Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions Towards an EU Aid for Trade strategy – The Commission's contribution {COM(2007) 158 final} {COM(2007) 164 final} {SEC(2007) 414}
Date: 2007-04-04
Institutions: European Commission
Subjects: EU aid, developing countries, development aid, economic growth, international trade, poverty, sustainable development, trading operation

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 4.4.2007 
COM(2007) 163 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE 
EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Towards an EU Aid for Trade strategy – the Commission's contribution 

{COM(2007) 158 final} 
{COM(2007) 164 final} 
{SEC(2007) 414} 

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COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE EUROPEAN 
PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE 
COMMITTEE OF THE REGIONS 

Towards an EU Aid for Trade strategy – the Commission's contribution 

1. 

ORIGIN OF THE EU AID FOR TRADE STRATEGY 

Trade  is  an  important  catalyst  for  growth  and  poverty  reduction  in  developing  countries.  But 
successful  integration  of  developing  countries  into  world  trade  requires  more  than  better  market 
access and strengthened international trade rules. In order to fully exploit the benefits from trade, 
developing countries also need to remove supply side constraints and address structural weaknesses. 
This includes domestic reforms in trade-related policies, trade facilitation, enhancement of customs 
capacities,  upgrading  of  infrastructure,  enhancement  of  productive  capacities  and  building  of 
domestic  and  regional  markets.  Complementary  efforts  are  required 
in  areas  such  as 
macroeconomic  stability,  fiscal  reforms,  promotion  of  investment,  labour  policy,  capital  and 
product market regulations and institutions, and human capital development. 

This  is  what  Aid  for  Trade  is  for.  Aid  for  Trade  should  have  a  global  scope  and  support  all 
developing countries, in particular the least developed, in their efforts to reform and to adjust to the 
world trading system, in the wider context of sustainable development. Aid for Trade is geared to 
generating  growth,  employment  and  income.  It  is  therefore  a  contribution  to  the  first  of  the 
Millennium  Development  Goals  namely  to  reduce  the  proportion  of  people  living  on  less  than  a 
dollar  a  day  (MDG  1).  It  also  supports  MDG  8,  which  is  to  establish  a  global  partnership  for 
development,  in  particular  to  develop  further  an  open  trading  and  financial  system  that  is  rule-
based, predictable and non-discriminatory. Aid for Trade is a key complement to trade negotiations. 
It is not a substitute for a pro-development outcome of these negotiations but should be delivered 
independently of progress in the negotiations. 

The concepts behind Aid for Trade are well known to the EU. The EU is collectively the biggest 
donor in the field of Trade Related Assistance (TRA). The European Consensus for Development 
identifies  trade  and  regional  integration  as  an  important  area  for  Community  action.  One  case  in 
point are the ongoing negotiations of Economic Partnership Agreements (EPAs) with the African 
Caribbean and Pacific (ACP) countries. TRA commitments are also significant for other EU partner 
countries such as those in Asia or in Latin America. 

This Communication is the Commission's contribution to further expanding EU support for Aid for 
Trade, with a view to adoption of a joint EU strategy by the Council in the second half of 2007, as 
agreed  by  the  Council  in  October  20061.  Anchored  in  well-established  policy  commitments,  and 
building on the recommendations of a WTO Task Force2, the value added of an EU Aid for Trade 
strategy  lies  in  agreeing  on  the  specific  action  to  deliver.  Such  EU  cooperation  will  reinforce  the 
impact of EU Aid for Trade and contribute to the global debate on this topic.  

1 
2 

See background in Annex. 
See details in Annex. 

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2. 

OBJECTIVES  

Aid  for  Trade  has  multiple  objectives:  to  enable  developing  countries,  particularly  the  least 
developed  countries  (LDCs),  to  use  trade  more  effectively  to  promote  growth,  employment, 
development and poverty reduction and to achieve their development objectives; to help them build 
and modernise supply-side capacity and trade-related infrastructure in order to facilitate their access 
to markets and to export more; to help them implement and adjust to trade reform and liberalisation, 
including via labour market and social adjustments; to assist regional integration; to assist smooth 
integration into the world trading system and to assist with implementing trade agreements, all in 
the context of sustainable development, preservation of natural resources and the environment, and 
promotion of decent work. 

Following the Council’s guidelines, an EU Aid for Trade strategy can contribute to these objectives 
by addressing the following issues3: 

1. 

