsidies in the developed countries.  
26. Compensation is also requested by LDCs for me asures and actions taken to comply with the 
rules and standards of the international trading system.  Adjustments put stress on already weak institutions and sometimes require the setting up of  new ones.  A few areas which have been very 
costly to implement are establishing services for enforcing intellectual property rights, customs 
valuation and the Container Security Initiative, rules of origin which are overly complex, compliance with sanitary and phyto-sanitary standards and est ablishing laboratories and certification agencies. 
27. A case can also be made for the loss of reve nues to the Government as a result of trade 
liberalization.  For LDCs, tariff and customs revenue s form a substantial part of the budget. Shifting 
to a system such as VAT because of trade liberaliza tion is often a complex task, with associated high 
costs. 
28. Macro-economic losses are often accompanied by severe imbalances at the level of local 
communities, farmers and workers.  Retraining wo rkers and facilitating the adjustment by various 
measures targeted at individuals and firms are needed to smooth out the transition.  
C. A
ID FOR TRADE :  WHICH ARCHITECTURE IS MOST APPROPRIATE ? 
29. Aid for Trade has been on-going for a long time.  Today more than forty donors, bilateral and 
multilateral, are providing support in the area of tr ade to developing countries.  What is new, 
however, are the linkages between aid for trade a nd the multilateral trade regime, the emphasis on 
development issues by the DDA, and recognition by  the donor community that trade should be 
actively used as an instrument of developmen t policy to accelerate growth and reduce poverty. 
30. Recent evaluations of the aid for trade sector have pointed out some weaknesses:  (i) some aid 
programmes could be streamlined and built on;  (ii) increased coordination between multilateral 
programmes and between bilateral and multilateral programmes could produce superior outcomes at a 
lower cost;  (iii) international support should bette r respond to the priorities identified by the LDCs 
rather than projecting donors' views;  and (iv) aid predictability and long-term commitment should be 
solidified.  A more equitable repartition of aid be tween developing countries and LDCs, is required. 
No conditionality should be attached to AfT assistance. 
31. In designing the AfT architecture, the structur al changes brought to the aid business by the 
Paris Declaration should be embedded in th e AfT procedures and operational modalities.  
Increasingly, development aid is deployed in a budget support environment, based on harmonization WT/AFT/W/22 
Page 6  
 
  of donors' practices (e.g., one single needs assessme nt and assistance strategy, joint reporting) and 
alignment on national procedures a nd systems.  The implication for the AfT architecture is that the 
system should be country-demand driven and based  on strong national structures and procedures for 
planning, programming, delivering and monitoring AfT resources.  
32. In view of the above, the LDC's position is in  favour of a multi-facetted AfT architecture 
comprising: 
(i) A Multilateral Trade Facili ty, for financing projects responding to gaps identified in
  the existing aid for trade.  Such a Multila teral Trade Facility could have up to three  
  specialized windows: 
  
• investments in regional and cross-border projects;  
• financing adjustment costs;  
• investments of trade-related infrastructures and supply-side strengthening as 
 identified in the Diagnostic Trade Integration Studies (DTIS). 
 
(ii) A mechanism for monitoring AfT pledg es, distinguishing between AfT trends and 
new and additional aid resources and effec tive disbursement and utilization of the 
AfT funds by recipient countries; 
 
 (iii) an overarching mechanism for stream lining, coordinating and leveraging existing 
funds, facilities and trade initiatives.  It woul d work in close cooperation with the AfT 
structures established in the developing countries. 
 
33. The above-mentioned Multilateral Trade Fac ility should not set up a parallel process but 
operate via the PRSP and when possible through the CG/RT process
6 or any other donor conference in 
order to ensure coherence of policy, transparency and coordination.  Resources could be allocated to 
projects on the basis of their economic and social rates of return, with some weighting of resource allocated per country based on the severity of the trade shocks, adjustment costs incurred, size of 
country and poverty and integration of trade polic ies within the national development strategy.  
34. The financing of the Multilateral Trade Facility  should come from the additional AfT funding 
announced in Hong Kong and other mu ltilateral conferences in 2005.  A simple statistical formula, 
such as a percentage of the AfT additional flows,  could be used to decide on the amount of the 
resources to be transferred to the Facility.  It would have the merit of linking the Facility to the 
monitoring system of AfT flows and multilateralizing a part of the new "additional" bilateral funding. 
35. In view of the deep-seated and structural pr oblems to be addressed, the AfT Facility should 
not be designed as a one-off initiative but should c ontain a built-in review mechanism that would 
trigger successive replenishment.  
D. R
ELEVANT  INSTRUMENTS FOR AFT 
36. Needs assessmen t.  A first step will be some kind of country-driven needs assessment.  In the 
case of LDCs participating in the IF, such needs as sessments are already available and form part of 
the DTIS process. 
37. However, existing needs assessme nts prepared for the DTIS should be revisited, better 
prioritizing the action matrices and proposing additi onal priority actions for strengthening supply 
capacities and building trade-related infrastructur es.  Only a few DTIS mention the need for 
                                                      
