I. Introduction

1. Potentially large sums of money are being promised for the broad Aid for Trade initiative to underpin a final Doha negotiations’ package. There is some concern that the motivations for Aid for Trade may be mixed: as much an attempt to compensate perceptions of loss, as to reinforce good market access results in the Doha negotiations. Yet, the possible benefits of a well-conceived Aid for Trade effort are not to be dismissed. Least-developed countries (LDCs), small economies, land-locked developing countries (LLDCs) – indeed, any developing country struggling to take advantage of trading opportunities and become competitive – could gain much.

2. The debate on Aid for Trade is taking place in diverse fora. The task forces on Aid for Trade and the Integrated Framework (IF) are important. But it is largely the international financial institutions (IFIs) – notably the World Bank and International Monetary Fund (IMF), mostly within the framework of the Development Committee – that will make most of the strategic decisions. Small delegations need to watch the process carefully and seek to participate in a manner that will maximise the potential of this initiative to their own trade interests. After all, it is at the most disadvantaged WTO members that Aid for Trade is aimed.

3. What follows seeks to contribute to fine-tuning the debate on Aid for Trade in the context of the WTO, tracing back how Aid for Trade has emerged as an initiative that has been vigorously pursued in the trade and development communities. It also aims at clarifying a confusing web of proposals by examining their constituent elements and by considering the initiatives put forward by the different stakeholders on the most pressing issues in the debate. How much additional finance will be devoted to Aid for Trade? How do the new Aid for Trade pledges fit in the wider Monterrey Consensus on Financing for Development context? What will Aid for Trade cover? Who will be the potential recipients? What are the mechanisms through which it will be disbursed; new or existing ones? In this cacophony, coherence emerges, as a major concern illustrating the central challenges faced by both donors, institutional and bilateral, and the recipients of Aid for Trade.

II. The Hong Kong Mandate, the Hong Kong Promises

4. Paragraph 57 of the Hong Kong Ministerial Declaration, headed “Aid for Trade”, reads:

  “We welcome the discussions of Finance and Development Ministers in various fora, including the Development Committee of the World Bank and IMF, that have taken place this year on expanding Aid for Trade. Aid for Trade should aim to help developing countries, particularly LDCs, to build the supply-side capacity and trade-related infrastructure that they need to assist them to implement and benefit from WTO Agreements and more broadly to expand their trade. Aid for Trade cannot be a substitute for the development benefits that will result from a successful conclusion to the DDA, particularly on market access. However, it can be a valuable complement to the DDA. We invite the Director-General to create a task force that shall provide recommendations on how to operationalize Aid for Trade. The Task Force will provide recommendations to the General Council by July 2006 on how Aid for Trade might contribute most effectively to the development dimension of the DDA. We also invite the Director-General to consult with Members as well as with the IMF and World Bank, relevant international organisations and the regional development banks with a view to reporting to the General Council on appropriate mechanisms to secure additional financial resources for Aid for Trade, where appropriate through grants and concessional loans.”

5. Although apparently free-standing, the Aid for Trade mandate will, in practice, be enmeshed with those on the Integrated Framework (Paras. 48-51); Trade Facilitation (Para. 33 and Annex E); Small Economies (Para. 41); LDCs (Para. 47); Technical Cooperation (Paras. 52-54) and Coherence (Para 56).

6. The Declaration goes to some lengths to stress that additional market access is the key to a positive development outcome in the Doha negotiations. However, it is inescapable that Aid for Trade is intended, in part, to provide benefits to many participants in the Doha negotiations who will see little of immediate value and even short-term loss through preference erosion or reduced tariffs – in whatever market access package emerges. This may be viewed as cynical on the part of those pressing Aid for Trade. On the other hand, it is self-evident that market access means little in the absence of adequate trade infrastructure and supply-side capacity. Thus, Aid for Trade should be taken seriously by the weakest players in the trading system; in principle, it may be a rare opportunity to press forward development objectives at a very practical level.

7. A number of Members made public announcements prior to and during the Hong Kong meeting of their financial commitments to Aid for Trade. The three biggest players made seemingly very large pledges. The EU and its member states announced that their spending on trade-related projects would reach € 2 billion ($2.4 billion) a year by 2010 [note 1]. The US said it intended to reach $2.7 billion a year in Aid for Trade grants by 2010. Japan went even further by committing itself to spend $10 billion over three years. Quite how much new money these commitments represent – as distinct from funds diverted from other aid programmes and creative accounting – and over which time frame they will be disbursed remains unclear [note 2].