2. 

3. 

4. 

Increasing  the  volumes  of  EU  Aid  for  Trade,  in  particular  by  taking  Trade  Related 
Assistance up to € 2 billion a year by 2010; but also by promoting an effective response to 
wider Aid for Trade needs4. 

Enhancing  the  quality  of  EU  Aid  for  Trade,  in  particular  by  applying  commitments  to 
making development cooperation more effective. 

Supporting effective monitoring and reporting.  

Ensuring  that  Commission  and  Member  States  have  sufficient  capacity  to  implement  the 
above mentioned objectives. 

As  the  Council  drew  specific  attention  to  the  Aid  for  Trade  needs  related  to  the  ongoing 
negotiations  of  Economic  Partnership  Agreements  (EPAs)  with  ACP  countries,  the  EU  strategy 
should  pay  similar  specific  attention  to  these  developments,  in  order  to  help  realise  the  full 
development potential of EPAs. Aid for Trade is also an important element of EC assistance in Asia 
and in Latin America. 

3. 

INCREASING THE VOLUME OF EU AID FOR TRADE  

3.1. 

A Roadmap for meeting the EU's financial commitments on trade related assistance 

TRA  comprises  two  categories:  "trade  policy  and  regulation";  and  "trade  development".  The  first 
refers  to  support  for  the  effective  participation  of  developing  countries  in  multilateral  trade 
negotiations, analysis and implementation of multilateral trade agreements, trade-related legislation 
and  regulatory  reforms  (including  Technical  Barriers  to  Trade  and  Sanitary  and  Phytosanitary 
measures),  tariff  structures,  support  to  regional  trade  arrangements,  trade  facilitation,  including 
customs  regimes  and  equipment,  and  issues  such  as  security  of  the  supply  chain5.  The  second 
category  covers  business  development  and  activities  aimed  at  improving  the  business  climate, 
business  support  services  and  institutions,  access  to  trade  finance,  trade  promotion  and  market 
development  in  the  productive  and  services  sectors,  including  at  the  institutional  and  enterprise 
level. 

3 
4 
5 

The strategy will have a much wider coverage than the recently created EC budget line on Aid for Trade. 
See definitions in Annex. 
In line with the World Customs Organisation Framework of Standards. 

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During the baseline period 2001-2004,  the TRA commitments of  Community and Member States 
were, on average € 840 million6 and € 300 million per year respectively. The Council requested a 
roadmap for delivering in 2010 on the Community's and Member States' commitment to take this 
volume  to  € 1+1  billion  a  year.  After  analysing  the  available  figures,  the  Commission  concludes 
that  it  is  on  track  to  meet  its  commitment.  Due  to  lack  of  forecasting  data,  the  Commission  is 
however not in a position to assess whether Member States are collectively on track to attain their 
2010 target7. 

The Council decided that a substantial share of the increased EU TRA should go to ACP countries, 
in support of regional integration and EPAs. Guidance on the actual amounts involved is important 
for ACP partners at this point in time. On the basis of current plans the share of Community TRA 
which  will  go  to  ACP  is  expected  to  remain  relatively  stable.  Whilst  this  reflects  an  increase  in 
absolute terms, it means that the bulk of additional TRA resources for the ACP will have to come 
from the Member States. 

EU  Member  States  and  the  Community  (as  well  as  other  donors)  provide  aid  on  the  basis  of 
priorities expressed by partner countries in their national development strategies. To deliver on their 
commitments the EU depends largely on the extent to which trade-related needs are articulated in 
these  national  strategies.  Assisting  developing  countries  with  identifying  and  prioritising  trade 
related  assistance  needs  is  therefore  an  integral  part  of  meeting  the  EU's  financial  commitments. 
One key instrument for doing so is the Integrated Framework (IF) to which both the Commission 
and several MS are already contributing8. Key challenges are to enhance the IF agenda and impact 
and expand the approach to other developing countries. At regional level, effective approaches to 
trade needs assessments must be developed. 

Commission recommendations 

•  A  linear  trend  from  the  present  situation  to  their  1  billion  target  would  imply  that  the 
collective commitments to TRA by EU Member States should rise to at least € 600 million 
by 2008. The strategy should, however, consider which measures to take should TRA from 
the Member States fail to reach this level by 2008.  

