WORLD TRADE  
ORGANIZATION  WT/COMTD/AFT/W/13 
4 June 2009 
 (09-2670) 
Committee on Trade and Development 
Aid for Trade Original:   English 
 
 
 
JOINT WTO/IDB/OECD BACKGROUND PAPER ON AID FOR TRADE 
 
LATIN AMERICA AND THE CARIBBEAN HIGH LEVEL AID-FOR-TRADE MEETING 
 
MONTEGO BAY, JAMAICA 
7 – 8 MAY, 2009 
 
   The attached background paper on Aid for Trad e is being circulated to delegations for 
information.  It was jointly prepared by the Wo rld Trade Organization, the Organisation for Economic 
Co-operation and Development, and the Inter-Ame rican Development Bank for the Latin America 
and the Caribbean High-Level Aid -for-Trade Meeting that took place in Montego Bay, Jamaica on 
7 and 8 May 2009.   
_______________ 
   
   WT/COMTD/AFT/W/13 
 Page 3 
 
 
  
 
    
 
 
      
 
 
Joint WTO/IDB/OECD Background Paper on Aid for Trade 
Latin America and the Caribbean High-Level Aid-for-Trade Meeting 
 
Montego Bay, Jamaica 
May 7-8, 2009   
   WT/COMTD/AFT/W/13 
 Page 5 
 
 
   
JOINT WTO/IDB/OECD BACKGROUND PAPER ON AID FOR TRADE 
 
LATIN AMERICA AND THE CARIBBEAN HIGH-LEVEL AID FOR TRADE MEETING 
MAY 7-8, 2009, MONTEGO BAY, JAMAICA 
 
 
I. OVERVIEW 
1. Aid for Trade (AFT) seeks to help developi ng countries, particularly least-developed 
countries and low-income countries, build the supp ly-side capacity and trade-related infrastructure 
needed to implement and benefit from World Tr ade Organization (WTO) agreements and, more 
broadly, to expand their trade.1 
2. This background paper provides an overview of  the AFT initiative, the AFT Roadmap (work 
plan) for 2009, the monitoring framework, and a desc ription of AFT flows to the Latin American and 
the Caribbean (LAC) countries.  It gives an overv iew of key messages emerging from the responses of 
LAC countries to the partner-country self-assessment based on the OECD/WTO questionnaire.  It also 
covers South-South cooperation. 
II. BACKGROUND 
3. A new AFT work program on  was agreed to at the Hong Kong Ministerial Conference in 
December 2005 and operationalized by the task force in July 2006.2  In 2007, the WTO cooperated 
with the regional development banks and the World Bank to hold three regional AFT reviews.  These 
reviews took place in Lima, Peru, on September 13- 14, 2007, for the Latin America and Caribbean 
region; in Manila, the Philippines, on September 19-20, 2007, for the Asia/Pacific region; and in 
Dar-es-Salaam, Tanzania, on October 1-2,2007, for the Africa region.  The First AFT Global Review, 
hosted by the WTO, was held from November 19-20, 2007.   
4. Themes emerging from the First Global AFT Review included the need to encourage greater 
developing country ownership of the initiative, st rengthen monitoring and evaluation, and shift focus 
of the initiative from awareness-raising to implemen tation. Working with partner agencies, a number 
of national and sub-regional AFT reviews are being held in 2009 to work to ward these objectives.  In 
the Latin American region, national reviews have be en held in Peru on  March 3,  in Honduras on 
May 4, and a sub-regional review for the Caribbean was held in Barbados on November 11-12, 2008.  
Discussions are on-going for further regional events in 20093 including a Second Regional Review of 
Aid-for-Trade being on May 7-8 in Montego Bay, Jamaica.   
5. On July 6-7, 2009, the Second Global Revi ew of Aid-for-Trade will be held at WTO 
Headquarters in Geneva, Switzerland.  This revi ew will evaluate progress made since the First 
Review in 2007 and scrutinize how AFT is being oper ationalized in the field.  Progress in securing 
additional financing will be discussed and views ex changed on how aid flows can be maintained 
against the backdrop of a worsening global economic outlook.  The impact of the financial crisis on 
the real economy and the inability to conclude th e Doha Development Agenda risk jeopardizing the 
contribution of trade to economic growth and poverty reduction in developing countries. Shortfalls in 
financial flows to developing countries due to a co ntraction in world demand generally pose a greater 
risk to commodity-producing countries. Combined  with a dependency on tariff revenues, these 
developments will render budgets vul nerable to potential reductions in trade flows. In this less 
                                                      
 1 Haiti is the only least developed country in the Latin American region.   
 2 WT/AFT/1. 
 3 A full list of planned national and sub-regional reviews is given in at 
 http://www.wto.org/english/tratop_e/d evel_e/a4t_e/ctd_sessions09_e.doc   and www.iadb.org/int. WT/COMTD/AFT/W/13 
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  hospitable environment, AFT is even more criti cal to stimulate the supply-side response of 
low-income countries. Central to this process is the examination of the conclusions emanating from 
the framework that has been put in place to m onitor AFT, which is  a key objective of the AFT 
Roadmap for 2009. 
III. MONITORING AND EVALUATION 
6. The development community’s main challenge is to improve  the effectiveness of AFT.  As 
highlighted by OECD studies, little robust research  has been undertaken about the impact and 
effectiveness of AFT programs.  In part, this is due to difficulties in assigning values to interventions 
and the absence of monitoring and evaluation framework s.  To enhance the credibility of AFT and to 
ensure that locally identified  needs – whether financial or performance related – are properly 
addressed, the Aid for Trade Task Force recommend ed establishing two accountability mechanisms:  
• At the local level, to foster genuine local ownership and to ensure that trade needs are 
adequately addressed and integrated in to national development strategies.  
 
• At the global level, to increase transparency a bout what is happening, what is not, and where 
improvements are required. 
 
7. Against this backdrop, the OECD and the WTO have set up an AFT monitoring framework to 
promote dialogue and encourage key actors to h onor commitments, meet local needs, improve 
effectiveness, and reinforce mutu al accountability.  The new monitoring system will create incentives, 
through enhanced transparency, scrutiny and dialogue ( i.e. putting a spotlight on progress), to foster 
synergies between trade and other economic policy ar eas in developing countries.  This, in turn, 
should improve the coherence of AFT with overall aid strategies and donor agencies, which is an 
essential component of an effective AFT partners hip between donors and partner countries as 
contained in the Paris Declaration on Aid Effec tiveness. This focus on  local accountability provides 
incentives to strengthen local ownership and mana gement for results. The periodic global AFT  
review,  on the other hand, will ensure that effort s of donor and partner countries are focused on the 
needs identified through local  accountability mechanism.  WT/COMTD/AFT/W/13 
 Page 7 
 
 
   
Figure 1:  Monitoring and Evaluation Framework 
 
Donor self-
assessments
Global AfT flows
Performance indicators
Qualitative  Qualitative  
analysisanalysis
Quantitative Quantitative 
analysesanalyses
Global Aid for 
Trade Review
Partner self-
assessmentMonitoring and Evaluation FrameworkMonitoring and Evaluation Framework
 
8. As illustrated in Figure 1, above, the AFT mon itoring and evaluation framework operates at 
four levels:  
• Global analysis of AFT flows using data extracted from the OECD Creditor Reporting 
Database or CRS to assess where resources are be ing delivered, identify ga ps,  highlight where 
improvements should be made, and increase tran sparency on pledges and disbursements.  
 
• Evaluations of national, regional and multila teral donors' Aid for Trade activities based on 
donor self-assessments to ensure the dissemination of best practices across countries, identify 
areas for improvement, and increase transpar ency on pledges and commitments.  
 
• Country-based monitoring and evaluation, based on partner-country (recipient) self-
assessments, to provide a more focused, country -specific perspective on whether trade is being 
mainstreamed into national development policy, trade needs are being met, financial resources 
are being provided, and AFT is effective on the ground.  
 
• The use of indicators to track the use and effectiv eness of AFT, in particular for priority areas 
identified by recipients in their self-assessment questionnaires.  
 
9. At the First Global Review in November 2007,  the OECD and WTO published a joint report 
entitled "Aid for Trade At-a-Glance 2007: 1st Global Review," which surveyed trends and 
developments in aid flows in 2002-2005.  The re port provided a benchmark against which future 
assistance could be measured in categories most closel y related to AFT.  In preparation for the Second 
Global Review, the OECD and WTO will publish a 2009 AFT report.   
 WT/COMTD/AFT/W/13 
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  Table 1:  Global AFT Commitments (in constant 2007 US$ millions) 
 2002-05 
baseline 2006 2007 % Increase vis-à-
vis baseline 
Economic Infrastructure 11,901 13,281 14,499 21.8 
Building Productive Capacity 9,823 10,735 11,824 20.4 
Trade Policy and Regulations 705 1,129 741 5.2 
Trade-related Adjustment - - 20 - 
Aid-for-Trade total 22,430 25,144 27,084 20.7 
Source: OECD Creditor Reporting System 
 
10. Table 1 presents data reported to the OECD CRS on global AFT commitments in 2002-2007.  
AFT grew in real terms by more than 20 per cent between the 2002-2005 baseline period and 2007.  
Table 2 shows that over the same period, AFT to  Latin America and the Caribbean grew by 
34 per cent, from US$1.6 billion in 2002 - 2005 to US$2.2 billion in 2007. As a result, Latin America 
and the Caribbean’s share of total AFT rose from 7.5 per cent to 8.7 per cent. 
Table 2:  AFT Commitments by Regi on (in constant 2007 US$ millions) 
 2002-05 baseline 2007  % Change 
Africa 6,985 10,214 46.2 
America 1,624 2,178 34.1 
Asia 11,017 11,225 1.9 
Europe 1,428 1,331 -6.8 
Oceania 231 292 26.4 
Source: OECD Creditor Reporting System 
 