6 Periodicity of CG and RT is not fixed and sometimes there are several years between meetings.  WT/AFT/W/22 
 Page 7 
 
 
  investments, but it is in a rather vague manner, far from what development banks would expect in 
terms of a project identification, or a pre-feasibility study.  Also, in most cases, proper integration of 
the DTIS into the PRSP has not yet occurred and more  efforts will be deployed with the support of the 
Enhanced IF.  
38. As the Enhanced IF includes up-dating of th e DTIS and developing new areas such as 
formulation of trade-related investment projects, one issue will be how to identify investment projects.  
One instrument to identify gaps and opportunities for investment is the Value Chain Analysis (VCA).  
39. This tool could be used in post-DTIS to focu s on a few sectors or pr oducts, identify needs and 
constraints and associate clusters of businesses in the preparation of requests for funding.7 
40. Policy strategies.  Poverty reduction and MDGs should provide the guide posts against which 
success of the trade policy should be measured.  Co untry ownership, policy coherence and integration 
in the budgetary process are also key elements of a successful undertaking. 
41. In the case of LDCs, the DTIS provides a coherent policy framework and an action matrix 
which are both validated during a national seminar, bringing together government officials from Finance and Development, Trade and Technical mi nistries, personalities from the private sector and 
civil society representatives.  Key actors from the PR SP process are also invited at that seminar and 
during the preparation of the DTIS they are consulte d with a view to integrating trade and investment 
policy recommendations and priority actions into th e PRSP.  Through this process, trade policy is 
embedded into the national policies.  
42. Trade integration into the PRSP and national de velopment is, however, still unsatisfactory, as 
mentioned above, and more efforts are needed thr oughout the DTIS process to reach this objective.  
43. AfT Financing.  A key principle is that AfT support, either through existing mechanisms or 
the  Multilateral Trade Facility to be established, sh ould be delivered in a way that does not increase 
the indebtedness of receiving LDCs.  Another pr inciple is that AfT financing should not be 
accompanied by new conditionalities, or some qui pro quo  about allocation of AfT grants and buying 
out the trade liberalization proposals which are part of the DDA.  Lastly, the AfT financing should be 
made predictable through multi-year commitments.  
44. Concerning the financing of TRCB for trade po licy and trade diplomacy, most of it should 
come from the Enhanced IF Trust Fund. National programmes for trade policy in other developing 
countries show that a minimum of ten million dollars ar e needed over a period of at least 5 to 7 years. 
Most probably, such country allocation would be sufficient for a comprehensive TRTA/TRCB 
programme, complementing/supplementing trade pr ojects and programmes financed by bilateral 
agencies.  Based on this information, a planning fi gure for costing the needed financing would be 
around 400 million dollars for the LDCs.  
45. Besides channelling aid money, AfT could also he lp develop public/private partnerships and 
mobilize new types of financing from the private sector , in particular from tran snationals.  Financing, 
building and operating major infrastructure project s, for example harbours or airports, can be 
attractive investment opportunities for international operators.  AfT support c ould take the form of 
fielding technical advisory missions, providing le gal advice during the negotiations, and sometimes 
financing some related secondary infrastructures in  order to make the package attractive for the 
investor. 
                                                     
 
7 Value Chain Analysis (VCA) was recommended in  the UNCTAD (2005) manual on the Integrated 
Framework; a contribution from the Zambian Mission in Geneva to the AfT Task Force gives detailed 
information on the VCA (WT/AFT/W/1).  This tool is used by DFID and other aid agencies. WT/AFT/W/22 
Page 8  
 
