What is Aid for Trade?

In 2006, the WTO defined Aid for Trade as “activities identified as trade-related development priorities in the recipient country’s national development strategies”. It identified 6 types of activities:

The WTO Aid for Trade Task Force have specified the following six categories (i) Economic Infrastructure: Building the roads, ports, and telecommunications that link domestic and global markets; (ii) Productive capacity: Investing in industries and sectors so countries can diversify exports and build on comparative advantages; (iii) Adjustment Costs: Helping with the costs associated with tariff reductions, preference erosion, or declining terms of trade; (iv) Trade Policy and Regulations: Helping countries to develop trade strategies, negotiate more effectively, and implement outcomes; (v) Trade Development: dealing with support services for business, promoting finance and investment and conducting market analysis; and (vi) Other trade-related needs.

The Aid for Trade (AfT) initiative started in the framework of the Doha Round of World Trade Organization (WTO) talks, in particular with the 2005 Hong Kong Ministerial Declaration. Aid for Trade (AfT) is about helping developing countries, in particular the least developed, to build the trade capacity and infrastructure they need to benefit from trade opening. It is part of overall Official Development Assistance (ODA) — grants and concessional loans — targeted at trade-related programmes and projects.

It is recognized that Aid-for-Trade can be a valuable complement to the Doha Development Agenda (DDA), but it cannot be a substitute for the development benefits that will result from a successful conclusion to the DDA.

Two documents are widely regarded as internationally agreed guiding principles used in discussions on AfT: the OECD Paris Declaration on Aid Effectiveness adopted in 2005 and reconfirmed in the Accra Agenda for Action endorsed in 2008, and the recommendations of the WTO Task Force on Aid for Trade presented in 2006.