1. Introduction and State of Play
A strong commitment to Aid for Trade is emerging from all sides – bilateral donors, recipient countries, multilateral agencies, the private sector and civil society. The idea of trading out of poverty is embraced with rising enthusiasm. It is expected that the share of official development assistance (ODA) aimed at strengthening trade capacities will increase steadily over the coming years.
At their summits in 2005, the G-7 and the G-8 pledged to substantially increase ODA volumes. They also called on the International Monetary Fund (IMF) and the World Bank to secure additional assistance to developing countries in strengthening their trade capacities and to “ease adjustment in their economies” so that they can benefit from more open markets.
The Development Committee of the World Bank and the IMF, explored options for expanding Aid for Trade at their spring and autumn session in 2005. At the WTO December 2005 Hong Kong Ministerial Conference the most important donors announced their pledges. The EU and its member states intended to spend Euros 2 billion per year (2.4 billion US dollars at the exchange rate of the day) on trade-related programmes by 2010, the US pledged that its trade-related assistance would reach 2.7 billion US dollars by that date. Japan announced it would spend 10 billion US dollars over three years. It was unclear, however, how much of these assurances would translate into making available new resources and in what form they would be disbursed.
The Task Force on Aid for Trade, established in the wake of the Hong Kong Ministerial Conference, presented its recommendations in July 2006. The WTO Director-General (DG) reported to the General Council in July and December 2006 on securing additional financial resources and on the monitoring and evaluation of Aid for Trade respectively. He was mandated to convene periodically an Ad Hoc Consultative Group among multilateral institutions, the regional development banks, and institutional representatives of the private sector. The Ad Hoc Consultative Group will assist in preparing global reviews and providing follow-up support in terms of advocacy and fundraising.
2007 provided the opportunity to implement some of the Recommendations of the Task Force on Aid for Trade with an emphasis on monitoring and evaluation. To this effect, it was decided that the Creditor Reporting System (CRS) of the OECD would be used as a basis to give a global picture of Aid for Trade flows. Donor countries were requested to self-assess their trade-related development activities. Most importantly, recipient countries were asked to report whether their Aid for Trade needs were met. To start the process of annual review, the WTO co-organised with the Regional Development Banks three Regional Reviews in Africa, Asia and Latin America. These reviews provided a platform to raise awareness, share information and create incentives amongst stakeholders to implement Aid for Trade. The results of the regional approach were discussed at a Global Review held by the WTO on 20-21 November 2007. Donors, including some non-traditional donors (e.g. Korea) confirmed their commitments. Some areas of discrepancy on monitoring and evaluation were identified among stakeholders. These will be taken up at an Expert Symposium in spring/summer 2008. The importance of the regional dimension of Aid for Trade was recognised and a meeting will take stock of related developments in autumn 2008.
2008 will provide the opportunity to assess progress so far on AFT, and to take the next steps to implement the initiative. The Aid for Trade Roadmap for 2008 was presented by Director General (DG) Lamy at the Committee on Trade and Development (CTD) of the WTO on 25 February 2008. The Roadmap calls among other issues for fine-tuning the self-assessment questionnaires of the WTO/OECD. Other key achievements expected in 2008 are the identification of performance indicators for AFT, national and sub-regional AFT reviews, as well as the establishment of regional AFT networks. DG Lamy reiterated the importance of using existing mechanisms, such as the enhanced IF and the Standards and Trade Development Facility (STDF), to make AFT successful. Finally, he emphasised that one of the crucial challenges in implementing AFT in 2008 was to find a creative response to meet non-LDCs AFT needs.
A number of meetings organised by stakeholders, including AITIC, will be held throughout the year to meet the recommendations of the AFT Roadmap, to discuss ways and means to keep up the momentum, and to take stock of the progress. AFT Reviews will be organised at the national and sub-regional levels, in selected countries to assess AFT plans, to identify key priorities, and to agree on how these plans and priorities should be implemented. The second AFT Global Review is scheduled to take place in spring/summer 2009.
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