  46. Delivery mechanisms. For delivering AfT,  either direct budget support or sectoral budget 
support are the preferred modalities.  In the latte r case, aid for trade could be articulated under a 
Sector Wide Approaches (SWAPs), organizing do nors' support around a core group of policies and 
trade-related investments financed by the Multilatera l Trade Facility. SWAPs could be instrumental in 
developing synergies with bilateral ODA for strengthening competitiveness and increasing exports.  
47. Allocations made to the national budget should be  monitored through a set of indicators to be 
jointly selected by the parties.  As much as po ssible the Government should lead collaborative 
evaluations of AfT by agencies and use the fi ndings and recommendations to guide the processes 
involved for strengthening capacities and increasing exports. 
E. G
OVERNANCE OF THE AFT 
48. The following proposals for AfT governance build as much as possible on existing bodies and 
mechanisms and refer to the AfT architecture outlin ed in the earlier section.  AfT governance issues 
have to be discussed at the global and country levels. 
1. At the Global Level 
49. The Multilateral Trade Facility  should be comprised of a:  (i) Forum;  (ii) a Board of 
Directors;  (iii) a Chief Executive Officer (CEO) and a secretariat. 
 (i) The Forum should be opened to all WTO Members, representatives of NGOs and the 
private sector, specialized agencies and De velopment Banks, etc…  It will meet every 
two years and its primary function is advisory.  It will provide a space for information, debates and criticisms. 
 
 (ii) The Board of Directors should be comp osed of eminent and experienced individuals 
from developing countries, in particular LDCs, donor countries and agencies.  The developing countries should have majority  representation on the Board.  The Board 
will ensure oversight, provide policy orient ation and shape the strategy, approve the 
annual budget, review and approve the investment proposals to be funded. 
 
 (iii) The CEO is managing the Secretariat, is responsible for executing decisions of the   Board; overseeing their implementation and coordinating the strategy and reporting to 
  the Board and the Forum.  
50. The Facility is a financial instrument, not an implementation mechanism. Financial resources 
of the Facility should be used in priority for LD Cs.  The Facility would finance priority projects 
related to investing in regional projects and progra mmes, transferring resources for cost adjustment 
and investing in SWAPs and/or investment projects identified by the DTIS.  Projects financed under that category would be exclusively for LDCs. 
51. Projects should be identified by the beneficiary country and prepared if requested with the 
support of one agency (i.e., World Bank, Re gional Development Bank, WTO, UNDP and UN 
specialized agencies).  These projects would be reviewed by a Technical Group formed by the 
financial institutions.  Once projects are approved by  the Board of Directors, contracts will be drawn 
up between the Government, the Facility and the selected agency designated for implementation.  WT/AFT/W/22 
 Page 9 
 
 
  52. The AfT monitoring function  is essential.  It will be built on the WTO-OECD/DAC trade 
capacity building data base.  Information w ill be fed to the various OECD/DAC and WTO 
committees on the level of AfT funding, its incremen tal dimension, delivery and gaps.  To carry out 
its function, it will rely on information provided  by the national committees and donors.  More 
detailed information on Monitoring and Evalua tion (M&E) systems are given in section F –
"Evaluation". 
53. Streamlining and improving AfT coordination.   It is essential that those responsible for 
shaping the new multilateral trading system factor in the special problems faced by LDCs and co-
operate with the development community to design the appropriate assistance for a more level playing 
field.  Likewise, the donor community can do a bett er job in responding to LDCs needs and use its 
resources in a more rational manner,  thereby avoiding redundancies.  
54. A small Unit should be established in the WTO  (i) to review global AfT trends and identify 
countries facing capacity problems;  (ii) to gather and disseminate information on design, delivery and 
evaluation of AfT at the country level;  (iii) to ra ise issues with the donor community related to gaps 
and inefficiencies in aid for trade and promote stre amlining of existing AfT mechanisms;  and (iv) and 
to foster coherence between trade and development policies.  
55. The work of this Unit will be supported by a Technical Advisory Group (TAG) composed of 
specialists from the World Bank and Regional Development Banks, UNDP and the specialized 
agencies, representatives from LDCs and donor countries.  The Technical Advisory Group will 
prepare technical reviews, collaborative assessments and proposals for improvement on any of the four points mentioned above.  Some five to ten country progress assessments in the area of trade 
should be prepared each year by the TAG.  
56. Recommendations of the WTO Unit for AfT shoul d be passed for review and appropriate 
actions to the WTO General Council and its subsidy bodies, the Committee on Trade and 
Development, its sub-committee on LDCs and the committee on trade and finance which is 
responsible for macro-economic coherence for revi ew and appropriate actions.  Those findings and 
recommendations should be shared with OECD/DAC and the Boards of the World Bank, IMF, UNDP 
and UN specialized agencies for their own review process. 
57. The WTO Director-General should have a strong advocacy role and engage donors on the 
volume of AfT, its efficiency and appropriateness. 
2. At the Country Level 
58. Strengthening national AfT  governance  is essential for trade mainstreaming into national 
policies, fostering aid coordination and enhancing accountability.  It is also congruent with the 
principles of the Paris Declaration.  The Enhanced  IF foresees major reinfo rcement of the existing 
national IF structures.  The following are some quotati ons from the work of the IF Task Force that can 
be useful for stimulating AfT thinking on these issues. WT/AFT/W/22 
Page 10  
 
  Box 1.  Managerial recommendations by the IF Task Force 
 
 
"To provide senior level engageme nt and coordination, and to ensure political commitment, a high 
level inter-ministerial committee should be established.  This should be led at the ministerial level and 
be coordinated by the Ministry of Trade, Finan ce, Planning… as best determined by each country. 
The close collaboration of the Ministries of Trade, Planning and Finance is critical". 
 
