WTO, OECD Chiefs Press for Better Connectivity in Kicking Off "Aid for Trade" Review
The biennial “Global Review of Aid for Trade” kicked off on Tuesday 11 July at WTO headquarters, with the heads of multiple international agencies calling for greater efforts to improve digital connectivity, lower trade costs, and improve infrastructure through the Aid for Trade initiative.
The three-day event will draw to a close on Thursday 13 July, after over 50 sessions and plenary events under the theme “Promoting Trade, Inclusiveness and Connectivity for Sustainable Development.” This year’s event counted participants from governments, civil society, academia, and international agencies.
The Aid for Trade initiative dates back to late 2005, when it was endorsed by trade ministers at the global trade body’s ministerial conference in Hong Kong. Since then, WTO members have regularly updated their work programmes for the initiative, and reviews have been held biennially from 2007 onwards.
The preparations for these reviews include a monitoring exercise by the WTO and the Organisation for Economic Co-operation and Development (OECD), with the latest one held on 30 May under the WTO’s Committee on Trade and Development. At that time, participants noted issues such as regional aid imbalances, along with the need for better connectivity, including through information and communications technology (ICT) infrastructure, among other issues for further scrutiny.
Gambian Vice President Aja Fatoumatta Jallow Tambajang gave the keynote address on Tuesday morning, describing to a packed conference room some of the challenges her country’s economy continues to face when engaging in trade, and their interest in developing a more competitive business environment and undertaking the necessary reforms to do so.
Agency chiefs speaking on Tuesday similarly noted Aid for Trade’s potential, while also calling for more to be done to improve its reach further.
“Since it was launched just over a decade ago, over 300 billion dollars has been disbursed under the Aid for Trade initiative, reaching 146 countries. And each dollar has been targeted at helping those countries to build their trading infrastructure and capacity,” said WTO Director-General Roberto Azevêdo at Tuesday’s opening plenary.
Other officials noted that the initiative has continued to enjoy financial support even through difficult times, in what they termed was a testament to its potential.
“Since the start of the Aid for Trade initiative, commitments from bilateral and multilateral donors have increased annually by more than 10 percent… This has never stopped growing, even at a time of tight budgets, even at a time when some of the aid budgets are compromised,” said OECD Secretary-General Ángel Gurría on Tuesday.
According to a joint report by the WTO and the OECD, that same period has also seen nearly 150 developing countries receive this type of support, with just over one-quarter of aid going to least developed countries.
The WTO-OECD “Aid for Trade at a Glance” report also refers to a series of challenges, both in terms of physical and digital connectivity, which can prevent poorer countries from engaging effectively in trade, along with taking full advantage of Aid for Trade’s benefits. It also refers to the recent entry into force of the WTO’s Trade Facilitation Agreement (TFA) as a valuable development that could make it easier for smaller companies to engage in trade, along with making it simpler and cheaper for goods to cross borders. (See Bridges Weekly, 23 February 2017)
“Trade facilitation tops the aid-for-trade priorities of both developing countries and their development partners, albeit in a broader conception that also includes physical connectivity, such as transport corridors, and digital connectivity too,” the report says.
Indeed, agency leaders and event participants repeatedly raised their concerns over the limited access to the internet seen in many parts of the world, and what this means for people’s economic opportunities – referring both to regional and gender imbalances.
“3.9 billion people remain offline. Only one in four people in Africa use the internet and only one in seven people in the [least developed countries] in general. Up to a quarter fewer women than men are offline,” said Gurría on Tuesday, who warned that these limitations have implications for people’s health, education, and economic futures.
Sustainability, poverty eradication
Another area of focus during this year’s Aid for Trade Review is on how to leverage the initiative to support wider sustainability objectives – including that of eradicating poverty in all forms by 2030, as outlined under the UN’s Sustainable Development Goals.
“Let’s be ambitious. Trade has helped to lift a billion people out of poverty in our lifetimes. We know what can be achieved. So now let’s redouble our efforts to continue this work. Let’s build a more inclusive trading system, which supports the new Sustainable Development Goals, and which paves the way for a better world,” Azevêdo said.
Azevêdo also cited poor infrastructure, high trading costs, gender discrimination as “major constraints on sustainable development,” and called both for tackling those problems and supporting efforts to facilitate trade, including through the TFA.
Gurría, for his part, also flagged the value of supporting the rules-based multilateral trading system, adding that both he and Azevêdo “made this point very strongly” when attending the G20 leaders’ summit last weekend in Hamburg, Germany.
“Trade is not responsible for the world’s evils” nor can it resolve all the world’s problems, he said on Tuesday, cautioning that it should not be considered a “proxy” for globalisation.
“We left too many people behind. We have to take a hard look. But we have to promote free and fair trade for all,” said Gurría, while noting that improved Aid for Trade has the potential to help address some of these problems.
A full programme of the Global Review, together with webcasts and summaries of select sessions, can be found at the WTO website. Additional ICTSD analysis on Aid for Trade is available through Bridges Weekly’s sister publications, Bridges Africa and Passerelles.
ICTSD reporting. This article first appeared in Bridges Weekly, 13 July 2017.