11. Due to the time needed for in -depth reporting on aid flows,  the OECD CRS database does not 
currently capture any impact that the current fina ncial crisis may have ha d on AFT flows in 2009.  
The impact of the current worsening global econom ic outlook on AFT commitments will be a central 
issue for discussion at the Second Global AFT Review July 6-7, 2009.   
12. In December 2008, the WTO and OECD circul ated self-assessment questionnaires to donors 
and partner countries.  Significant changes were  made to the questionnaire to make it more 
user-friendly.  A total of 83 replies were received from partner countries (27 from the Latin America 
and Caribbean region) and 50 replies from donors ( both bilateral and multilateral).  In addition, 
Brazil, Chile and Argentina completed the questionnaire on South-South co-operation. 
13. A Symposium on Monitoring and Evaluation of Aid for Trade was held on September 15-16, 
2008, to help identify and assess suitable AFT in dicators. Responses to the AFT partner-country 
self-assessment questionnaires will be used to help focus indicators on partner countries' AFT 
priorities.   
14. More recently, on April 2, 2009, a special meeting on AFT was held by the WTO’s 
Committee on Trade and Development. The mee ting included presentation of AFT factsheets 
containing four main sections4 that follow the logical AFT framework. Factsheets provide for  easy 
cross-country comparisons and encourage a more  comprehensive in-country dialogue between 
                                                      
 4 The first section provides a number of basic indicat ors such as population, GDP, share of productive 
sectors in GDP, government budget and aid dependency. Aggregate country specific data (based on the OECD 
CRS database) regarding global flows, the sector distribution, the share of Aid-for-Trade in sector allocable aid 
and the top donors are addressed in the second part. Th e third part highlights the extent to which trade is 
mainstreamed in national development strategies, providing also indicators for restrictiveness of imports and 
exports and other trade-related indicator s. Finally, trade performance of the beneficiary country is analysed in 
the fourth section.  WT/COMTD/AFT/W/13 
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  stakeholders. A draft of indicators for the Aid fo r Trade Global Review 2009 was also presented at 
this time. The indicators provide additional information concerning the priority areas chosen by partner countries in their responses to the AFT questionnaire.
5 Work on indicators will be presented as 
part of the joint OECD/WTO Aid for Trade At -a-Glance publication. AFT factsheets for the 
27 countries that completed the questionnaire will be  circulated at the Latin America and Caribbean 
review in Montego Bay.  
 
Figure 2:  Global Distribution of AFT 2002-2007 
Commitments, US$ billion (2007 constant) 
 
 
 
 
 
  Source: OECD Creditor Reporting System 
 
IV. AID FOR TRADE AND LATIN AMERICA 
A. OVERVIEW OF AID-FOR-TRADE  ASSISTANCE (2002-2007) 
15. Tables 3 and 4 present data on AFT flows to LAC as reported to the OECD CRS database. 
The data is disaggregated into four sub-regiona l groups: Caribbean; Central America, Panama and 
Mexico; Andean region; and MERCOSUR countries + Chile). Table 3 provides data on aggregate 
AFT flows for each one of these sub-regions. With  a total volume reaching US$778 million, Central 
America (including Mexico and Panama) in 2007 re ceived the largest share (37 per cent) of AFT 
flows to Latin America, followed by Andean re gion (26 per cent). The Caribbean and MERCOSUR + 
Chile sub-regions received roughly one half a nd one quarter of Central America’s volume, 
respectively. Central America also benefited from the largest increase (41 per cent) in AFT flows 
between 2002-2005 and 2007, while the other th ree regions saw increases ranging between 
13 per cent and 20 per cent. Though modest in volume, the Andean, MERCOSUR, and Chile 
                                                      
 5 Those priorities are trade policy analysis, negotia tion, and implementation; WTO accession; trade 
facilitation; network infrastructure; cross-border infrastructure; other transport; competitiveness; and value 
Chains.   WT/COMTD/AFT/W/13 
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  grouping also doubled its receipts. Finally, the Ca ribbean was the sub-region where AFT accounted 
for the largest share (35 per cent) of total sector allocable ODA. 
 
Table 3: AFT Flows to Latin America  and the Caribbean by Sub-region  
 Commitments 
US$ millions Disbursements  
US$ millions AfT as % of total 
sector allocable aid 
 2002-2005 2007 2007 2007 
Caribbean 298.5 344.7 268.3 35.4 
Central America, 
Panama and Mexico 550.2 778.1 347.5 34.7 
Andean Countries 498.9 599.4 481.1 27.5 
MERCOSUR + Chile 153.7 173 261.1 24 
South America Multi-
Country (Andean  + MERCOSUR + Chile) 39.4 68.6 67.7 11.9 
Source: OECD Creditor Reporting System 
 
16. Table 4 below, shows the top 25 AFT recipi ents on average for 2006-2007. El Salvador, 
ranked at 25th, was the only Latin American country on the list. 
  WT/COMTD/AFT/W/13 
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  Table 4:  Top 25 AFT Recipients of  
Commitments, 
US$ million 
2006 constant  Income 
Group 2002-05 
avg 2006-07 
avg Share of 
Total 
AFT Share of AFT in 
Total Sector 
Allocable ODA ODA/GNI 
(2007) 
India OLIC 1,352.3 1,743.2 7.1 35.9 0.11 
Iraq LMIC 1,979.2 1,586.4 6.5 37.8 .. 
Viet Nam OLC 1,371.9 1,414.0 5.8 56.0 3.58 
Afghanistan LDC 665.0 1,254.7 5.1 40.4 33.86 
Indonesia LMIC 986.9 793.5 3.2 34.4 0.19 
Ethiopia LDC 485.1 734.5 3.0 32.1 12.48 
Egypt LMIC 518.5 585.6 2.4 49.2 0.84 
Bangladesh LDC 642.1 557.8 2.3 29.7 2.06 
Kenya OLIC 300.0 514.5 2.1 31.3 4.31 
China LMIC 695.4 438.2 1.8 17.7 0.04 
Ghana OLIC 235.6 437.1 1.8 40.2 7.59 
Uganda LDC 221.2 373.1 1.5 34.4 15.72 
Mali LDC 159.5 366.5 1.5 45.6 15.43 
Pakistan OLIC 345.8 365.3 1.5 24.6 1.51 
Morocco LMIC 280.6 349.2 1.4 30.0 1.51 
Mozambique LDC 284.2 341.1 1.4 29.1 26.33 
Tanzania LDC 324.2 305.6 1.2 23.4 17.43 
Sri Lanka LMIC 410.9 283.4 1.2 46.9 1.84 
Serbia LMIC 372.4 242.0 1.0 27.8 2.04 
Turkey UMIC 404.7 214.5 0.9 22.8 0.12 
Zambia LDC 178.8 206.4 0.8 27.3 10.20 
Georgia LMIC 82.3 206.2 0.8 52.9 3.68 
Nepal LDC 144.1 200.8 0.8 38.1 5.83 
Cameroon OLIC 88.0 198.4 0.8 36.4 9.40 
El Salvador LMIC 27.0 196.8 0.8 54.9 0.45 
TOTAL   13712.0 56.0   
Source: OECD Creditor Reporting System 
 
B. SUB-REGIONAL ANALYSIS  
17. Bilateral donors and the EC report on their ai d flows both in terms of commitments and 
disbursements.6 Analyzing the relation between commitments and disbursements provides useful 
insights on aid delivery. Commitments are firm oblig ations to provide development assistance. They 
measure the donors’ intentions and allow monitoring of aid targeted for specific purposes. They reflect how donors’ pledges and promises translate into action. In other words, they provide a  firm indication about future aid flows. Disbursement s show actual financial payments and thus, the 
realization of donors’ intentions and the implementation of their policies. Measures of disbursements 
permit the examination of how donors’ actions lead  to development results. Commitments are often 
multi-year, and subsequent disbursements are spread over several years, with  infrastructure projects 
generally taking the longest time to implement.  Consequently, an increase in aid allocations 
(commitments) is only visible in disbursement  data after a time lag of several years. 
18. A statistically correct analysis for compari ng commitments that result in disbursements 
requires matching individual donor commitments at  the project level with their corresponding 
disbursement schedule. This would be extrem ely time consuming and would go well beyond the 
scope of this report, which provides AFT data at a glance. A less precise, but still useful, approach is 
                                                     
 
 6 The IFIs do not report their disbursements to the CRS. WT/COMTD/AFT/W/13 
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  comparing 2006 and 2007 bilateral disbursements (i ncluding the EC) with commitments during the 
baseline period.  
Andean Countries 
19. Four representatives of Andean countries (Boliv ia, Colombia, Ecuador and Peru) replied to 
the joint WTO/OECD partner-country self-assessmen t questionnaire.  Tables 5 and 6 present data on 
AFT flows to Andean countries, as reported to th e OECD CRS database.  Table 5 provides data on 
aggregate AFT flows. Total AFT to the sub-re gion increased from US$499 million during 2002-05 to 
US$599 million in 2007, an increase of US$100 million, or 20 per cent.  There were strong disparities in the AFT volumes received by the region’s c ountries. Bolivia received US$279 million, which was 
more than twice the amount received by Colombia, the second highest recipient,  and approximately 
three times more than Peru and Ecuador, the other two main recipients. 
 
