Reflections on Aid for Trade's contribution to sustainable development

26 May 2015

Ahead of the Fifth Global Review of Aid for Trade that will take place at the WTO from 30 June to 2 July 2015, a renewed sense of urgency has emerged among Least Developed Countries (LDCs) regarding the benefits of Aid for Trade (AfT) for achieving inclusive and sustainable economic growth. This has become even more poignant in the lead up towards the adoption of the Sustainable Development Goals in September, where discussions on post-2015 development are underscoring AfT as a means through which official development assistance (ODA) can assist developing countries in improving their productive capacity in trade-related areas.

The AfT initiative was launched at the Hong Kong Ministerial Conference in December 2005 with the objective to mobilise resources to address the trade-related constraints identified by developing and least-developed countries. In keeping with the theme of this year’s Review “Reducing Trade Costs for Inclusive, Sustainable Growth,” the transaction costs confronted by LDCs in particular are naturally brought into focus.

Challenges, such as export and border procedures, transport infrastructure, as well as the growing burden of non-tariff barriers, can present significant barriers to a country's competitiveness as well as to their successful integration into regional and global value chains. Despite the role of AfT in addressing these issues, doubts persist that it has fallen short in key areas.

This issue leads with an article that explores various means to address existing knowledge gaps in achieving sustainable development objectives through regional Aid for Trade.

This issue also looks at evidence on AfT effectiveness based on a series of country-level case studies conducted by ICTSD (the publisher of Bridges Africa). These studies reveal that AfT generally works when the right conditions are present. Some of the findings have a sense of déjà-vu since they are also valid for aid more generally. But the evidence presented here serves to refocus on the critical success factors that matter for AfT effectiveness. The authors suggest that, going forward, the initiative should try to tackle these factors.

The question of whether AfT has had an effect on structural transformation is also examined, and a typology of country-specific factors under which it achieves positive results is defined.

Does political will matter as much, if not more, than funding for the implementation of the WTO Trade Facilitation Agreement? This is one of the questions also tackled in this issue.

We hope you enjoy this special edition and look forward to meeting you at the WTO Global Review of Aid for Trade next month!

As usual, we welcome your substantive feedback and contributions. Write to us atbridgesafrica@ictsd.ch.

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