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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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Has Bringing Aid and Trade Together Helped?

The concurrent challenges facing the aid and trade communities led to a marriage of convenience from which aid for trade ensued. As the development promises of the Doha Round crumbled, the trade community had an urgent need to mollify developing countries by demonstrating a tangible development agenda. At the same time, the aid community of multilateral institutions, bilateral donors and non-governmental organisations (NGOs) were caught between the challenge to ramp up their disbursements to absorb growing national ODA commitments and increasingly strident critiques of the effectiveness of existing aid programmes. ‘Aid for trade’ enabled the trade and aid communities to leverage one another. The World Trade Organization could point to significant development-focused activity. The aid community accessed an expanded mandate to invest growing aid resources in productive capacity.

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