Table 5: AFT Flows to Andean Countries 
 Commitments 
US$ millions Disbursements  
US$ millions AFT as % of total 
sector allocable aid 
 2002-2005 2007 2007 2007 
Bolivia 233.1 279.1 113.7 36.9 
Colombia 79.3 129.7 118.2 18.4 
Ecuador 45.4 86.2 35.9 31.1 
Peru 131.6 103.1 211.4. 26.3 
Venezuela 9.4 1.2 1.9 2.5 
Source: OECD Creditor Reporting System 
 
20. Table 6 shows that in 2007 the Andean countri es, as a group, received twice as much aid for 
building productive capacity (US$395 million) th an they did for  economic infrastructure 
(US$186.5 million). This occurred despite an almo st 70 per cent increase in the volume of aid for 
economic infrastructure compared to a 6 per cent increase in aid for productive capacity building. 
However, productive capacity building, as a share of total AFT, continued to represent around 
70-90 per cent in four of the countries. The distribution among the Andean countries is in line with the global distribution, i.e. the richer the partner country the more aid is allocated for building productive 
capacities. Conversely,  poorer partner countries s eem to place a higher priority on  improving their 
infrastructure. Bolivia was the only country that received more support to address bottlenecks in its 
infrastructure than to build productive capacity.  
 
Table 6: AFT by Category to Andean Countries 
(Commitments, US$2007 constant) 
 Trade Policy  
& Regulations Economic 
Infrastructure Building 
Productive 
Capacity Trade-
Related 
Adj. Total 
 2002-05 2007 2002-05 2007 2002-05 2007 2007 2002-05 2007 
Bolivia 4.8 3.1 73.9 143. 6 154.4 132.4 0.0 233.1 279.1 
Colombia 0.3 9.4 1.8 27. 8 77.3 92.5 0.0 79.3 129.7 
Ecuador 4.7 1.3 1.5 6. 8 39.3 78.2 0.0 45.4 86.2 
Peru 7.1 4.1 33.0 8.2 91.5 90.9 0.0 131.6 103.1 
Venezuela 0.1 0.0 0.4 0. 1 8.9 1.1 0.0 9.4 1.2 
    Sub-Total 17.0 17.9 110. 6 186.5 371.3 395.0 0.0 498.9 599.4 
South America 
regional 4.2 2.8 20.5 19.0 14. 6 46.8 0.0 39.4 68.6 
Source: OECD Creditor Reporting System 
  WT/COMTD/AFT/W/13 
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  21. All respondents indicated that trade is a key pr iority in their respective national development 
plans, and all have operational strategies in priority  areas. Bolivia is formulating a sector development 
plan to enhance integration into trade and th e international economy. Colombia has a specific 
competitive strategy and a plan to internationalize its economy and promote productive transformation.
7 Ecuador’s National Development Plan reflects trade-related priorities for specific 
action plans, timetables and budgets. Peru’s  National Strategic Export Plan (PENX)8 aims to increase 
welfare, human development, and solidarity. 
22. The WTO/OECD self-assessment questionnaire requested partner countries to identify 
priority areas where  intervention would improve  capacity to benefit from trade expansion and 
integration into the world economy. Partner countri es were asked to identify three priority areas 
among 12 different options under the broad headi ngs of trade policy and regulation, economic 
infrastructure, building productive capacity, and ot her priorities.  Table 7 outlines the top three 
priority areas listed by the four respondents to the questionnaire. Priorities are listed but not numbered 
in the case of Bolivia, and Colombia placed prio rities 2 and 3 under “other priorities.” Finally, 
Ecuador selected priorities that took into account th e objectives of its National Development Plan.   
 
Table 7:  AFT Priority Areas for Bo livia, Colombia, Ecuador, and Peru 
 Priority 1 Priority 2 Priority 3 
Bolivia Trade Policy Analysis Value Chains Export Diversification 
Colombia Competitiveness Internationalization 
of the Economy Productive 
transformation 
Ecuador Regional Integration Other Transport Competitiveness 
Peru Trade Policy Analysis Export Diversification Competitiveness 
Source: WTO/OECD Self-Assessment Replies 
 
23. The WTO/OECD partner-country self-assessment questionnaire examines how trade capacity 
constraints are addressed at the regional level thr ough national trade strategies. All respondents stated 
that their trade strategies specifically address regi onal trade capacity challenges. Most also said that 
progress made in regional integration was due to joint projects in the framework of the CAN (Andean Community of Nations), UNASUR (Union of South American Nations), and ALADI (Latin-American Association of Integration). The South American Regional Infrastructure Integration 
Initiative (IIRSA)
9, supported by CAF, IDB, and the River Plate Basin Financial Development Fund, 
was mentioned by Peru as a specific example of progr ess in the physical interconnection of the region.  
With the exception of Bolivia, country respondents st ated that they participate in, or benefit from, 
AFT programs implemented at the regional level.  
24. Examples of good practices in implementing AFT processes, programs, or projects were 
given by Colombia, Ecuador, and Peru. Colombia re ferred to its Program to Ensure Quality, which 
helps companies obtain international quality certifications, as an example of good practice. Colombia also stated that competitiveness, internationalization of its econom y, and productive transformation 
have been effective in raising trade capacity.   
                                                     
 
 7 Colombia presented three attached documents to the questionnaire: “Mejoran do la competitividad de 
Colombia” February 2007, “Ejecutando una estrategia para internacionalizar la economía,” January 2009, and “Ejecutando una estrategia para alcanzar la  transformación produc tiva,” January 2009. 
 
8 For more information see http://www.mincetur.gob.pe/comercio/otros/penx/index.htm   
 9  For more information see http://www.iirsa.org/inde x.asp?CodIdioma=ESP   WT/COMTD/AFT/W/13 
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Using a Value Chain Approach to Aid for Trade – A Case St udy of the Peru’s Perishable Agricultural Products 
Sector 
 
The rise of global supply chains presents  a challenge of meeting buyer’s standards and suggests the need to adopt tools of 
global business for analyzing competitive strengths and weaknesse s. A basic tool involves mapping supply/value chains that 
link Peruvian producers to local, national and global markets.  Using a value chai n analysis involves identifying which steps 
add greatest value and highlights areas where Peru might attr act investment in higher value- added activities by improving 
efficiency of supply chain. This analysis was conducted in the context of the Peruvian Na tional Review on AFT organized 
jointly by IDB and WTO. 
 
Value chain analysis can be used to shape aid-for-trade stra tegy by identifying barriers that prevent people from connecting 
to markets; highlighting where internal reforms, improvements in physical infras tructure, and lower trade barriers would 
improve market access; measuring obstacles in terms of common measure (e.g., time to market; impact on cost) helps 
identify priorities; and creating a basis for integrating trad e and development goals/identifying where AFT would have the 
greatest impact. 
 
Applying the value chain methodology to identify both internal an d external barriers to trade offers some basis for evaluating 
which barriers impose the highest cost on Peruvian producers. The methodology involve s mapping the value chain for Peru’s 
perishable agricultural products and identifying the internal and external barriers to market access 
 
25. The Peruvian respondent mentioned that one  of the outcomes of its Program for the 
Development of International Trade Policies, fi nanced by the IDB between 2003 and 2007, was the 
formulation of its National Strategic Exporting Pl an, which was presented as an example of good 
practice. Peru also identified three areas in whic h AFT has been effective in raising trade capacity: 
export diversification, trade facilitati on projects, and trade policy analysis. 
26. Partner countries were also requested to identif y priority areas in which the implementation 
and effectiveness of AFT could be improved. Tabl e 8 below gives an overview of the Andean 
countries’ responses. Here, a major priority for the sub-region would be stronger donor focus on local capacity development and a greater say in the d esign of AFT. The Ecuadorian respondent also 
highlighted the need for trade-related training for ci vil servants, and the Peruvian respondent targeted 
the effective transfer of technology.   WT/COMTD/AFT/W/13 
 Page 15 
 
 
  Table 8:  Priority Areas for Improving Implementation and Effectiveness of AFT 
Andean countries 
 
BOLIVIA 
Colombia 
Ecuador 
Peru 
Greater say in design of AFT  X X  
Stronger donor focu s on local capacity 
development X X  X 
Better predictability of AFT funding   X  
More extensive use of budget support X    
More regular joint-donor implementation actions     
More harmonized reporting requirements     
More frequent joint donor-partner 
implementation efforts  X  X 
More systematic use of joint donor-partner 
monitoring/ evaluation X    
Other priorities   Public servant 
training Technology 
transfer 
Source: WTO/OECD Self-Assessment Replies 
 
27. The WTO Trade Policy Review Mechanism (TPRM) is  another instrument that can be used to 
evaluate AFT. In July 2006, the Aid for Trade T ask Force concluded that an AFT assessment should 
be included in the TPRM. Reviews for Colombia  and Peru were held in November 2006 and 
October 2007, respectively, and attached sp ecial importance to the WTO AFT initiative.10  
Caribbean Countries 
28. Tables 9 and 10 present data on AFT flows to Ca ribbean countries, as reported to the OECD 
CRS database.  Table 9 provides data on aggregate AFT flows,  which increased from US$289 million during 2002-05 to US$317 million in 2007, a gain of 10 per cent. Again, there were 
very considerable variations in the volumes received by countries. While Guyana, Haiti, and Jamaica 
received respectively US$95 million, US$55 million, and US$51 million, five countries received 
US$0.2 million or less.  
                                                     
