Assessing Aid for Trade

Effectiveness, Current Issues and Future Directions

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Aid for Trade (AfT) has been an integral part of official development assistance (ODA) since its inception at the World Trade Organization’s Hong Kong Ministerial in 2005. While many observers agree that the initiative has generated momentum in securing more trade support, the policy discourse on AfT continues to be vibrant and dynamic.

This volume, comprising 16 chapters prepared by 20 renowned experts from a range of international organisations, think tanks and academic institutions, including Commonwealth Secretariat, ODI, ECDPM, DIE, ICTSD, Saana Consulting, WTI Advisors, and Columbia University, provides a comprehensive review of the Aid for Trade initiative.

Part I of this volume uses quantitative and qualitative analysis to examine the effectiveness of different components of Aid for Trade and underlying factors affecting the outcomes. Part II provides analyses of current issues, including regional AfT, global value chains, infrastructure for development for agriculture, AfT adjustment and lessons from emerging economies in aiding exports. Part III looks to the future, proposing a range of possible directions including an alternative way to improve trade outcomes for developing countries from Nobel Prize-winning economist Joseph Stiglitz.



Aid for Trade Adjustment: Implications for Small and Vulnerable Economies and Least Developed Countries

This chapter analyses the role of Aid for Trade (AfT) in supporting the costs of trade-related adjustment (TRA). The inauguration of the World Trade Organization (WTO) Work Programme on AfT at the 2005 Hong Kong Ministerial was widely hailed as the creation of a permanent policy link between the aid and trade debates, which (apart from the African, Caribbean and Pacific (ACP)–European Union (EU) process) had previously been conducted largely in isolation from one another. The creation of the AfT programme was particularly welcomed by developing countries, which had been calling for aid flows to build supply-side capacity and bridge gaps in export growth with more developed economies. The link between aid and trade was particularly seen as beneficial for the small and vulnerable economies (SVEs) and least developed countries (LDCs), as a means to overcome their relative isolation and narrow engagement with the global trading economy, and their vulnerability to sudden changes in revenue and welfare resulting from trade policy shifts at home and abroad.


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