Members reaffirm commitment to Aid for Trade and to development support

Members reaffirm commitment to Aid for Trade and to development support

Members reaffirm commitment to Aid for Trade and to development support

The FINANCIAL -- WTO members reaffirmed their commitment to the Aid for Trade initiative and to the development dimension of the organization at the closing session of the Aid for Trade Global Review 2017 on 13 July.

They underscored, in particular, the important role this exercise plays in helping developing and least developed countries (LDCs) improve their capacities to connect to global markets and lower trade costs.

“There has been a great sense of energy around the Global Review – and this is reflected in the numbers,” WTO Director-General Roberto Azevêdo said at the closing session of the three-day event.  “Over these 3 days we have seen over 1,500 attendees, 55 sessions and hundreds of pages of analysis. We have had a lively and informed debate, looking at the importance of Aid for Trade, and the direction of the initiative in the coming years. This high level of interest underlines the significance of this work.”

Dedicated to the theme of “Promoting Trade, Inclusiveness and Connectivity for Sustainable Development”, the Global Review provided a platform for high-level discussions on the Aid for Trade initiative, which has made a significant impact in its decade-long existence:

almost 300 billion dollars has been disbursed in Aid for Trade support since 2006;

the latest data available from 2015 shows disbursements reached 39.8 billion dollars that year – the highest amount for a single year so far;

146 developing countries have benefitted from this support to date – mainly in Africa and Asia - with 27% of the total going to LDCs.

In his closing remarks, DG Azevêdo stressed the importance of reflecting on what has been achieved so far and asked for the progress to be analysed to make sure that the programme remains relevant to members' needs.

“I see a close synergy and correlation between Aid for Trade and the Sustainable Development Goals (SDGs),” he said. “Achieving economic growth is a key objective for both initiatives. In fact, the SDGs call for an increase in Aid for Trade support for developing countries, particularly LDCs. So we must ensure that Aid for Trade continues to deliver more and better – and that we improve our coordination across the international community.”

DG Azevêdo called upon members to look more closely at the range of specific needs of LDCs and to ensure those needs  are being met, while considering the possibility of directing help in specific sectors, such as tourism – only 1% of Aid for Trade support goes directly to that sector, but for many LDCs tourism represents over 10% of GDP, according to WTO.

Looking forward, DG Azevêdo echoed the calls from many members and institutions to mainstream gender issues into the Aid for Trade work.

“I think we should ensure that future work goes further in taking gender perspectives into account,” he said. “We need to keep momentum in this area.”

Members acknowledged that, in light of the negative narrative surrounding trade, Aid for Trade should be used to tell the positive story about how trade can help countries escape poverty and connect to global value chains. Members also agreed that digital and physical connectivity clearly intertwine and that both are necessary to make countries reap the real benefits of trade.

“LDCs are yet to tap the full potential of international trade and international support is vitally important for them,” Fekitamoeloa Katoa 'Utoikamanu, UN Under-Secretary and High Representative for the LDCs, Landlocked Developing Countries and Small Island Developing States, said in an earlier plenary session on enhancing connectivity and advancing the SDGs.  

Globally, 3.9 billion people, constituting more than half the world’s population, are still offline. Mobile cellular penetration has reached over 70% in LDCs, but mobile broadband penetration stands at just below 20% compared to close to 50% globally and 90% in developed countries.

More resources are needed in the promotion of connectivity and infrastructure, both digital and physical, which are the “real game changers”, according to the Indian Ambassador to the WTO, J. S. Deepak.

Frans Lammersen, Principal Administrator in the Development Co-operation Directorate of the Organisation for Economic Co-operation and Development (OECD), underlined that countries and donors need to be aware of the multi-faceted reality of Aid for Trade.

Matthias Heible, Senior Economist of the Asian Development Bank Institute, underlined that the adjustment to  trade opening is not yet very well understood and warned of a further globalisation backlash.

“The adjustment process can be very difficult and painful,” he said. “Even in Asia, where globalisation has been widely embraced, there is a real risk of seeing some kind of backlash if we do not get this adjustment right.”

Paulo Salesi Kautoke, Head of Trade of the Commonwealth Secretariat, identified supply-side capacity as another immediate priority to address in order to counteract the continuous weakness of the export performance of  small states and LDCs.

“This week has provided a lot of food for thought,” DG Azevêdo concluded. “Enough for a feast! So let’s work together to ensure that the Aid for Trade initiative continues to go from strength to strength.”