 
 10 More information on this matter, as well as TPRs  documents and press releases, are available at the 
WTO Trade Policy Review Gateway at http://www.wto.org/english/trat op_e/tpr_e/tp_rep_e.htm#bycountry    WT/COMTD/AFT/W/13 
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Table 9: AFT Flows to Caribbean Countries
 
  Commitments 
US$ millions Disbursements  
US$ millions AFT as % of total 
sector allocable aid 
 2002-2005 2007 2007 2007 
Antigua and Barbuda 2.1 0.2 0.2 15.4 
Aruba 0.0 0.0  0.0 0.0 
Bahamas  0.0 0.0   0.0 0.0 
Barbados 0.4 15.2 0.0 77.3 
Belize 9.4 3.1 4.5 16.2 
Cuba 8.8 8.3 4.5 11.7 
Dominica 12.3 6.3 10.3 42.6 
Dominican Republic 42.2 33.5 39.6 21.4 
Grenada 6.4 0.2 0.6 7.4 
Guyana 40.7 94.8 9.8 38.6 
Haiti 81.6 54.5 48.5 12.2 
Jamaica 33.8 50.8 40.5 50.7 
St. Kitts and Nevis 1.4 0.0 0.6 0.0 
St. Lucia 7.5 8.9 5.8 45.4 
St. Vincent and 
Grenadines 4.4 7.8 9.1 26.5 
Suriname 23.0 21.8 26.7 46.6 
Trinidad and Tobago 15.4 11.5 3.6 71.4 
Source: OECD Creditor Reporting System 
 
29. In 2007, the Caribbean countries as a sub-regi on received more than 60 per cent more 
productive capacity AFT than economic infrast ructure AFT. Productive capacity AFT to the 
sub-region rose 9 per cent, increasing from US$175 million to US$191 million, while economic infrastructure AFT increased by 6 per cent from US$111 million to US$117 million. Six countries (in declining order, Antigua and Barbuda, Barbados , Belize, Trinidad and Tobago, St. Vincent & 
Grenadines, and Cuba) received more than 80 per cent  of their aid in productive capacity building, 
which, apart from Belize and Cuba, are some of the sub-region’s richest countries. St. Lucia, Guyana, 
Suriname, Dominican Republic, and Grenada receiv ed 50-70 per cent.  Lastly, three countries 
received more AFT for economic infrastructure than  productive capacity building: Haiti, Jamaica, and 
Dominica.  WT/COMTD/AFT/W/13 
 Page 17 
 
 
   
Table 10: AFT by Category to Caribbean Countries 
Commitments (US$ million, 2007 constant prices) 
 Trade Policy  & 
Regulations Economic 
Infrastructure Building Productive 
Capacity Trade-
Related 
Adj. Total 
 2002-05 2007 2002-05 2007 2002-05 2007  2002-05 2007 
Antigua and 
Barbuda 0.0 0.0 0.0 0.0 2. 1 0.2 0.0 2.1 0.2 
Aruba 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Bahamas 0.0 0.0 0.0 0. 0 0.0 0.0 0.0 0.0 0.0 
Barbados 0.0 0.0 0.0 0. 0 0.4 15.2 0.0 0.4 15.2 
Belize 0.0 0.0 0.1 0.0 9.2 3.1 0.0 9.4 3.1 
Cuba 0.1 0.0 1.4 0.7 7.4 7.6 0.0 8.8 8.3 
Dominica 0.0 0.0 6.2 6. 0 6.1 0.2 0.0 12.3 6.3 
Dominican 
Republic 0.1 3.4 11.1 12.9 31. 1 17.3 0.0 42.2 33.4 
Grenada 0.0 0.0 1.9 0. 1 4.5 0.1 0.0 6.4 0.2 
Guyana 0.4 0.8 31.8 24. 3 8.4 69.6 0.0 40.7 94.8 
Haiti 0.0 1.4 32.8 36.6 48.7 23.7 0.0 81.6 54.5 
Jamaica 1.5 0.4 9.3 28. 7 23.0 21.6 0.0 33.8 50.8 
St. Kitts-
Nevis 0.0 0.0 0.0 0.0 1. 4 0.0 0.0 1.4 0.0 
St. Lucia 0.0 0.8 3.8 0. 3 3.6 7.1 0.8 7.5 8.9 
St.Vincent 
& 
Grenadines 0.0 0.2 0.0 0.0 4. 4 7.5 0.2 4.4 7.8 
Suriname 0.0 0.0 11.3 7. 4 11.7 14.4 0.0 23.0 21.8 
Trinidad and 
Tobago 0.3 0.0 0.7 0.0 14. 3 11.5  15.4 11.5 
    Sub-
Total 2.4 10.1 110.6 117.2 175. 2 191.1 1.0 289.4 316.8 
Caribbean 
regional  5.9 4.3 0.1 0.0 4. 3 2.4 0.0 10.3 6.7 
TOTAL 8.3 14.4 110.7 117.2 179.5 193.5 1.0 298.5 344.7 
Source: OECD Creditor Reporting System 
 
30. Fourteen Caribbean country representatives  re plied to the joint WTO/OECD partner-country 
questionnaire. According to their responses, trade is  fully mainstreamed in the national development 
plans of the Dominican Republic11, Guyana, Barbados, and Jamaica12; partly mainstreamed in the 
development plans of Dominica, St, Kitts and Nevis13, St ,Lucia14, St, Vincent and Grenadines, 
Suriname15, and Trinidad and Tobago16; and not mainstreamed in the case of Antigua and Barbuda, 
                                                      
 11 The Dominican Republic presented its National Action Plan and Systemic Competitiveness National 
Plan as operational strategies  for mainstreaming trade.  
12 Jamaica is formulating the Vision 2030: National Development Plan (Draft version). Available at 
http://www.jis.gov.jm/pdf/Visio n-2030-Jamaica-Draft-Integr ated-National-Development-
Plan(January2009).pdf   
 13 St. Kitts and Nevis formulated the National Adaption Strategy (2006 – 2013) for a smooth 
adjustment from an economy based on sugar manufacturing to one based on services, tourism, financial services, and non-sugar agriculture.  
 
14 St. Lucia formulated in 2004 a National Export Development Strategy.  
 15 In Suriname, there are currently three main policy documents concerned with trade: The Multi-
Annual Development Program 2006-2011, the National Trade Strategy, and the Agricultural Sector Plan. 
 16 Trinidad and Tobago’s National Development Plan titled Vision 2020 has five development pillars. 
The third pillar focuses on  competitive business.  WT/COMTD/AFT/W/13 
Page 18  
 
  Bahamas, Grenada and Belize, although trade ma y be addressed in the annual budget or various 
sectoral strategies.
17 
31. The WTO/OECD self-assessment questionnaire ask ed partner countries to identify priority 
areas where  intervention would  improve their capacity to benefit from trade expansion and 
integration into the world economy. Partner countri es were asked to identify three priority areas 
among 12 different options under the broad headi ngs of trade policy and regulation, economic 
infrastructure, building productive capacity, and othe r priorities. Table 11 below, outlines the top 
three priorities areas listed by the Caribbean country  respondents to the questionnaire. From the table, 
it is clear that competitiveness is the main AFT prio rity area, followed by trade policy analysis, export 
diversification, and regional integration.  
 
Table 11:  AFT Priority Areas for Caribbean Countries  
 Priority 1 Priority 2 Priority 3 
Antigua and 
Barbuda Trade Policy Analysis Competitiveness Network Infrastructure 
Bahamas Trade Policy Analysis Value Chains Export Diversification 
Barbados Competitiveness Trade Policy Analysis Regional Integration 
Belize Trade Facilitation Export Diversification Regional Integration 
Dominica Competitiveness Regional Integration Trade Policy Analysis 
Dominican 
Republic Trade Policy Analysis Regional Integration Competitiveness 
Grenada Export Diversification Trade Policy Analysis Competitiveness 
Guyana Network Infrastructure Competitiveness Export Diversification 
Jamaica Network Infrastructure Competitiveness Export Diversification 
St. Kitts and 
Nevis Competitiveness18 - - 
St. Lucia Adjustment Costs Other transport Competitiveness and 
Export Diversification 
St. Vincent and Grenadines Competitiveness Network Infrastructure Regional Integration 
Suriname Trade Policy Analysis Regional Integration Network Infrastructure 
Trinidad and 
Tobago Export Diversification Competitiveness Regional Integration 
Source: WTO/OECD Self-Assessment Replies 
 
32. Most Caribbean respondents noted that some tr ade capacity constraints were addressed at the 
regional level through nati onal trade strategies, with the exception of representatives of the Bahamas, 
Jamaica, St. Lucia19, Belize and St. Vincent and Grenadines20. Fourteen respondents noted that they 
participated in regional integration processes in cluding several CARICOM  initiatives, such as the 
Caribbean Single Market and Economy, the Ca ribbean Regional Negotiating Machinery and 
CARIFORUM. Others participate actively in the Organization of Eastern Caribbean States (OECS).21 
                                                      
 17 The National Poverty Elimination Strategy in Belize and the National Export Strategy in Grenada.  
 18 The only priority listed by the country to increase competitiveness in  tourism development, 
agriculture (non-sugar) and information and communications technologies (ICT)   
19 These three declared that they were not sure if their trade capacity constraints were addressed at the 
regional level through national trade strategies. 
 20 These two declared that  region al trade capacity challenges are no t specifically addressed in their 
development plans.   
 21 The WTO Members of the (OECS) are Antigua and Barbuda, Dominica, Grenada, St. Kitts and 
Nevis, St. Lucia, and St. Vincent and the Grenadines.  WT/COMTD/AFT/W/13 
 Page 19 
 
 
  In addition, the Dominican Republic respondent hi ghlighted DR-CAFTA with the United States as an 
important regional integration process.  
33. Examples of AFT processes, programs, or proj ects that constitute good practice were given by 
respondents from the Dominican Republic, Grenada, Gu yana, St. Kitts and Nevis, and St. Lucia. The 
Dominican Republic respondent referred to project s being implemented in the framework of the 
DR-CAFTA Trade Capacity Building Committee, th e Institutional Program for Regional Integration 
financed by the European Union,22 and two more projects financed by the IDB23 and USAID as 
examples of good practices. The development of the National Export Strategy which brought together 
the public sector, private sector, and NGOs in Grenad a was singled out as an exercise that obtained 
good results. The St. Kitts and Nevis respondent referre d to that country’s Trade Facilitation Capacity 
Building Project as a good example of identifying bottlenecks and impediments existing in its supply 
chain.    
 