•  The strategy should provide guidance on the amounts involved in the Council commitment 
to  allocate  a  “substantial  share”  of  the  additional  TRA  to  ACP  countries,  in  support  of 
regional integration and EPAs with a view to increasing the share of overall TRA allocated 
to the ACP. 

•  The EU strategy should underline the importance of integrating trade-related concerns into 
national  development  strategies  and  identify  criteria  for  when  it  is  acceptable  to  finance 
trade-related priorities in anticipation of national development strategies being updated. The 
strategy should demonstrate the EU's commitment to engage actively in the enhanced IF, in 
particular  by  active  in-country  participation;  and  to  extend  the  IF  methods  to  non-LDCs, 

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7 

8 

9 

Includes funds both from the European Development Fund and the EC general budget. 
See details on Member States in the Commission Staff Working paper accompanying the Monterrey report - 
SEC(2007) 415 - and details on EC commitments in Annex. 
The IF is a  multi-donor program whose objectives are  to support LDCs  mainstream trade into their national 
development  plans;  and  to  assist  in  the  co-ordinated  delivery  of  TRA  in  response  to  needs  identified  by  the 
LDC. In August 2006, 42 LDCs were participating in the programme. 
The  IDA-only  countries  are:  Mongolia,  Tonga,  Vietnam,  Albania,  Armenia,  Georgia,  Kyrgyz  Republic, 
Moldova,  Tajikistan,  Guyana,  Honduras,  Nicaragua,  Sri  Lanka,  Cameroon,  Republic  of  the  Congo,  Cote 
d'Ivoire, Ghana and Kenya. 

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including via a plan for joint EU engagement in the creation of an IDA-only9 mechanism. 

•  The strategy should outline how to support regional trade needs assessments in support of 

regional integration. 

3.2. 

EU support to the wider Aid for Trade agenda 

The Commission fully supports the wider Aid for Trade agenda identified by the WTO Task Force, 
i.e. inclusion of trade-related infrastructure, productive capacities and trade-related adjustment. This 
broad approach is reflected for example in the 2004 EU Commodity Action Plan. Although the EU 
Council  did  not  set  specific  numerical  targets  on  the  new  Aid  for  Trade  categories,  the  EU  is 
already  providing  substantial  support  to  such  areas.  For  instance,  support  for  trade  related 
infrastructure  averaged  € 1.480  billion  a  year  from  the  Member  States  and  €  1.290  billion  a  year 
from the Community during the period 2001-2004.  

There  is  some  lack  of  clarity  in  the  new  Aid  for  Trade  categories,  and  some  overlaps  with  the 
already existing categories of TRA10. This has to be tackled if monitoring and reporting are to be 
developed usefully for Aid for Trade. This is recognised by the Aid for Trade community, including 
within the EU, and work is in progress, in particular within the OECD/DAC, to clarify and simplify 
the scope and use proxies from longstanding ODA categories. The EU, as a key partner in the Aid 
for Trade initiative, should participate in the unfolding discussions. 

In this regard, the Commission considers that economic infrastructure is a helpful proxy for trade 
related  infrastructure.  For  productive  capacities,  existing  reporting  categories  can  be  used.  In  the 
context  of  trade-related  adjustment,  the  Commission  considers  that  this  should  include  support  to 
fiscal reforms aiming at introducing more sustainable forms of tax systems11. Linked to this, budget 
support  can  be  an  appropriate  means  to  tackle  falls  in  customs  revenue  following  trade 
liberalisation, or to support trade-related social safety nets to facilitate adjustment to trade opening 
and globalisation. 

Commission recommendations  

• 

In addition to TRA, the EU strategy should include a political commitment to strengthen 
EU  support  for  trade-related  infrastructure,  productive  capacity  and  trade-related 
adjustment,  starting  by  supporting  good  coverage  of  such  issues  in  trade  needs 
assessments.  This  is  particularly  relevant  for  small,  vulnerable  and  land-locked 
economies, many of which are ACP. 

•  The EU strategy should state the intent to develop coherent EU reporting practices for all 
categories of Aid for Trade and to continue to participate actively and jointly in relevant 
discussions at international level. The strategy should make it clear that the intent of the 
EU  financial  commitment  to  TRA  is  solid  and  will  be  maintained  regardless  of  the 
evolving international debate. 

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11 

See discussion in Annex. 
In line with the principles of good governance in the tax area. 

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4. 