III. Aid for Trade: How Much?

8. The Hong Kong promises came to round up earlier decisions taken at the meetings of the G8 (in Gleneagles in July 2005) and of the G7 Finance Ministers (in London in early December 2005) to substantially increase ODA volumes. The centre of aid attention at both summits was doubling the aid for Africa. Subsequent to the G7 stated expectation to raise (narrowly-defined) Aid for Trade to $4 billion a year, both the G7 and the G8 called on the IMF and the World Bank to submit proposals for additional assistance to developing countries to develop their capacity to trade and to “ease adjustment in their economies so they can increase their capacity to take advantage of more open markets” [note 3], in particular for LDCs in Africa. The IFIs responded to this call by issuing a paper presented to the Development Committee at the 2005 Spring Meetings [note 4].

9. The OECD defines three “categories” of Aid for Trade. Category 1 includes the traditional agenda of trade-related technical assistance (TRTA) and capacity building – limited effectively to trade policy and regulation, trade-related institution-building and small-scale trade development. It amounted to $2.2 billion in 2004 [note 5]. Category 2 expands coverage to include trade-related infrastructure (transport, ports, energy, telecommunications etc.) and broader supply side capacity building and reached $9.3 billion in 2003 [note 6]. Category 3 moves the envelope outwards to include additional assistance to expand production capacity and boost competitiveness in specific sectors and is expected to reach $33.7 billion by 2010 if the share of official development assistance (ODA) remains constant.

10. These figures seem impressive, yet none of them include provision for meeting adjustment costs from the Doha negotiations or from autonomous trade liberalisation. In fact, the debate on Aid for Trade that followed the G7 and G8 call has not yet produced consensus on whether adjustment costs should be part of the additional Aid for Trade package (see section VIII below). So striking are the potential financial implications of increasing Aid for Trade, that the OECD Secretariat has called for policy makers to make clear decisions on the definitions of its components.

11. Other fundamental consequences of scaling up Aid for Trade would need to be considered so as not to jeopardise aid effectiveness. Perhaps the most important are: the capacity of many small and poor countries to absorb such spending; and the ability of the donor community, the WTO and the IFIs to manage the flows effectively and coherently. Subject of intense discussions will probably be whether all additional financing is on grant terms or will, in part, be concessionary loans.

IV. Moving Aid for Trade Forward

12. The Director-General (DG) has established the task force on Aid for Trade from among the WTO membership. His initially proposed composition, announced at the February 2006 meeting of the General Council, included eleven members: Barbados, Brazil, Canada, China, the European Communities, Japan, India, the United States and the coordinators of the African, Caribbean and Pacific Group of States (ACP), the African Group and the LDC Group. However, several WTO members pressed for a more diverse representation in the task force, “particularly Latin American economies – that argued that the initial composition of the task force did not properly represent the interest of ‘middle-sized’ economies and that there was an over-representation of preference-dependent countries, reflecting political rather than economic considerations” [note 7]. Thus, in the light of these considerations, the DG invited Colombia and Thailand to join the task force, chaired by Ambassador Mia Horn Af Rantzien, of Sweden, in a personal capacity. Other international organisations have an advisory role.

13. In principle, the task force will advise on how to “operationalise” Aid for Trade. In reality, this will supplement high-level consultations between the IFIs and the WTO, as well as with other institutions (such as, UN agencies and regional development banks). This means establishing a degree of coordination and cooperation between the major agencies that is not always apparent, even if the “coherence” agenda has been advanced significantly in recent years [note 8]. The major agencies are, as required by the Hong Kong mandate, already consulting on the “appropriate mechanisms” to secure additional resources. A questionnaire was sent to different agencies to give their views on Aid for Trade activities, needs, priorities, “delivery mechanisms”, monitoring end evaluation, role of the private sector and important gaps in the provision of Aid for Trade. By end of April 2006, most of the agencies had responded.