     
 
 
                                                     
 
 22 The ISPRI aims to help the country transition into the signed EPA between CARIFORUM and the 
EU. 
 23 They are IDB project 1511 to strengthen the management of foreign trade, and the project to support 
the transition to competitive food industry (PATCA).   WT/COMTD/AFT/W/13 
Page 20  
 
  Creating a Tool for Assessing Aid for Trade in the Contex t of Services Exports: Approaching the Market from an 
Investor’s Perspective –  A Case Study of In vestment in Medical Tourism in the Caribbean 
 
Aid for Trade in a Caribbean context is not as simple as identifying the choke point in customs clearance and providing 
assistance to overcome that obstacle.  What is needed is a similarly market-orien ted framework for analysis that directly 
addresses the challenge the Caribbean fa ces in attracting new investment to diversify its services export base.  
 
In a recent case study sponsored by the IDB, Aldonas and Trej os began by building a tool th at Caribbean governments, aid 
donors, and lenders could use in developing Aid for Trade projects  relevant to service-oriented  economies in the Caribbean.  
At its core, the approach involves the application of standard tools of investment analysis to illuminate the challenges that 
Caribbean governments will face in attracting investment in indus tries engaged in services expo rts, as well as the way in 
which donors and international organiza tions can support that effort.   
 
Once the analytical framework has been established, the author s apply it to a case study of developing medical tourism as a 
basis for assessing how best to s pur investment in non-traditional activities and where Aid for Trade might contribute to that 
effort and create a stronger platform  for Caribbean services exports,   
 
The specific investment used to drive the analysis involves the development of a facility that combines aspects of a 
retirement community with a high-quality medical facility special izing in the care of the elderly.  The facility would be 
designed to serve an aging population with relatively high dispos able income in industrialized countries confronting rising 
health care costs.   
 
The analysis suggests that medical tourism offers a signifi cant opportunity for the Caribbean.  Because of the heavy 
governmental involvement in the health care sector in the main markets the Caribbean might serve, there is also a significant 
role for Caribbean governments in shaping the market opportunity by the choices th ey make in building out a broader and 
deeper economic relationship with those ma rkets, as the region is currently doin g within the framework of the Economic 
Partnership Agreements with the European Union  
 
 
34. The work of the St. Lucia Bureau of Standard s (SLBS) in assisting local exporters in the 
agro processing, manufacturing, and other sub-sectors in meeting international standards has contributed to the adoption and perpetuation of go od practices across its productive sector. In Guyana, 
the establishment of the Guyana Revenue Auth ority and the National Procurement and Tender 
Administration Board has improved upon  the previous legislation and has promoted trade.  
 
35. In general, Caribbean country respondents  to  the WTO/OECD self-assessment questionnaire 
stated that technical cooperation relating to tr ade facilitation, trade policy analysis, regional 
integration, and competitiveness had all been eff ective in raising capacity in their countries.  
 
36. Partner countries were also requested to identif y priority areas in which the implementation 
and effectiveness of AFT could be  improved. Table 12 below gives an overview of the responses. 
Better predictability of AFT funding, stronger donor focus on local capacity development, and greater 
say in design of interventions are the main pr iorities the Caribbean country respondents cited for 
improving  effectiveness.  
    WT/COMTD/AFT/W/13 
 Page 21 
 
 
  Table 12:  Priority Areas for Improving Im plementation and Effectiveness of AFT for 
Caribbean Countries  
 
Antigua and 
Barbuda 
 
Bahamas 
Barbados 
Belize 
Dominica 
Dominican 
Republic 
Grenada 
Guyana 
Jamaica 
St .Kitts an d 
Nevis 
St. Lucia 
St Vincent and 
Grenadines 
 
Suriname 
Trinidad and 
Tobago24 
 
Greater say in design of 
AFT  X X X X X X    X    
Stronger donor focus on 
local capacity development X   X  X X X X X  X X  
Better predictability of 
AFT funding  X X X X X X X X  X  X  
More extensive use of 
Budget Support X       X X  X X   
More regular joint-donor 
implementation actions   X            
More harmonized reporting 
requirements  X        X   X  
More frequent joint donor-
partner implementation 
efforts X    X          
More systematic use of 
joint donor-partner monitoring/ evaluation            X    
Other priorities25   X            
Source: WTO/OECD Self-Assessment Replies 
 
37. During the TPR of the OECS countries26 in November 2007, AFT was addressed in both the 
member country and the secretariat report.27 The report highlighted that OECS members had received 
some technical assistance and AFT from international partners during the review period, with wide 
variations between them. Trade policy reviews for the Dominican Republic and Barbados were held 
in November and September 2008, respectively.  For Barbados, the review noted that AFT 
contributions during the period under review had been relatively low, reflecting in part its status as a 
middle-income country.28 
 
Central America, Panama, and Mexico 
38. Tables 13 and 14 present data on AFT flows to Central America, Panama, and Mexico, as 
reported to the OECD CRS database.  Table 13 pr ovides data on AFT aggregate flows.  Total AFT 
provided to the sub-region grew from US$486 m illion during 2002-2005 to US$617 million in 2007, 
an increase of US$131 million, or 27 per cent.  As  was the case with other regions, the volume of 
AFT received varied considerably between countri es. While four of seven countries received between 
US$30 million and US$20 million, El Salvador received more than 10 times that amount. As a result, 
El Salvador captured practically two th irds of all AFT to Central America. 
 
 
                                                      
 24 Trinidad and Tobago did not answer. 
 25 Barbados points outo the need for greater dialogue in the planning stages, and simplification of AFT 
programs.  
 26 The WTO members of the (OECS) are Antigua and Barbuda, Dominica, Grenada, St. Kitts and 
Nevis, St.t Lucia, and St. Vincent and the Grenadines 
 27  WT/TPR/S/190, 1 October 2007 and  WT/TPR/G/190, 1 October 2007. 
 28 WT/TPR/S/203. WT/COMTD/AFT/W/13 
Page 22  
 
   
 
Table 13: AFT Flows to Central America, Panama, and Mexico  
 Commitments 
US$ millions Disbursements  
US$ millions AFTas % of total 
sector allocable aid 
  2002-2005 2007 2007 2007 
Costa Rica  53.3 25.5 48.1 46.4 
El Salvador 29.6 379.9 39.5 65.9 
Guatemala 23.2 28.1 25.3 11.7 
Honduras 173.8 30.1 35.7 8.1 
Mexico 25.0 58.4 24.6 26.0 
Nicaragua 172.4 75.4 118.1 24.6 
Panama 9.1 19.5 7.1 9.3 
Source: OECD Creditor Reporting System 
 
39. Central America was the only Latin American sub-region to receive more aid for economic 
infrastructure than for building productive capacity in 2007. This  is not surprising since this 
sub-regional group contains some of the regi on’s poorest countries (Honduras and Nicaragua). 
Honduras and El Salvador, along with Panama,  re ceived roughly 70% of their AFT for building 
productive capacity, while Costa Rica received 89 per cent. Interestingly, Table 14 shows that the 
volume of aid to productive sectors actually fell by 21 per cent, from the baseline figure of US$279million to US$219 million in 2007. This happe ned while aid for economic infrastructure 
nearly doubled from US$195 million to US$348 million, ex plaining the large increase in total AFT to 
the sub-region. 
 