ENHANCING THE QUALITY OF EU AID FOR TRADE 

Increasing  levels  of  Aid  for  Trade  raise  the  questions  of  quality  and  effectiveness.  Without  due 
attention  to  these  matters,  additional  financial  resources  will  not  bring  about  the  improvements 
desired by partner countries. 

The  EU  strategy  will  not  be  starting  from  scratch.  Based  on  the  conclusions  of  the  EU  Ad  Hoc 
Working Party on Harmonisation, the EU made a substantial contribution to the Paris Declaration 
on Aid Effectiveness. It is already fully committed to the Paris principles and has gone further to act 
on several of these. In particular, in April 2006, the Council agreed on principles and a format for 
joint programming and issued a mandate for further work on complementarity and co- financing12. 

The EU Aid for Trade strategy should offer a practical application of the agreed principles, focusing 
on five quality aspects: poverty and Aid for Trade; ownership and participation; sustainability; joint 
analysis, programming and delivery; and effectiveness of regional Aid for Trade. 

4.1. 

Poverty and Aid for Trade  

Within  each  category  of  Aid  for  Trade,  choices  made  will  have  an  impact  on  poverty  levels. 
Sometimes,  there  are  trade-offs  between  indirect  and  direct  poverty  reduction  effects.  The 
Commission  has  noted  that  the  poverty  linkages  are  not  always  well  articulated  in  trade 
development strategies and Aid for Trade operations, in particular for traditional TRA.  

Deeper reflection on how to ensure poverty reduction through Aid for Trade is necessary, for each 
category of Aid for Trade. More could be done to identify the areas of Aid for Trade which bring 
about the widest and most sustainable reduction in poverty. In individual operations, the EU should 
support  analysis  of  implications  on  poverty  and  incorporate  conclusions  in  a  transparent  way. 
Efforts should specifically include the gender dimension. 

The decent work agenda13 is of relevance here, to address trade related issues of labour market and 
social  adjustment.  Similarly, 
the  world-wide 
implementation of ILO’s core labour standards. Voluntary initiatives giving consumers assurances 
relevant  to  sustainable  development,  such  as  Fair  Trade,  eco-labels,  and  comparable  corporate 
schemes, are also important instruments with potential for reducing poverty and promoting socio-
economic development, which a joint EU strategy should address. 

the  strategy  should  confirm  support  for 

Commission recommendation 

•  The  strategy  should  stress  the  importance  that  the  EU  attaches  to  the  impacts  of  Aid  for 
Trade  on  poverty,  and  lay  down  steps  to  ensure  that  the  activities  undertaken  under  the 
strategy deliver in this regard. 

4.2. 

Ownership and participation  

Ownership  and  participation  are  two  aid  effectiveness  principles  of  special  importance  to  Aid  for 
Trade.  Better  ownership,  manifested  by  integration  of  trade-related  issues  into  poverty  reduction 
and  equivalent  strategies,  is  necessary  for  increasing  Aid  for  Trade.  Identifying  pertinent  trade 
priorities,  building  consensus  for  reform  policies  and  developing  effective  remedies  to  address 

12 
13 

See Annex for details. 
Cf.  Council  Conclusions  on  Decent  Work  for  All  of  1  December  2006,  and  the  Commission  Staff  Working 
Paper on Promoting Employment through EU development cooperation. 

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bottlenecks  to  trade  require  active  participation  by  the  private  sector,  social  partners  and  civil 
society.  Often,  partner  governments  need  assistance  to  manage  such  consultation  processes. 
Effective participation of a wide range of stakeholders can inter alia be facilitated by strengthening 
intermediate organisations such as chambers of commerce. 

Commission recommendation 

•  The EU strategy should emphasise the key role that the private sector and civil society can 
play in Aid for Trade. It should outline ways of supporting the capacity of governments to 
manage consultation processes, and of weaker interest groups to engage in these processes. 

4.3. 

Sustainability 

Sustainability  is  the  underpinning  principle  of  the  EU  Aid  for  Trade  strategy  and  should  be  dealt 
with in all its dimensions - institutional, financial/economic, social and environmental.  

The  key  to  institutional  and  financial  sustainability  of  programmes  lies  in  ensuring  stakeholder 
capacity-building and ownership in all operations, as discussed elsewhere in this Communication. 