14. Oddly, when Aid for Trade is mentioned in an official document, it is usually linked to the IF, or the enhanced IF. This association of Aid for Trade with the IF adds to the confusion in the debate given that the IF is meant, at least at present, exclusively for the LDCs whilst Aid for Trade would also cover other developing countries. Second, considering actual ($35 million) or future funding for the IF (between $100-400 pledged), the millions pale when compared with the billions, actual or pledged, for Aid for Trade. Surprisingly, the IF, which was on the verge of disappearing after the first evaluation [note 9] in 2000, made a glorious comeback. With a view to enhancing country ownership and efficiency, it was revamped, by providing it with, inter alia, a new governance structure, and the creation of the Integrated Framework Trust Fund (IFTF) to finance IF projects aiming to integrate trade-related policies into LDCs’ national development plans. Not surprisingly, the IF is now being considered as a possible mechanism for disbursing Aid for Trade additional funds. In fact, in this respect, the enhanced IF and Aid for Trade are treading a tangled road, where they converge and diverge. Although two independent task forces were set up to implement scaled-up Aid for Trade and enhanced IF, the lines between them often become blurred. In its present shape, the IF is a mechanism for relatively small projects and does not include infrastructure or supply-side components. The question left unanswered as yet is: will Aid for Trade for LDCs be disbursed within the IF or through the creation of new mechanisms?

V. The Integrated Framework: the Vehicle for Aid for Trade?

15. The Integrated Framework (IF) Task Force - comprising LDC and donor representatives - is due to report in April on its proposals for an “enhanced IF” (see paragraphs 16 and 17 below). In May 2006, the WTO General Council will discuss a report from the DG on “additional resources” for Aid for Trade and it is expected to consider the Aid for Trade task force’s recommendations in July. Further intensive consultations among the IFIs, regional development banks and bilateral donors will be necessary, if the final Aid for Trade package and the enhanced IF are to become operational by the end of 2006, when the Doha negotiations are supposed to conclude. With or without such a conclusion, some aspects of the Aid for Trade package (as well as the enhanced IF) are independent of the results of the Doha negotiations and could, presumably, be implemented within this timeframe.

16.The IF has become the instrument for the delivery of higher levels of TRTA to LDCs and it has become commonplace to think of the IF [note 10] as the focal mechanism for allocating the funds generated by Aid for Trade. Ministers at Hong Kong [note 11] confirmed three main elements of the IF task force’s mandate to secure IF enhancement: increased and predictable financial resources on a “multi-year basis”; strengthened capacities within beneficiary countries to implement, manage and monitor IF programmes; and better IF governance. Ministers called for more effective follow-up to national diagnostic trade integration studies (DTIS) and more effective coordination among IF stakeholders and donors.

17. The IF Task Force is not the only influence on an enhanced IF. In a September 2005 paper [note 12] for the Development Committee of the World Bank and IMF, the staffs of the two institutions put forward their own ideas. They considered that financial resources for an enhanced IF would need to be raised in the order of $200-400 million over an initial 5-year period. That would represent an unprecedented increase in IF monies as, by the end of 2005, pledges to the IF Trust Fund amounted to $35 million. Furthermore, the paper stressed the need for governance reforms of the IF with a review after 3 years and set out concepts for in-country strengthening.

18. Their paper also raised the difficult issue of eligibility, suggesting that the IF be opened up to some of the poorer countries outside the LDC group. By adding the IDA-only [note 13] countries to the LDC group a total of 81 nations would become eligible. The LDC Group has strongly objected to this approach, seeing it as a dilution of IF benefits. It seems to have secured support from the IF task force on this matter. The IMF/World Bank staffs responded to these concerns with a proposal that a separate window be created for non-LDC funding. This suggestion was not accepted by the IF task force [note 14]. A further IF window is also contemplated to cope with diagnostics of cross-country and regional impediments to trade development as well as a new dedicated fund for regional project co-financing [note 15].

VI. Trade-related Infrastructure / Supply-Side Constraints

19. Will the scaling up of Aid for Trade require new arrangements for coping with larger projects aimed at improving trade infrastructure in the form of new funds? The Hong Kong declaration on Aid for Trade stresses supply side-capacity as well as trade-related infrastructure. The first problem in answering this is defining “trade-related infrastructure” and “supply side constraints”. There is no official classification of what projects would qualify for funds under these categories.

