Although the Doha Round negotiations remain at an impasse, WTO Members at the 10 October General Council meeting were able to agree to endorse the course of action set out in July by the Aid for Trade Task Force. Work on aid for trade will proceed separately from the troubled trade talks. Members also agreed on a set of recommendations aimed at making it easier for small and vulnerable economies to implement their WTO obligations.

WTO Director-General Pascal Lamy said there was clear "progress and momentum" on aid for trade "despite the current temporary setback in the negotiations," and that it was important to move forward on it.

Time for action on aid for trade: Members

Many countries, both developing and developed, intervened at the meeting to say that it was now necessary to act on the aid for trade recommendations. Emphasising the need for adequate funding, the Least-developed Country (LDC) Group specifically asked that no conditionalities be attached to aid for trade grants.

The 13-member panel's report (WT/AFT/1) had been uniformly praised when first presented to the WTO Membership in July (see BRIDGES Weekly, 2 August 2006). It had outlined policies for the WTO, donors, and recipients to follow in terms of identifying and fulfilling trade-related needs, and monitoring the progress of aid for trade activities. It had also set out a series of steps for Lamy and the WTO Secretariat to take, including setting up an 'ad hoc consultative group' to follow up on the report's recommendations, and to examine how to implement, monitor, and review aid for trade efforts.

Lamy welcomed Members' approval of the recommendations, saying "the present time-out in our negotiations should allow us to think more creatively about how trade, development and growth can fit together into a coherent whole, and aid for trade is a key piece of that puzzle." He said he had been consulting with donor and recipient governments, the International Monetary Fund (IMF), the World Bank, UN organisations, the Organisation for Economic Cooperation and Development (OECD), and regional development banks in an attempt to enhance "clarity on the resources pledged and on strategies for securing additionality to current aid for trade spending." He reported that he had worked with the US, the EU, and Japan to clarify the specific details of the multi-billion dollar pledges they had made during the Hong Kong Ministerial Conference in December 2005.

"I am convinced that there is a strong and broad commitment to increasing aid for trade in the context of a projected overall increase in [overseas development assistance]," said Lamy, pointing to rich country promises to increase total foreign aid spending to USD 50 billion by 2010. What was necessary, he emphasised, is to make aid mechanisms work more effectively and coherently. Lamy noted that recipient countries have vastly differing needs, which each would need to determine "working closely with national stakeholders, particularly the private sector, and with their development partners."

Lamy emphasised that aid for trade was not part of the Doha Round single undertaking, but said that there were nevertheless "obvious synergies" with the negotiations. This was echoed by Canadian Ambassador Don Stephenson, who added that the purpose of aid for trade was to build the supply-side capacity that developing countries needed to take advantage of new market access opportunities. Sources report that Stephenson clarified that the WTO was not going to take on the role of a development agency, but would be responsible for promoting coherence between aid for trade efforts and the broader development agenda.

Moldova, the Kyrgyz Republic, and Armenia asked to become beneficiaries of aid for trade programmes, pointing out that as low-income transition economies that had paid a high price for their recent accession to the WTO, they faced many of the same problems as developing countries.

Regional bodies to get enhanced role for SVEs

Members also adopted a separate report, this one recommending that small, vulnerable economies (SVEs) should be allowed to use regional bodies when implementing obligations under the SPS, TBT and TRIPS Agreements (WT/COMTD/SE/5). This would allow a particular group of SVEs to receive assistance from a single shared regional body.

The report, produced by the Dedicated Session of the Committee on Trade and Development, also said that the WTO and donors should consider providing technical and financial assistance to these regional bodies. However, it also specified that even if SVEs decide to use regional bodies, they would remain individually (rather than collectively) liable for notifications and other obligations.

Sources report that some Members said that non-SVE developing countries should also be permitted to seek a greater role for regional organisations. There is currently no agreed definition for SVEs in the WTO.

ICTSD reporting.