Table 14: AFT by Category to Central America, Panama, and Mexico 
Commitments (US$ million, 2007 constant) 
 Trade Policy  & 
Regulations Economic 
Infrastructure Building 
Productive 
Capacity Trade-
Related 
Adj. Total 
  2002-05 2007 2002-05 2007 2002-05 2007 2007 2002-05 2007 
Costa 
Rica 0.5 0.6 24.4 2.0 28. 4 22.8 0.0 53.3 25.5 
El 
Salvador 0.3 4.9 10.4 277.4 18. 9 96.7 0.0 29.6 379.9 
Guatemala 0.3 2.4 1.1 3. 9 21.8 17.0 0.0 23.2 28.1 
Honduras 2.2 1.3 86.7 21. 0 85.0 7.6 0.0 173.8 30.1 
Mexico 4.0 0.8 2.3 8. 3 18.6 19.0 0.0 25.0 58.4 
Nicaragua 4.0 0.4 65.7 21. 5 102.7 50.9 0.0 172.4 75.4 
Panama 0.0 0.0 4.9 14. 0 4.1 5.4 0.0 9.1 19.5 
    Sub-
Total 11.3 10.3 195.5 348.2 279. 5 219.5 0.0 486.3 616.7 
North & 
Central 
America 
regional 3.7 7.5 8.3 85.4 51. 9 68.5 0.0 63.9 161.4 
TOTAL 14.0 17.8 203.8 433.6 331.4 316.7 0.0 550.2 778.1 
Source: OECD Creditor Reporting System 
 
40. Six of the seven Central American, Panama, a nd Mexico sub-region respondents to the OECD 
questionnaire indicated that trade is included in their respective national development plans. For 
Costa Rica, Honduras and Panama, trade is a key priority. Costa Rica has been implementing a National Development Plan with specific objectiv es related to international trade. Honduras has 
formulated a National Development Plan 2007 – 2030 th at aims to ensure an inclusive social and  WT/COMTD/AFT/W/13 
 Page 23 
 
 
  economic system. Panama is implementing a St rategic Vision for Economic Development and 
Employment by 2009 and a National Trade Strategy 2004-2009. Trade issues are included in the national plans of  Guatemala, Mexico, and Nicaragua, and are also addressed in diverse sectoral strategies. Guatemala formulated an Integrated  Policy Framework for Foreign Trade; Mexico 
addresses trade in its Sector Economic Program 2007 – 2012
29; and Nicaragua has a Human 
Development National Plan.  
 
Using a Value Chain Approach to Aid for Trade – A Case Study of the Honduras’ Textile Sector 
 
Using the same value chain methodology used for Peru to analy ze Honduran textile sector, this case study highlights barriers 
that hinder Honduran producers from taking full advantage of thei r participation in a variety of trade arrangements, from its 
membership in the World Trade Organization to its regional trade arrangements and free trade agreement with the United 
States.  Applying the value chai n methodology to identify both internal and extern al barriers to trade offers some basis for 
evaluating which barriers impose the hi ghest cost on Honduran producers.  
 
Honduras has already established a successful industry, which s uggests that improving the efficiency of each step in the 
value chain could offer significant benefits, both to existing expo rts and exports of similar prod ucts.  Time and distance to 
market have become an increasingly important factor in the textile and apparel industry, particularly the ability to tap 
markets that offer a higher rate of return due to their links to  fashion or other seasonal change s in consumer preferences.   
 
Companies  based in Honduras enjoy a competitive cost adva ntage, and not a competitive advantage based in  product 
differentiation. The linkages between differe nt stages of the value chain in the Honduran textile and apparel industry are 
world class, and that is where most of its strengths seem to be coming from.  The main weakne sses lie  within the different 
links and in areas needed  to improve  readiness to take adva ntage of global market opportunitie s.  These include the backlog 
of investments in electricity ge neration, scarcity of labor, heavy concentrati on in the U.S. market, and significant barriers t o 
entry for small, local operators. The re sulting picture helps clarify which actions by Honduran policymakers and the IDB 
have the greatest potential to improve prospects of Honduran pr oducers accessing global markets. 
 
 
41. The WTO/OECD self-questionnaire asked re spondents to identify priority areas of 
intervention to improve their capacity to benefit fro m trade expansion and integration into the world 
economy. Table 15 outlines the top three priority ar eas listed by the sub-region’s six respondents. 
Trade policy analysis is undoubtedly their main pr iority. Export diversification, competitiveness, and 
regional integration were also identified as prioriti es for Central America, Panama, and Mexico.    
 
Table 15:  AFT Priority Areas for Ce ntral America, Panama, and Mexico 
 Priority 1 Priority 2 Priority 3 
Costa Rica Trade Policy Analysis Competitiveness Regional Integration 
Guatemala Trade Policy Analysis Export Diversification Regional Integration 
Honduras Trade Policy Analysis Export Diversification Competitiveness  
Mexico Trade Policy Analysis Trade Facilitation Competitiveness  
Nicaragua Trade Policy Analysis Competitiveness Export Diversification 
Panama Competitiveness Export Diversification Trade Policy Analysis 
Source: WTO/OECD Self-Assessment Replies 
 
42. The WTO/OECD questionnaire examines how trade capacity constraints are addressed at the 
regional level through national trade strategies. Respondents from Costa Rica,  Guatemala, Honduras, 
and Nicaragua noted that their trade strategies sp ecifically address regional trade capacity challenges. 
Respondents from Mexico and Panama noted that th eir strategies do not explicitly tackle regional 
problems. All respondents stated that they partic ipate in regional integration processes, citing the 
Central American Integration System30, the Latin-American Pacific Basin Initiative31, and the Central 
America Customs Union, as exampl es of regional integration.  
                                                      
 29 For more information, see 
 http://www.economia.gob.mx/img-sip/Dere cha/Bannerssip/progsectorialeconomia.pdf    
 30 For more information see http://www.sica.int/index_en.aspx?Idm=2&IdmStyle=2    WT/COMTD/AFT/W/13 
Page 24  
 
  The Regional Dimension of Aid-for-Trade 
 
The Mesoamerica Integration and Development Project (MP) ,ori ginally entitled the Plan Puebla-Panama, was launched in 
June 2001 to facilitate and advance the process of integration and development in Mexico, Guatemala, Belize, El Salvador, 
Honduras, Nicaragua, Costa Rica,  and Panama. Colombia join ed the project in 2006.  
 
The Mesoamerica Project comprises nearly 100 projects and mo re than US$9 billion in invest ments in the areas of human 
development, sustainable development, energy, telecommunications, trade facilitation, natural disaster prevention, and 
transportation. These investments aim at connecting market s, reducing transport and trade costs, enhancing trade 
competitiveness, developing foreign invest ment attraction potential, and efficiently delivering goods and services to the 
global marketplace.  
 
The signature activity is the International Network of Mesoam erican Highways (RICAM), which is designed to achieve full 
physical integration and ensure the sm ooth flow of merchandise a nd passengers by shortening travel distances on north-
south and coast-to-coast routes. In additio n, the MP is creating the Central American electrical interconnection system by 
building a 230kW transmission line 2,000 kilometers long. Th is interconnection will prepare the way for a regional 
electricity market that wi ll result in reductions in  el ectricity prices by 15 per cent to  20 per cent, signi ficantly boosting the 
competitiveness of the countries. 
 
More than 95 per cent of commercial goods in the Mesoam erican region—approximately US$6 billion—are transported 
overland using the Pacific Corridor. This  highway, which runs from Puebla, Me xico, to Panama, cr osses six national 
borders, which means it is destined to become the backbone of  commercial trade in Mesoamerica. Moreover, it will cut the 
distance from Panama to Mexico by approxi mately 300 kilometers. However, the right conditions must be created for this to 
happen, inasmuch as the infrastructure at  the border crossings along the Pacific Corr idor is unreliable and inefficient and the  
facilities are substandard. These conditions are amplified by lim ited logistical and operational pl anning at the borders, lack 
of information, and lack of regulatory harmonization. As pa rt of the Mesoamerica Project, one the main initiatives in 2009 
will be to accelerate progress on the Pacific Corridor, by carrying out a comprehensive action plan that includes 
improvements and investment s in the most needed sections and improvements to all the border crossings. These actions will 
improve the  corridor’s transit conditions. 
 
43. Most of the respondents provided examples of AFT processes, programs or projects which 
constitute good practice.  Trade facilitation proj ects developed with donors were mentioned by 
respondents from Costa Rica, Guatemala, and Honduras as examples of good practice.32 They noted 
that in general, regional integration, trade facilitation and competitiveness projects had been all 
effective in raising trade capacity in their c ountries. The Panama respondent added that export 
diversification projects have been effective in raising trade capacity, and cited the success of the 
country’s  National Program in enhancing competitiveness in different sectors (coffee, fruits and vegetables, and tourism).   
44. Partner countries were also asked to identify priority areas in which the implementation and 
effectiveness of AFT could be improved. Table 16 shows that responses varied, covering all possible 
answers except the one related to more harmonized  reporting requirements. In general, respondents 
from this  sub-region advocated having a greater say in design of AFT and to focus more on 
developing local capacity.  
 