20. The LDC group has called for the establishment of a new multilateral fund for addressing their infrastructure and supply-side constraints [note 16]. The idea of extending the existing IF window to cover supply-side constraints was also supported in a World Bank-IMF report in the September 2005 paper. Subsequently, two Ambassadors to the WTO, Valentine Rugwabiza of Rwanda and Mia Horn af Rantzien of Sweden, were requested to coordinate a Geneva-based process to facilitate consultations on “building understanding for proposals for IF and Aid for Trade”. The result of the Geneva consultation process was a non-paper [note 17] which focused on the IF as the principal vehicle for delivering increased Aid for Trade and went a stage further towards creating an enhanced IF.

21. The non-paper identifies three pillars of Aid for Trade: (i) an enhanced IF; (ii) the creation of a new multilateral fund; and (iii) a separate window for adjustment to trade liberalisation. An enhanced IF would include DTIS on supply-side needs and the new fund under the second pillar would provide the adequate means of response. In the past, there has been substantial frustration among IF recipients that donor follow-up on supply-side priorities has been insufficient and unpredictable.

22. The proposed mechanism was a multilateral fund that would not replace bilateral funding but donors would be encouraged to contribute resources that would be allocated on a project basis or as support to trade-related programmes. As the paper stated, the overall objective of the fund would be to “provide additional, predictable and dedicated resources” for those supply-side constraint priorities not being addressed by the IF Trust Fund or bilateral donors. It could facilitate co-financing of projects with the six IF agencies. As examples, the paper put forward the following:

▪ Customs – computerisation, improvement of transit
▪ Ports – streamlining of port operations, increasing storage capacity, dredging
▪ Transport – rural road networks, corridor road maintenance, railways, intermodal terminals
▪ Standards – equipment, surveillance and international accreditation
▪ Sectoral support – product development, supply chain upgrading, market infrastructure
▪ Energy – rural electrification
▪ Creation of national or regional regulatory authorities in liberalised sectors
▪ Finance – export finance and working capital for smaller firms
▪ Development of export processing zones

23. The IF Task Force appears to be taking a somewhat different position. It may propose a modest fund, or window – perhaps of the order of $200 million over 5 years – which would serve to “seed” IF infrastructure projects. In other words, the IF might cover the initial project planning/development on the basis of which project funding would be sought from bilateral donors or IFIs.

24. The OECD notes one possible definition of supply-side capacity as “the capacity to produce goods and services competitively and the ability to get them to markets at a reasonable cost”. Another approach would be: “economic responsiveness to trade opportunities”. Either way, trade facilitation will clearly play an important role.

VII. Trade Facilitation

25. The extent and manner in which implementation of a trade facilitation (TF) agreement emerging from the Doha negotiations will be supported through one aspect or another of Aid for Trade is also far from clear. The cost implications are unknown for the time being, since too many elements of an agreement are uncertain. The Hong Kong Ministerial Declaration (Annex E) insists on the identification of individual Member’s needs and priorities. Current informal estimates suggest a $50-100 million range. This probably covers only the IT and administrative reforms likely to be required. It would be easy to generate much higher figures by factoring in more substantial aspects of TF-related reform and investment; not least, the costs of reforming customs services themselves and providing their personnel with reasonable employment conditions. Port infrastructure closely tied to TF raises the potential costs much further still. World Bank lending for TF projects reached $1 billion for the financial years 2004-2006.

26. Developing countries have reasonably been insisting on an absolute commitment from WTO Members to provide the necessary TRTA and capacity-building prior to committing themselves to any TF obligations [note 18]. Moreover, once a TF agreement is in place, further TRTA would be necessary to facilitate implementation. Indeed, it is proposed that a member’s obligations to implement – and therefore any application of the Dispute Settlement Understanding (DSU) for failure to do so – may well be tied directly to the availability of adequate financial support.

27. For the moment, there appears to be unwillingness among the major donors to create a special multilateral fund for financing TF implementation. The US, EU and Japan are all believed to prefer to work through bilateral channels. While they recognise that extensive TRTA and capacity-building will be unavoidable, they dislike creating a precedent for a binding, contractual right to such aid.

VIII. Trade Adjustment

28. Within the Aid for Trade umbrella there is pressure to broaden existing measures for trade adjustment compensation. For many WTO members participating in the Doha negotiations, this means an appropriate and adequate response to preference erosion as most-favoured-nation (MFN) tariffs in major preferential markets fall through agricultural and non-agricultural market access (NAMA) commitments. Add the problem of loss of revenue through tariff cuts in developing countries whose national budgets are highly dependent on such revenues. This, of course, tends to assume that the impact of the Doha package will be to reduce applied tariffs as well as bound tariffs and that commitments will be made despite the lack of any obligation to do so for LDCs. Further, there is the position of the net food-importing developing countries which, in principle, may lose as subsidised food supplies dry up, and prices increase, with the ending of export subsidies and other forms of export support.