To  fully  integrate  both  social  and  environmental  considerations  into  Aid  for  Trade  programmes, 
existing impact assessment regulations and procedures, both of partners and donors, need to be 
applied.  Sustainability  impact  assessments  of  trade  policies  and  agreements  should  be  further 
developed and the results better used both by the EU and partners.  

As regards environmental issues specifically, EU Aid for Trade should help partners develop more 
sustainable  production  methods  and  assist  producers  in  complying  with  (public  and  private) 
health, safety and environment standards in export markets and improve the capacity of customs to 
help implement trade-related aspects of Multilateral Environmental Agreements. 

Other important related issues are the promotion of decent work  and the development of effective 
labour  market  and  social  adjustment  mechanisms.  For  example,  the  EU  will  continue  to assist 
producers  in  complying  with  recognised  labour  standards,  practices  and  regulations  and  in 
promoting occupational health and safety. 

Commission recommendation 

• 

The  EU  strategy  should  promote  the  sustainability  of  Aid  for  Trade,  including  by 
foreseeing  support  to  stakeholder  ownership,  capacity  building  and  participation; 
pursuing social and environmental goals; applying EU and partner countries' tools and 
procedures  for  environment,  social,  gender  and  sustainability  impact  assessments; 
integrating results from such work into in-country trade needs assessments; promoting 
sustainable production methods; and helping comply with relevant product standards in 
exports markets. 

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4.4. 

Joint analysis, programming and delivery 

Recent trends in EU development aid all point in the same direction: greater complementarity and 
cooperation  is  needed  between  EU  partners,  across  all  stages  of  the  programme  cycle  and  for  all 
types of instruments. This must also apply to Aid for Trade14. 

As regards joint analysis of trade related needs, IF processes should be the preferred framework for 
EU  coordination  in  LDCs.  Similar  processes  should  be  developed  for  joint  analysis  in  other 
countries.  In  ACP  regions,  Regional  Preparatory  Task  Forces  are  important  complements,  in  the 
context of EPAs.  

As a further step, there is scope for the EU to coordinate better its response strategies in countries 
and  regions.  The  Joint  Trade  and  Development  Expert  Group  could  develop  into  an  informal 
coordination forum for multilateral initiatives. 

Opportunities for joint delivery will depend largely on progress in working through sector wide 
approaches  (SWAPs),  as  these  are  one  of  the  preconditions  for  embarking  on  sector  budget 
support. Good trade needs assessment processes and in-country coordination will help prepare the 
ground for successful SWAPs.  

The possibilities for use of general budget support in Aid for Trade should be examined, including 
the  issue  of  developing  appropriate  indicators.  Finally,  EU  co-financing  of  Aid  for  Trade  could 
allow  increasing  Aid  for  Trade  without  stretching  partners'  absorption  capacity,  by  opening  up 
existing  EC  programmes  to  Member  States  or  by  allowing  some  Member  States  to  take  the  lead 
based on their comparative advantage and expertise. 

Commission recommendations  

• 

• 

• 

• 

The  strategy  should  lay  down  actions  to  facilitate  the  EU  leading  the  way  on 
coordinated  response  strategies  in  Aid  for  Trade.  This  could  include  preparing  an 
overview of partner countries with a strong EU Aid for Trade presence, and assigning 
EU  Aid  for  Trade  contact  points  to  facilitate  in-country  EU  coordination  and  joint 
identification. 

Looking  ahead  to  future  opportunities  to  engage  in  Joint  Programming  (such  as  those 
related to the mid term review of the Commission's country strategies, including for the 
10th  EDF),  the  strategy  should  prepare  the  ground  for  good  coverage  of  trade-related 
issues in the countries concerned.  

The strategy should lay down actions to further develop use of SWAPs in Aid for Trade. 
It  should  propose  measures  to  build  the  confidence  which  is  needed  to  facilitate 
application of joint delivery methods such as budget support and co-financing. 

The  strategy  should  highlight  the  role  that  the  Joint  Trade  and  Development  Expert 
Group could play in coordination for multilateral initiatives. 

14 

See Annex. 

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4.5. 

Aid effectiveness in regional Aid for Trade 

Support  for  regional  integration  is  a  distinctive  feature  of  EU  development  cooperation  and 
relations with non-EU countries, in particular through trade and customs policy. The regional level 
is therefore important for the delivery of Aid for Trade, in particular for regions deeply engaged in 
regional  integration  efforts.  This  corresponds  to  the  growing  number  of  regional  trade  and 
cooperation agreements, the growing interest on the part of developing country partners in regional 
integration  and  the  priority  given  to  regional  integration  in  the  European  Consensus  for 
Development, the Cotonou Agreement and the EC Development Cooperation Instrument. 