                                                                                                                                                                    
 
 31 The ARCO Forum comprises 11 countries: Me xico, Colombia, Costa Rica, Chile, Ecuador, 
El Salvador, Guatemala, Honduras, Nicaragua, Panama  and Peru. Countries committed to continue promoting 
greater regional integration with the other countries  in the Asia Pacific. For more information see 
http://www.arcodelpacifico.org/     
 32 IDB, USAID, and the BCIE (C entral American Bank for Ec onomic Integration) projects .  WT/COMTD/AFT/W/13 
 Page 25 
 
 
  Table 16:  Priority Areas for Improving Implementation and Effectiveness of AFT 
Central America, Panama, and Mexico  
 
Costa Rica 
Guatemala 
Honduras 
Mexico33 
Nicaragua 
Panama 
Greater say in design of AFT X X   X  
Stronger donor focu s on local capacity 
development  X X   X 
Better predictability of AFT funding  X    X 
More extensive use of Budget Support   X  X  
More regular joint-donor 
implementation actions     X X 
More harmonized reporting 
requirements       
More frequent joint donor-partner 
implementation efforts X  X    
More systematic us e of joint donor-
partner monitoring/ evaluation X X     
Other priorities 
 
 
 
  
 
Source: WTO/OECD Self-Assessment Replies 
 
45. The WTO TPRM reviewed Costa Rica, Panama and Guatemala in May 2007, September 
2007, and February 2009, respectively. In Guatemala’s TPR, special mention was made of AFT and technical assistance to that country.
34 A TPR is planned for Honduras in 2010.  
 MERCOSUR and Chile 
46. Tables 17 and 18 present data on AFT flows to  MERCOSUR countries and Chile, as reported 
to the OECD CRS database.  Table 17 provides da ta on aggregate flows of AFT. Total AFT to the 
sub-region increased from US$154 million during 20 02-05 to US$173 million in 2007,an increase of 
US$19 million, or 13 per cent.   
Table 17: FT Flows to MERCOSUR Countries and Chile  
 Commitments 
US$ millions Disbursements  
US$ millions AFT as % of total 
sector allocable aid 
  2002-2005 2007 2007 2007 
Argentina 44.3 31.1 41.3 21.6 
Brazil 49.9 103.9 117.6 33.5 
Chile 39.8 17.8 71.9 13.2 
Paraguay 13.8 15.9 21.4 20.8 
Uruguay 5.9 4.4 9.0 7.8 
Source: OECD Creditor Reporting System  
 
                                                      
 33 Mexico claims not to have  received Aid for Trad e, because it  does not ta ke into account technical 
assistance received from the WTO, APEC, or ALADI. In Mexico's view, assistance provided by those 
organizations is part of annual programs to their members and thus, cannot be considered as Aid for Trade. 
 34 WT/TPR/S/210.  WT/COMTD/AFT/W/13 
Page 26  
 
  47. In 2007, MERCOSUR countries received more than five times more productive capacity AFT 
than economic infrastructure   AFT. Brazil, Arge ntina, Paraguay, and Uruguay received respectively 
92 per cent, 81 per cent, 72 per cent, and 59 per cent of their AFT for building productive capacity.  
Table 18:  Aid for Trade by Category Among the MERCOSUR Countries and Chile  
 Trade Policy  & 
Regulations Economic 
Infrastructure Building Productive 
Capacity Trade-
Related 
Adj. Total 
 2002-05 2007 2002-05 2007 2002-05 2007  2002-05 2007 
Argentina 0.6 0.1 1.3 5. 7 42.4 25.2 0.0 44.3 31.1 
Brazil 0.4 0.7 4.9 6.3 44.6 95.7 0.0 49.9 103.9 
Chile 1.9 0.1 4.8 12.6 33.1 5.0 0.0 39.8 17.8 
Paraguay 5.1 1.0 0.7 0. 7 8.1 11.5 0.0 13.8 15.9 
Uruguay 0.4 0.0 0.5 1.7 5.0 2.6 0.0 5.9 4.4 
    Sub-
Total 8.4 1.9 12.1 27.1 133. 2 139.5 0.0 153.7 173.0 
South 
America 
regional 4.2 2.8 20.5 19.0 14. 6 46.8 0.0 39.4 68.6 
Source: OECD Creditor Reporting System 
 
48. Paraguay, Uruguay, and Chile representatives replied to the joint WTO/OECD partner-
country self-assessment questionnaire. The Chile representative also replied to the South-South 
self-assessment questionnaire. Bo th Chile and Paraguay have na tional development plans or 
strategies. Chile’s development plan Growing with  Equity, implemented since the 1990s, combines 
trade policy and poverty reduction programs as prior ities. Paraguay is elaborating an Economic and 
Social Strategic Plan 2009 – 2013 in which trade plays an important role. Uruguay does not have a national development plan, but trade is included in the annual government budget and in various 
sectoral strategies. 
 
49. Table 19 outlines the top three priority areas of  intervention to improve capacity to benefit 
from trade expansion and integration into the worl d economy. They are:  export diversification, 
regional integration, and competitiveness.   
Table 19:  AFT Priority Areas for MERCOSUR Countries and Chile 
 Priority 1 Priority 2 Priority 3 
Chile Export Diversification Regional Integration Competitiveness  
Paraguay Network Infrastructure Re gional Integration Competitiveness 
Uruguay Export Diversification 
and Competitiveness Network Infrastructure Trade Policy Analysis 
Source: WTO/OECD Self-Assessment Replies 
 
50. All three respondents noted that their countries  participated in regional integration processes 
and that their trade strategies address trade capacity  constraints at the regional level.  MERCOSUR, 
ALADI, and UNASUR were mentioned as impor tant regional integration processes.  
 
51. Chile identified trade facilitation, competitiveness,  and cross-border infrastructure as effective 
in raising capacity. For Paraguay, AFT has been eff ective in the areas of trade facilitation, regional 
integration and meeting WTO accession costs. For  Uruguay, AFT has been effective in promoting 
competitiveness, export diversification, and network infrastructure.  52. Examples of AFT processes, programs, or proj ects that constitute good practice were given by 
Uruguay, Chile and Paraguay. The Entrepreneuria l Development Program of Industry Software 
(2001-2005), financed by the IDB, was presented  as a successful AFT example in Uruguay that has  WT/COMTD/AFT/W/13 
 Page 27 
 
 
  contributed to increased exports and employment. One of several examples of good practice cited by 
Paraguay was the National Technical Unit for the implementation of the Structural Convergence 
Funds of MERCOSUR, which promotes structural convergence, competitivene ss, and social cohesion 
of smaller economies and less developed regions.  Chile provided three examples of good practices, 
but pointed out that those projects were not in itially conceived as Aid for Trade. These projects 
included an agreement with the Small Busin ess Administration of U.S. and SERCOTEC, an 
agreement with the Kreditanstalf  fûr Wiederanfan Bank Group and the Multilateral Special Funds of 
the Inter-American Council for Integral Development of the OAS.  
 
53. Partner countries were requested to identify priority areas where AFT implementation and 
effectiveness could be improved.  Table 20 below gives an overview of the responses. Chile and 
Paraguay identified the same priority areas: greater say in AFT design,  stronger donor focus on local 
capacity development, and more frequent joint do nor-partner implementation efforts. Uruguay also 
urged  more regular joint-donor implementati on actions and more systematic use of joint 
donor-partner monitoring/ evaluation.  
 
Table 20:  Priority Areas for Improving Im plementation and Effectiveness of AFT  
MERCOSUR Countries and Chile   
CHILE 
Paraguay 
Uruguay 
Greater say in design of AFT X X X 
Stronger donor focus on local  capacity development X X  
Better predictability of AFT funding     
More extensive use of Budget Support    
More regular joint-donor implementation actions   X 
More harmonized reporting requirements    
More frequent joint donor-partner implementation 
efforts X X  
More systematic use of joint donor-partner monitoring/ 
evaluation   X 
Other priorities    
Source: WTO/OECD Self-Assessment Replies 
 
54. As mentioned before, the WTO Trade Policy Revi ew Mechanism is another instrument that 
can be used to review Aid for Trade.  A Trade Po licy Review for Chile will be  held in October 2009.  
 
SOUTH-SOUTH  COOPERATION  TRENDS 
55. Three countries in the Latin American a nd the Caribbean region responded to the 
WTO/OECD donor or South-South cooperation qu estionnaire: Argentina, Brazil, and Chile.35 
Argentina responded to the donor questionnaire, Chile both to the donor and the South-South 
cooperation questionnaire, and Brazil to the South- South cooperation questionnaire. Besides offering 
                                                      
 35 Peru did not answer a donor questionnaire, but stated that it provides South-South Cooperation, in 
the form of human and non-financial resources. Peru pr ovides assistance to Argentina, Brazil, Colombia, Chile, 
and Mexico. The country is also working with Israel , Egypt, India, Thailand, Singapore, and Malaysia. WT/COMTD/AFT/W/13 
Page 28  
 
  bilateral aid, all three countries favor  schemes where triangular cooperation
36 is implemented with 
financial support from developed countries and multilateral donors. 
 
56. Argentina is preparing an AFT strategy, but the country already offers South-South 
cooperation in the form of technical assistance to countries of equal or lower levels of economic and 
social development through the FO-AR (Arg entine Fund for Horizontal Cooperation).37 This fund 
aims to contribute to economic and social devel opment of developing countries; strengthen and 
consolidate bilateral relations with countries be nefitting from  aid; and promote scientific and 
technological exchange between experts. 
 
57. Chile stated that it does not have a specific  AFT strategy, but trade-related technical 
assistance constitutes a relevant area in its coope ration efforts. Chile offers mainly trade policy 
analysis and projects aimed at building institutiona l capacities. According to Brazil, that country’s 
international technical cooperation (ITC) is a non- profit demand-driven process, based on solidarity 
between developing countries that aims to help its  partners strengthen thei r institutions and human 
resources. The main goal of Brazilian South-Sout h cooperation is capacity development through 
effective transfer of knowledge and exchange of experiences.  
 
58. Measuring AFT proved problematic for all three countries. Argentina, through the FO-AR, 
does not categorize or quantify the cooperation offe red, instead measuring assistance in the number of 
courses or technicians trained.  Chile also has  ne ither a specific strategy nor a system for assessment 
in this area. Brazil contends that attaching a moneta ry value to its cooperation may understate the real 
value of its ITC, since numbers reflect the cost of the project without considering the economic value of the expertise transferred. Brazil estimates th at in 2007, it disbursed US$33.7 million in AFT 
initiatives and US$38.5 million in 2008.
38  
 
59. All three countries offer technical assistance in sanitary and phyto-sanitary measures and 
certification and trade policy analysis to other deve loping countries. In addition,  Argentina offers 
expertise in rural development and intellectua l property and supplies know-how and experiences 
through FO-AR by providing Argentine experts, re ceiving foreign experts in Argentine institutions, 
and organizing regional or local seminars on issues of interest to recipient countries.39 Chile’s 
assistance to other countries focuses on the exchange of information, trade cooperation included in its 
FTAs, and infrastructure projects. Brazil provides capacity building in trade-related areas such as 
trade barriers, legal framework, business support services,  banking, and market regulation, and is also 
engaged in promoting trade and finance through the implementation of a debt relief program. 
 