29. Though the G7 and G8 mandate to the IFIs was to explore “new mechanisms” with a view to facilitating adjustment, the September 2005 paper by the staffs of the World Bank and the IMF essentially rejected any new multilateral fund for adjustment. On the other hand, the paper sees merit in examining new structures on cross-country and regional Aid for Trade as a follow-up to trade-related infrastructure and priorities identified in the DTIS.

30. The reluctance to contemplate new funds for adjustment stems from the fact that in April 2004, the IMF introduced the Trade Integration Mechanism (TIM) to provide assurance of support to countries that may experience balance-of-payments (BOP) shortfalls resulting from multilateral trade liberalisation. TIM provides no new financial facilities but seeks to provide predictability of support – through existing mechanisms – for the impact of liberalisation in other countries. Thus, preference erosion is covered as is the removal of textiles quotas and cuts in agricultural subsidies. So far, only Bangladesh and the Dominican Republic have sought and received support under TIM.

31. It should be noted that IMF research suggests that BOP shortfalls of this kind will not be large [note 19] – including with respect to lost preference advantages. The impact of the Uruguay Round Agreement on Agriculture on net food-importing developing countries was not significant – food prices did not rise as predicted. Nevertheless, the World Bank has the means to mitigate such shocks if they emerge as a result of the Doha Round. As for the impact of lost tariff revenues through domestic liberalisation, this could be offset through IMF programmes.

32. Since these various mechanisms are already in existence, there has been little support from the staffs of the IMF and World Bank for any new, dedicated fund to address problems arising specifically from Doha-led liberalisation. Their recommendation to the Development Committee was merely to strengthen the framework for assessing adjustment needs so that existing mechanisms can be better utilised. Nevertheless, a strong view exists in Geneva that a dedicated mechanism would improve the current negotiating dynamics. The summer 2005 consultations on Aid for Trade backed that view. The report of the consultations noted, however, that the issue of compensation for lost preferences was essentially a bilateral one – between preference providers and preference beneficiaries – and that the concept of an adjustment fund could be considered in that context.

IX. Private Sector Involvement

33. Most of what has been discussed above concerns government administration, public institutions and public/national infrastructure. Yet private firms in developing countries face many handicaps in the way they invest, trade and seek to meet their ambitions to integrate successfully into regional or global markets. Supply-side capacity as it relates to individual productive sectors or firms is seldom discussed in the WTO.

34. The International Trade Centre (ITC) works directly with developing country firms and trade associations. The World Bank and regional development banks also seek to involve the private sector services providers, manufacturers and agricultural producers with support they need to develop. Even if the Doha negotiations generate new trading opportunities, few developing country firms will rise to the possibilities without boosting their capacity to compete.

35. This reality needs to be factored more directly into the Aid for Trade debate. IFIs and other multilateral agencies, as well as non-governmental organisations (NGOs), have inadequate capacity in leading-edge business know-how. This may be where the private sector in developed countries can make a contribution. Many large firms already do so – notably in the trade facilitation area and in assisting private sector development in their local supply chains. The possibility that they can do more should probably be part of the Aid for Trade discussion.

X. Summary and Conclusions: Trying to Steady the Target

36. Aid for Trade has become a new mantra of the trade and development communities. Hailed as one of the answers to lift countries out of poverty (in tandem with the results of the Doha negotiations, particularly those on market access), expectations are high. The differing positions among bilateral donors, IFIs and the trade community – not to mention those in Washington D.C. and Geneva – relate to what use will be given to the additional funds earmarked for Aid for Trade. The dissonance seems to extend to the basics.

37. Coverage. What sectors? According to the WTO Ministerial Declaration, it should address concrete matters, such as building supply-side capacity and trade-related infrastructure to expand potential recipients’ trade but also to implement and benefit from WTO Agreements. The IFIs have made clear that trade-related infrastructure should be regional. There is no universal agreement on whether it should extend to tackling supply-side constraints and improving competitiveness. The G7 and the G8 would consider adjustment as one of the aims of additional Aid for Trade, while the OECD does not include adjustment at all in its present Aid for Trade coverage. The Geneva Consultation Process, the LDCs and the ACP countries call for a separate window for adjustment to MFN liberalisation.