Programming and delivery at regional level are not different in nature from that at national 
level.  The  same  aid  effectiveness  principles  should  be  applied,  although  this  could  be  more 
challenging at regional level. Key actions for aid effectiveness at regional level include: 

•  supporting regional partners’ capacity to own and lead Aid for Trade efforts, in particular 
by  building  regional  organisations'  capacity  to  assess  the  implications  of  trade  or  regional 
integration  and/or  trade  agreements  with  third  countries  and  strengthening  their  capacity  to 
monitor and implement commitments, including for issues such as fiscal reforms;  

•  coordinating  programming  in  support  of  regional  and  trade  integration.  Joint  EU  efforts 
could be developed to assess needs and identify areas where the EU could support the integration 
agenda  of  the  region  concerned,  including  on  issues  of  economic  and  social  integration.  Much 
can  be  done  at  regional  level  by  building  on  existing  efforts  on  private  sector  development, 
productive capacity and infrastructure; 

•  pursuing  more  streamlined  methods  of  delivery.  The  strategy  should  define  enhanced 
coordination  modalities  with  a  view  to  stepping  up  collective  mobilisation  of  AfT  finance. 
Regional  methods  of  delivery  equivalent  to  budget  support  and  co-financing  should  be 
developed.  For  example,  the  Commission  is  developing  contribution  agreements  to  facilitate 
financial  management  of  its  regional  cooperation.  Some  ACP  regions  have  begun  to  create 
regional  funding  mechanisms  to  facilitate  management  of  regional  programmes,  including 
contributions from the Commission and, possibly, other donors in support of EPAs;  

•  enhancing  cooperation  with  other  donors.  The  Commission  and  the  Member  States  should 
jointly  encourage  non  EU  donors  to  consider  increasing  their  support  to  regional  trade 
integration. Regional development banks and international financial institutions are particularly 
important. 

Commission recommendations  

• 

• 

The  EU  strategy  should  underline  the  EU's  commitment  to  applying  aid  effectiveness 
principles  at  regional  level  by  supporting  regional  partners’  capacity  to  own  and  lead 
Aid  for  Trade,  coordinating  programming,  pursuing  more  streamlined  delivery  modes 
and enhancing cooperation with other donors. 

Having  regard  to  the  ongoing  EPA  negotiations,  the  EU  strategy  should  indicate  a 
priority  for  regional  interventions  in  the  EPA  context,  particularly  as  regards 
coordinating programming and supporting regionally owned initiatives, such as regional 
EPA funds. 

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5. 

SPECIFIC ACP ANGLES OF THE PROPOSALS 

The  October  Council  paid  specific  attention  to  the  EPA-related  Aid  for  Trade  agenda  in  ACP 
countries. The measures outlined above are all essential for supporting ACP regions and countries 
in  the  context  of  the  EPAs.  Some  recommendations  are  particularly  important;  they  are  repeated 
below: 

Commission recommendations  

• 

• 

• 

• 

• 

• 

The  EU  strategy  should  provide  guidance  on  the  amounts  involved  in  the  Council's 
commitment  to  allocate  a  “substantial  share”  of  the  additional  TRA  to  ACP  countries 
with a view to increasing the share of overall TRA allocated to the ACP. 

The strategy should include a political commitment on the part of the EU to strengthen 
its  support  for  trade-related  infrastructure,  productive  capacity  and  trade-related 
adjustment,  starting  by  supporting  good  coverage  of  such  wider  issues  in  trade  needs 
assessments.  

The strategy should support, as a priority, integration of trade-related concerns into ACP 
national development strategies. 

The  strategy  should  outline  how  to  strengthen  support  to  regional  trade  needs 
assessments,  in  support  of  regional  integration.  In  the  EPA  context,  this  includes  a 
particular emphasis on the EPA Regional Preparatory Task Forces. 

The strategy should underline the commitment of the EU to applying aid effectiveness 
principles at the regional level by supporting regional partners’ capacity to own and lead 
Aid  for  Trade,  coordinating  programming,  pursuing  more  streamlined  delivery  modes 
and enhancing cooperation with other donors.  