60. Mutual accountability refers to donors and developing countries providing timely, 
transparent, and comprehensive information in orde r to jointly assess development results. In Brazil, 
the Brazilian Agency of Cooperation is responsib le for following-up the implementation of ITC 
projects through analysis of their annual reports and vi sits or meetings with the entities in charge of 
the projects. Argentina uses impact indicators for each specific technical cooperation project. Chile 
does not have an impact assessment but may cons ider developing an assessment system for trade-
related projects.   
  
                                                     
 
 36 Triangular cooperation involves funding by de veloped countries and multilateral donors to 
developing countries who then provide assistance to other developing countries. 
 37 For more information see http://www.mrecic.gov.ar/portal/seree/dgcin/fo-ar.html    
 38 Brazil’s WTO/OECD south-south questionnaire.  
 39Countries wishing to receive Ar gentine aid through O-AR have to fill in the FO-AR Technical 
Assistance Application Form to establish  needs and priorities.  WT/COMTD/AFT/W/13 
 Page 29 
 
 
  South-South cooperation "Intra -Region" 
 
61. Argentina, Brazil, and Chile consider the regional dimension a key priority in their 
cooperation strategies. All agreed that support to  regional economic integration processes, specific 
requests for assistance from partners or a regiona l body, and providing cooperation only where the 
country possesses institutional capacity, are the most important factors for determining their trade-
related cooperation activities at the regional level. 
 
62. Argentina provides trade policy analysis by transmitting know-how on laws and trade 
regulations, trade facilitation focused on empowering small and medium –size enterprises and small 
producers, and building productive capacity projects ma inly in dairy and agricultural machinery. FO-
AR statistics show an increasing demand for Argen tine experts. Since its creation, the fund has 
developed more than 2,600 cooperation projects, and has sent nearly 4,000 experts to various 
countries.40 The main recipients of Argentine aid in the region have been Bolivia, Ecuador, Haiti, 
Peru, and Cuba.  
 
63. Chile has provided cooperation in the region for trade policy and regulations through its 
National Institute of Standardization, which promotes market access and integration through 
standardization. Beneficiary institutions include th e Uruguayan Institute of Technical Standards, the 
Brazilian Association of Technical Standards, and the Argentine Institute of Standardization and 
Certification . Chile also has customs cooperation agreements with Peru, Bo livia, and Ecuador, among 
others. 
 64. Chile also provides trade development assistance  for the improvement of health standards 
through enhancing the ability to access external markets,  sharing expertise of theits Office of Agrarian 
Studies and Planning in conducting international negotiations aimed at liberalizing trade and 
penetrating markets, and by focusing on the excha nge of information (export promotion activities in 
Ecuador and El Salvador) and the exchange of professionals and inte rns with Bolivia and Costa Rica. 
Since 2005 there has been an increased demand for assistance on the work of ProChile, primarily in 
Ecuador, Bolivia, Peru, and Central American countries.  
 
65. In its geographic neighborhood, Brazil provi des cooperation in trade policy analysis, 
competitiveness, trade facilitation, and economic in frastructure. For the latter, Brazil finances 
infrastructure projects to help reduce transport co sts for landlocked countries as a means to facilitate 
the circulation of goods, people and services, resulting in a more solid socioeconomic integration. In 
2004, MERCOSUR established the Fund for Structural  Convergence, whose main objective is the 
reduction of asymmetries among MERCOSUR countries.
41 Brazil is also an active participant in the 
Initiative for the Integration of Regional Infrastruct ure in South America (IIRSA). The country is also 
committed to diminishing the imbalance in trade wi th Latin American countries and stimulating trade 
relations with neighboring countries. For that reason, it launched the Program of Competitive 
Substitution of Imports, in which Brazilian experts are sent on missions to Latin American countries 
to provide technical training on how to export to  Brazil. Recently, seminars were organized in 
Ecuador, Bolivia, and Peru. 
 
66. Triangular cooperation is also a key element in South-South cooperation for Chile, Argentina, 
and Brazil. In Haiti, a project to drill wells and cultivate vegetables42 was carried out by Brazil in 
association with Argentina. Also in Haiti, Brazil is  working with the Inter-American Institute for 
                                                      
 40 Argentina’s response to the WTO/OECD donor questionnaire.   
 41 Since 2006, the Brazilian Government has made annual contributions of US$70 millions, which 
represent 70 per cent the funds receive d by FOCEM. President Lula announced  in December 2008 that Brazil is 
committed to doubling its contributions. 
 42 This project is an adapted version of an Argentinean project called “Pro-Huerta.” WT/COMTD/AFT/W/13 
Page 30  
 
  Cooperation on Agriculture (IICA). In El Salvador a nd the Dominican Republic, a joint effort with the 
United States will be made to increase ethanol production.  
 
67. Chilean examples of triangular cooperation include cooperation between the National 
Consumer Service (, the Consumer Advocate” of El Salvador, and the GTZ; the AGCI / GTZ 
Regional Cooperation Fund to impr ove metrological services in the Andean countries, Paraguay and 
Uruguay; and other projects carried in partnershi p with multilateral agencies such as FAO, IFAD and 
IICA. Since 2001, the FO-AR has been providi ng joint technical assistance with the Japanese 
International Cooperation Agency  to third countrie s in the region through the Partnership Program 
for Joint Cooperation. Similar agreements were si gned with other internati onal cooperation agencies, 
such as the Spanish and Italian agencies for intern ational cooperation, and other agreements with 
European countries are in preparation.  
 
South-South Cooperation with Other Regions  
 
68. Besides providing technical assistance to Latin American and Caribbean countries, Argentina 
and Brazil have also been engage d in cooperation projects with many countries outside the Americas. 
Argentina has been extending its activities to East ern and Central Europe, Northern Africa and the 
Middle East, Sub-Saharan Africa, and Southeast Asia . Figure 3 shows the regional distribution of the 
Argentine Fund for Horizontal Cooperation (FO- AR) between December 1992 and December 2005.  
  Figure 3: FO-AR’s activities, 1992–2005  
 
Central America and 
the Caribbean
61,3%South America
33,9%Sub-Saharan Africa
0,7%Northern Africa and 
Middle East
1,7%
Southeast Asia
0,1%Eastern Central
 Europe
2,3%
  Source: Argentina South-South questionnaire 
 
69. In the case of Brazil, cooperation is mainly provided in Africa, Asia, and the Middle East. In 
Africa, Brazil is particularly active in promoti ng biofuels production. Thro ugh triangular cooperation, 
Brazil has negotiated a project, co-funded by Norway, to train nationals of Angola and Guinea-Bissau 
on public administration in programs in Brazil. Further, within the context of the India-Brazil-South 
Africa Forum (IBSA), there is an agri cultural project with Guinea-Bissau.  
 
V. CONCLUDING REMARKS 
70. This paper provides a background briefing fo r participants at the Latin America and 
Caribbean regional review of Aid for Trade. Total AFT grew in real terms by more than 20 per cent 
between the 2002-2005 baseline period and 2007, accordi ng to data reported to the OECD CRS. Over 
the same period, AFT flows to Latin America an d the Caribbean have followed an upward path,  WT/COMTD/AFT/W/13 
 Page 31 
 
 
  growing by 34 per cent fromUS$1.6 billi on in 2002-2005 to US$2.2 billion in 2007.  As a result, Latin 
America and the Caribbean’s share of total Aid fo r Trade increased from 7 per cent to 8 per cent. 
 71. The current financial and economic  crisis is having a strong impact on developing countries. 
Foreign direct investment, tourism,  and remittances are expected to drop significantly in 2009,  and 
commodity prices are unlikely to recover in the shor t run. Preliminary signs show, however, that the 
financial crisis and the accompany ing economic downturn may not impact the steady upward trend of 
Aid for Trade, which is  consistent with  the counter-cyclical nature of aid.  
 72. OECD/WTO self-assessment questionnaires were circulated to donors and partner countries 
in December 2008. A total of 88 replies were received from partner count ries (27 from the Latin 
American and Caribbean region) and 52 replies fr om donors (both bilateral a nd multilateral).  Several 
conclusions can be drawn from the OECD/WTO pa rtner-country questionnaire regarding ways in 
which AFT relationships with deve lopment partners could be improved, including the following: a 
stronger focus on local capacity development in project  implementation, a greater say for partners in 
the design of AFT interventions, and more predicta ble funding cycles.  One interesting trend in the 
region is the emergence of South-South cooperation and triangular cooperation. Argentina, Brazil, and 
Chile responded to South-South cooperation questionnaire.  73. The high level meeting in Montego Bay May 7-8, 2009, should give a strong impetus to move 
from commitment to action in the Latin American a nd Caribbean region, which is a key objective for 
the Aid for Trade initiative in 2009.  Conclusions ar ising from the Latin American and Caribbean Aid 
for Trade meeting will feature prominently at the Second Global AFT Review to be held July 6-7, 
2009.    
__________