38. Eligibility. What countries? The Hong Kong Ministerial Declaration includes developing countries and in particular LDCs. Which developing countries should be considered as potential recipients? Should the additional resources for Aid for Trade be extended to middle-sized developing countries and small and vulnerable economies? The IFIs have suggested the LDCs and all IDA-only countries, as they focus mostly on channelling additional funds through the enhanced IF or an IF-like mechanism. However, the participation in the task force of two middle-sized, middle-income developing countries widens the range of possible recipients.

39. Operationalisation. Closely tied to eligibility is the operationalisation issue. The specific discussions (in particular the papers by the IFIs, as well as the non-paper produced by the Geneva Process) on the scaling up of Aid for Trade inevitably lead to the consideration of the enhanced IF as a mechanism for allocating additional Aid for Trade funds. Although the WTO and the recommendations of the IFIs treat Aid for Trade and the enhanced IF as two separate issues, the discussion focuses exclusively on the IF. Will the additional Aid for Trade for developing countries (if they are indeed considered eligible) be funnelled through a mechanism resembling the IF or will the IF itself be enlarged to cover not only LDCs (and IDA-only countries in a previous World Bank-IMF proposal) but also other developing countries? On the creation of a new adjustment facility, the IFIs have “serious misgivings” about such a mechanism, whereas bilateral donors and potential recipients have called for the establishment of a new fund.

40. How much and how tied? As noted above, the size of the additional funding is not clear, nor are the conditionalities that would be attached. Annex F of the Hong Kong Declaration emphasises the need for coherence between donor conditionalities and WTO obligations.

41. Given the lack of clarity on these fundamental questions, there may well be reason for scepticism about the motivations for the Aid for Trade initiative in parallel with (or within) the Doha negotiations. Clearly, part of the motivation is towards a “buying off” of participants who believe they will only lose from broad trade liberalisation results in agriculture, services or industrial goods. There may also be an element of inducement to encourage greater efforts towards liberalising commitments by developing countries that may otherwise seek the shelter of special and differential treatment.

42. Whatever the motivation – and accepting the premise that the biggest benefits for many developing countries will come from ambitious market access results in the Doha Work Programme – Aid for Trade is best not dismissed as a cynical device. LDCs, small economies, LLDCs and many other members stand to benefit if a better framework of TRTA, capacity-building and supply-side support emerges in parallel with – or as a condition for implementation of – the final Doha package. A substantial commitment to support capacity to implement trade facilitation obligations, even prior to reaching an agreement and following-up on the implementation phase, could be of major significance. Many countries could benefit from increased assistance in developing medium, and large-scale trade-related infrastructure.

43. The political will of the major players to deliver on their Hong Kong promises will need to be tested. The conditions attached to enhanced trade-related aid will have to be carefully watched. The means of delivery – and the coordination among agencies – is a concern. Effectiveness of Aid for Trade has become a major consideration. The Paris Declaration on Aid Effectiveness provides agreed guidelines and indicators [note 20]. It may be that WTO members will be required to exert sufficient political pressure to ensure that the package that emerges is appropriate to their own perceived requirements and not merely a product of thinking within the IFIs.

44. A debate as lively and inclusive as possible over the coming months – as the IF and Aid for Trade task forces reach their conclusions – is the best means of ensuring that Aid for Trade delivers something of significant and lasting value.

Acronyms

AID FOR TRADE: A CHRONOLOGY

FORTHCOMING TIMELINES

Note 1: The EU’s Hong Kong announcement was that the new commitments on trade-related assistance from the European Commission would increase from € 800 million to €1 billion per year for the 2007-2013 period. In addition, EU member states committed to ensure that trade-related technical assistance would reach €1 billion by 2010. So, the total EU contribution for Aid for Trade “should reach €2 billion by 2010”. This was said to exclude infrastructure development funding. See Aid for Trade : Remarks by Commissioner Mandelson at the IMF/World Bank Panel Discussion, Hong Kong, 13 December 2005. (return to text)

