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The Right to Trade

Rethinking the Aid for Trade Agenda

image of The Right to Trade
Aid for trade is a fixture in the development landscape, accounting for approximately 25 per cent of total ODA, and is being positioned as a building block in the future development agenda beyond the 2015 expiry of the Millennium Development Goals.



In The Right to Trade, Nobel Prize-winning economist Joseph E Stiglitz and Andrew Charlton argue that aid for trade has not delivered on its initial promise.



To create a genuinely pro-development trade liberalisation agenda, the authors propose that a ‘right to trade’ and a ‘right to development’ be enshrined within the WTO’s dispute settlement system; and that aid for trade funds be consolidated into a coherent and predictable framework, where dedicated funds are committed by rich countries to a Global Trade Facility and dispersed through a transparent and competitive process.



Together these proposals would help ensure that international trade works for developing countries and will help preserve a development-friendly multilateral trading system.

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Conclusion

Aid for trade was a pragmatic response to challenges facing the global trade and aid system. By 2005 the trade community faced pressure to increase the development focus of its agenda and provide tangible benefits to developing countries. At the same time, the aid community was looking for avenues to efficiently and effectively disburse growing aid budgets and demonstrate greater long-term impacts from funded projects. Aid for trade suited the political economy in which both groups found themselves.

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