Scaling Up Aid For Trade: How To Support Poor Countries To Trade Their Way Out of Poverty
Scaling Up Aid For Trade: How To Support Poor Countries To Trade Their Way Out of Poverty
Scaling Up Aid For Trade: How To Support Poor Countries To Trade Their Way Out of Poverty
15 November 2005
Trade can be an engine for growth that lifts millions of people out of poverty, but
many developing countries face constraints that prevent them from participating in the
global trading system. Even if trade rules are radically reformed and a pro-
development round is achieved at the WTO Ministerial in Hong Kong in December
2005, current behind the borders problems mean that poor countries will continue to
lose out on the potential benefits of global trade.
Aid to address these constraints was a key promise of the Uruguay and Doha Rounds,
but donor efforts to date have been wholly inadequate. More money to help countries
strengthen their ability to trade is urgently needed. Oxfam believes this assistance must
be recipient-driven, additional to existing development aid, free of economic
conditions, adequate, predictable and complementary to rather than a substitute for
better and fairer trade rules.
However, the current World Bank/IMF proposal will not meet these criteria, and
instead could be used to coerce countries to liberalize their trade regimes. Therefore
Oxfam believes the proposal for an enhanced Integrated Framework needs
considerable reform if it is to deliver real aid for trade.
Oxfam believes that to genuinely assist poor countries, aid for trade monies must not
only be additional to development aid and meet standards of aid effectiveness, such as
those outlined in the Cotonou Agreement or the OECD DAC Paris Declaration on Aid
Effectiveness, but they should also complement a pro-poor round of trade negotiations
that puts development at the heart of the talks.
1
In our Common Interest, Report of the Commission for Africa, March 2005, pp.255-6.
2
WTO, Market Access for Exports of Goods and Services of the Least Developed Countries:
Barriers and Constraints, WT/COMTD/LDC/W/11/Rev.1, 14 December 1998.
3
Source: UNDP, TechnoServ.
4
The UN Task Force report, which lays out a vision of how the trading system could contribute
to achieving the MDGs, was followed up by a research program funded by the UKs Department
for International Development (DFID). The steering committee was headed by Ernesto Zedillo,
Chair of the Yale Center for the Study of Globalization.
5
Strengthening the Global Trade Architecture for Economic Development: An Agenda for
Action, main findings of the research for the Global Trade and Financial Architecture Project,
2005.
6
T. Baunsgaard and M. Keen (2004), Tax Revenue and (or?) Trade Liberalization, IMF
Working Paper, draft version, September 20, 2004, available at: www.imf.org.
7
Sachs, Jeffrey, The Year of Development, World Vision International, Second Quarter 2005,
at: Hwww.globalfutureonline.orgH.
8
1994 Decision on Measures in Favor of Least-Developed Countries, WTO. WTO members
agreed that: least developed countries shall be accorded substantially increased technical
assistance in the development, strengthening, and diversification of their production and export
bases including those of services to enable them to maximize the benefits from liberalized
access to markets.
9
1994 Decision on Measures in Favor of Least-Developed Countries; 1994 Decision on
Measures Concerning the Possible Negative Effects of the Reform Programme on Least-
Developed and Net Food Importing Developing Countries; and 2001 Decision on
Implementation-Related Issues and Concerns.
10
LDC declarations were adopted at Zanzibar (2001), Dhaka (2003), Dakar (2004), and
Livingstone (2005). Accessible at: Hwww.wto.orgH.
11
Livingstone Declaration, 2005.
12
Negotiating Group on Market Access: Minutes of Meeting, WTO, TN/MA/M/9, 19 December
2003.
13
Non-LDC developing countries demand that the development issues be addressed within the
talks, for instance in the most recent G20 Ministerial Declaration, adopted in September 2005,
which states: Ministers recognized that preferencesare being eroded Ministers also agree
that, in accordance with the provisions of the July Framework, preference erosion should be
addressed in the negotiations.
14
Prowse, Susan, Aid for Trade: Increasing Support for Trade Adjustment and Integration, A
Proposal, April 2005.
15
Commitments of TRTA/CB by Donor from 2001-2003, WTO/OECD Trade Capacity Building
Database.
16
What is Trade Capacity Building?, Trade Capacity Building Fact Sheet #1, Inter-Action,
2005.
17
Liebrechts and Wijmenga, Evaluation of the Integrated Framework for Trade Related
Technical Assistance to the Least Developed Countries: Country Reports of Ethiopia and
Yemen, IOB Working Document, June 2004.
18
Trade Progress Report: Doha Development Agenda and Aid for Trade, Development
Committee Meeting, 25 September 2005.