Aid for Trade: An Overview
Informal Presentation to FASID,
4 March, 2010
Michael Plummer

Goal of Presentation
Today I would like to give a brief overview of some of themain topics being considered under the broad theme ofAid for Trade.
Q I should note that the Aid for Trade project is a joint
collarborative effort across divisions at the OECD, as
well as with other institutions such as the WTO.
Q Hence, this presentation borrows from a number of inhouse studies, including from William Hynes, Franz
Lammersen, Jean-Jacques Hallaert, and Masato
Hayashikawa.
QRationale• Realising the benefits of trade not simply a matter of•••••3liberalisation or trade policy reform
Export response to trade reform has been weak inLDCs/Africa
Trade policies are sometimes reversed (unsustainablereforms, lack of compatible policies)
It requires an enabling policy environment
Non policy barriers to trade
Building a full spectrum of capacities – human,institutional, infrastructural

Conceptual and Political Reasons• Many developing countries, as especially LDCs, requireassistance to exploit opportunities from multilateral andregional/bilateral agreements• Gesture of North-South co-operation to spread thebenefits of trade• Aid for Trade was launched at Hong Kong Ministerial
2005 with specific pledges from major donors

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What is Aid for Trade?
• Aid for trade is not a new global development fund, nor a
new aid category. Aid for trade is part of regular ODAprogrammes.

• The Aid-for-Trade Initiative is based on the latest
thinking in development cooperation and recognises theParis Declaration as its guiding principal.

• The Initiative is coordinated by the WTO under its
coherence mandate, working closely with the OECD, theWorld Bank, UN system and Regional Development
Banks.
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What is Aid for Trade? (2)An Expanding Agenda
Traderelated
adjustment
Building
productivecapacity
Trade- related
infrastructure

Banking & Financial Services

Transport & Storage

Business & Other Services

Communications

Agriculture, Forestry & Fishing

Trade policy& regulations
Trade development
EnergyIndustry & Mining
Tourism6

OthertraderelatedneedsWhy focus on Aid for Trade?

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Objectives• Enable developing countries, particularly LDCs, to use
trade more effectively to promote growth, development
and poverty reduction and to achieve their development
objectives, including the Millennium Development Goals(MDGs).
• Help facilitate, implement and adjust to trade reform andliberalisation.
• Assist regional integration

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Monitoring Aid for Trade

DEMANDRESPONSEOUTCOME

IMPACT• Partner country
assessment• Donorassessment• Trade-related
indicators• Development
indicators• OECD/CRS

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Progress so far• Partner countries mainstream trade and operationaliseplans.

• Donors are responding.
• Regional challenges are addressed.

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Aid-for-trade flows, 2002-07

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Recipients of Aid for Trade

Conclusions
Q

Aid for trade represents best practice in development cooperation, aid architecture and is a model for policy
coherence in action.

Q

Future Donor Commitment?

Q

New players on the donor scene must be integrated

Q

Q

Aid for Trade must join up with the broader development
and trade agenda
And must be more focused at the local level.