"In addition, to ensure support to the formulati on of the DTIS and implementation of the action 
matrices, a broad based stakeholder process includi ng government, private sector and civil society 
representation will be established".  
 
Finally "the IF Focal Point will be strengthened.  Ac cording to the local needs, the establishment of an 
implantation unit for IF projects could be envisaged , the secretariat (human resources and equipment) 
will strengthen and resources will be made available for subcontracting services.  The IF Focal Point 
should report to the inter-ministerial committee as part of the development planning process".8 
 
 
 
59. The initiative taken by the IF of establishing an IF  inter-ministerial body is laudable.  It will 
raise the trade profile and will favour synergies be tween different policies.  One cannot imagine, 
however, the multiplication of inter-ministerial bodies and add another one for AfT matters. There 
will be a need for merging different strands a nd establishing one single AfT committee which will 
deal, inter alia,  with IF issues.  
F. MONITORING AND EVALUATION  
60. Monitoring is essential fo r the success of the AfT initiative as it will provide, inter alia,  
undisputable and timely information about the so-called "additional" Af T.  This information will be 
most useful to exercise peer pressure.  The following steps should be taken. 
61. A baseline of aid-for-trade flows needs to be established, against which it will be possible to 
measure the additionality.  This baseline should be  disaggregated by groups of countries – LDCs, 
LICs – and functional categories, such as TRTA  and TRCB, infrastructures and productive sectors.  
62. The WTO-OECD/DAC Database on trade provides a good starting point but needs to be 
upgraded. One problem is the manner descriptors have  been identified and the way in which agencies 
report to the database.  This leads to some double accounting in aid flows.  In reporting aid flows, 
outlays for debt relief and reconstruction for countr ies at war should not be included.  This practice 
distorts the recent trend reported in increased aid flows for trade.  
63. An effort to better focus on trade-related in frastructures is needed.  A recent OECD paper 
argues that it is un-practicable to draw the lin e between trade-related infrastructure and more 
development type infrastructure.  The LDC Group is of the opinion that some arbitrary decision will have to be made in order to avoid the AfT being choked by multiple requests.  For accountability, it is 
also better to adopt a restricted definition of what is trade-related infrastructure, so that it can be 
monitored.  It is most likely that one single defi nition will not fit all situations: besides some obvious 
trade infrastructure, others – such as education – are determined by the development strategy of a country. 
                                                     
 
8 Recommendations from the IF Task Force for an Enhanced Integrated Framework, 2 May 2006.  WT/AFT/W/22 
 Page 11 
 
 
  64. The statistical work done in Paris and Geneva should be enriched by data on aid-for-trade 
delivery; these data should be provided by devel oping countries.  Agencies with a country presence 
and understanding of this type of wo rk could help.  Included are eval uations of aid projects or trade 
sector assistance that can provide an understanding of aid efficiency.  Support to strengthen independent national capacities for evaluation a nd monitoring should be considered for AfT 
financing.  
65. The annual report on AfT by WTO-OECD/DAC should comprise a strong analytical section.  
66. This yearly report should be reviewed by  the AfT management, discussed at the WTO 
Committee on Trade and Development, and r ecommendations for action submitted to the WTO 
General Council.
9 
67. The OECD/DAC could also use the data on AfT commitment and effective delivery, for 
example at the occasion of peer reviews.  This mechanism used by OECD/DAC for reviewing the aid 
policy of its members has been a powerful for ce for harmonizing aid practices among the OECD 
members. 
68. The performance of the AfT mechanism and its Multilateral Trade Facility should be 
evaluated periodically.  For that purpose, it is impor tant to adopt an instituti onal design that will allow 
M&E functions in terms of results and outcomes. 
 
__________ 
 
 
                                                      
9 Some have suggested using the Trade Policy Revi ew (TPR).  The periodicity of these reviews is 
however inadequate as well as the purpose of the TPR which looks at how a country complies with the new 
International Trade Architecture, rather than assessing  how trade policy is part of country's development 
strategy.