The strategy should indicate a priority to EPA regions as regards coordinating delivery 
modes and supporting regionally owned initiatives, such as regional EPA funds. 

6. 

MONITORING AND REPORTING 

Monitoring and reporting are the key to making progress in the areas discussed above. Both process 
monitoring  and  outcome  monitoring  is  necessary,  according  to  criteria  to  be  agreed.  The  global 
monitoring and reporting foreseen within the WTO/OECD framework and the EU level monitoring 
of implementation of the EU Aid for Trade strategy are closely interlinked.  

Monitoring and reporting at the global level 

The global review mechanism proposed by the WTO Task Force on Aid for Trade should assess 
Aid for Trade delivery both quantitatively and qualitatively: 

•  Quantitatively:  Monitoring  should  include  global  Aid  for  Trade  flows  as  reported  to  the 
WTO/OECD  by  donors  plus  reports  by  beneficiaries  on  the  implementation  of  their  trade 
capacity building strategies. The Commission does not intend to duplicate the WTO/OECD work 
in  compiling  quantitative  data  on  Aid  for  Trade  but  could,  with  the  Member  States,  use  the 
existing  data  for  analysis  at  EU  level  to  deepen  understanding  of  efforts  already  made  and 
planned.  

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•  Qualitatively: The global review should also provide a platform for discussing all issues relevant 
to  the  effectiveness  of  Aid  for  Trade,  building  international  consensus  on  these  issues,  and 
exchanging  experience  between  donor  and  partner  countries.  It  should  monitor  adherence  to 
agreed  processes  recognised  important  to  aid  effectiveness,  and  outcomes.  Monitoring  should 
support results-based management of Aid for Trade, in particular by promoting development of 
clear  and  measurable  objectives  and  indicators.  Impacts  on  poverty  deserve  special  attention. 
The  review  mechanism  should  also  help  increase  understanding  of  the  most  efficient  ways  of 
spending  funds  on  Aid  for  Trade,  including  the  nexus  between  domestic  markets,  demand  and 
institutional  capacities,  and  the  ability  of  developing  countries  to  participate  in  international 
trade, the importance of the policy framework, the sequencing of trade liberalisation and Aid for 
Trade, the best way of integrating Trade issues into poverty reduction strategies etc.  

Support  for  beneficiary  countries'  own  monitoring  and  evaluation  frameworks  for  Aid  for  Trade 
will be crucial. 

Monitoring and reporting at EU level 

The EU will need to report on implementation of the EU Aid for Trade strategy, for example to the 
European Parliament. Progress on implementing the EU strategy should be assessed yearly by the 
Council, on the basis of a progress report by the Commission and Member States. Joint programme 
evaluations should be promoted. If necessary, the strategy should be adjusted. 

Commission recommendations  

•  The  EU  strategy  should  actively  contribute  to  monitoring  and  reporting  at  global  level, 

including by supporting developing countries in their reporting and monitoring. 

•  The  strategy  should  assist  in  streamlining  Commission  and  Member  States  reporting  of 
quantitative  Aid  for  Trade  flows  to  the  Doha  database  so  that  the  data  can  be  used  for 
deeper analysis at EU level.  

•  The EU strategy should lay down action to support results-based management and commit 
the  EU  to  carry  out  annual  joint  programme  evaluations  in  the  area  of  Aid  for  Trade  in 
order  to  assess  progress  in  the  priority  areas  of  the  EU  strategy  and  in  those  agreed 
internationally. 

7. 

EU CAPACITY FOR AID FOR TRADE 

Building  human  capacity  in  donor  organisations,  both  at  headquarters  and  in  the  field  is  a 
precondition for scaling up Aid for Trade. Without this capacity, trade will figure less prominently 
in the policy dialogue and donor organisations will find it more difficult to respond to the needs of 
partner countries. Capacity means both numbers of staff and skills. 

The  specific  needs  to  scale  up  capacity  will  differ  between  Member  States  and  depend  on  the 
manner in which Member States have chosen to expand their Aid for Trade. Implementing the aid 
effectiveness  agenda will be staff-intensive. However, sharing expertise could also help to reduce 
the need for an increase in human resources in the field. 

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Commission recommendations  

•  The Commission recommends taking stock of the EU's existing Aid for Trade capacity and 

expertise.  

•  The EU strategy should explore joint EU initiatives to develop and share expertise, such as 

trainings on Aid for Trade. 

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