Note 2: An illustration of the lack of clarity on the amounts pledged at Hong Kong: at the G8 Summit, Japan announced its intention to increase its ODA volume by $10 billion “in aggregate” over the next five years; to double its ODA to Africa over the next three years; and launched two initiatives: one on Health and Development and another on Enhanced Private Sector Assistance worth $5 and $1 billion respectively (the latter in partnership with the African Development Bank). So, are the $10 billion to be disbursed (over the next three years) pledged at Hong Kong over and above the funds pledged at Gleneagles, or has there been a recalibration of the ODA package announced by Japan at the G8? (return to text)

Note 3: See Gleneagles Communiqué, G8 paragraph 22 (a). (return to text)

Note 4: See Aid for Trade:Competitiveness and Adjustment, Joint Note by the Staffs of the IMF and the World Bank, 12 April 2005. (return to text)

Note 5: See 2005 Joint WTO / OECD Report on Trade-Related Technical Assistance and Capacity Building, OECD, December 2005, p. 5. (return to text)

Note 6: See Special DAC Meeting on Aid for Trade, Background Note, OECD, October 2005. (return to text)

Note 7: See Trade Progress Report: The Doha Development Agenda and Aid for Trade: Hong Kong and Beyond, World Bank, Development Committee DC2006-0005, 7 April 2006, p. 19. (return to text)

Note 8: A dialogue in the framework of a Special High-level Meeting of the Economic and Social Council with the Bretton Woods institutions, the World Trade Organization and the United Nations Conference on Trade and Development on "Coherence, coordination and cooperation in the context of the implementation of the Monterrey Consensus and the 2005 World Summit Outcome " took place on 24 April 2006. (return to text)

Note 9: See Review of the Integrated Framework for Technical Assistance for Trade Development of Least-Developed Countries, WTO, WT/LDC/SWG/IF/1, 29 June 2000. (return to text)

Note 10: The IF for Trade-Related Technical Assistance to LDCs is a multi-agency, multi-donor program that assists the least-developed countries to expand their participation in the global economy. Currently, 40 LDCs are at one stage or another in developing and implementing IF programmes. Established on the basis of the Plan of Action for LDCs launched in 1996, by the WTO Ministerial Conference in Singapore, the IF brings together the following agencies: WTO, IMF, World Bank, UNDP, UNCTAD and the International Trade Centre (ITC). One key objective is to “mainstream” trade in poverty alleviation and national development plans; notably through the poverty reduction strategy papers (PRSP) system. Another is to deliver coordinated trade-related technical assistance based on needs identified by the countries themselves. The IF is financed by the Integrated Framework Trust Fund through two windows: Window I, a general fund for contributions to diagnostic studies and strengthening IF national structures, and Window II for contributions allocated to specific programmes for trade capacity-building. At the end of 2005, the Trust Fund had pledges of around $35 million. (return to text)

Note 11: See Paras 48-51 of the Ministerial Declaration. (return to text)

Note 12: See Doha Development Agenda and Aid for Trade, IMF and World Bank staff paper to the Development Committee, DC2005-0016, September 12, 2005. At its meeting in London on 4-5 February 2005, the G7 called on the IFIs to develop proposals for additional assistance to countries to take advantage of more open markets. (return to text)

Note 13: Very poor countries (GDP per capita below $875) to which the International Development Association (IDA) of the World Bank can provide highly preferential loans. (return to text)

Note 14: See DC2006-005, p. 17. (return to text)

Note 15: For instance as a means of dealing with the creation of regional standards bodies, regional transport infrastructure, including access to ports for land-locked countries and regulatory frameworks to support liberalisation of essential services like electricity or telecommunications. (return to text)

Note 16: In addition, the LDCs have called for an “Adjustment Facility” and support for their “debt overhang”. (return to text)

Note 17: See Aid for Trade Initiative – Options to Enhance Support, Non-Paper, 20 July 2005. (return to text)

Note 18: In a communication by a group of Latin American countries on special and differential treatment on trade facilitation, a four-stage mechanism to be applied once the negotiations are over and the specific commitments are defined is proposed. The stages are: (i) self-evaluation of capacities; (ii) notification; (iii) capacity development; (iv) verification of attainment of capacities and implementation of commitments. See Communication from Chile, Ecuador, Guatemala, Honduras, México, Nicaragua, Paraguay, República Dominicana and Uruguay , WTO, TN/TF/W/81,3 April 2006. (return to text)

Note 19: Interestingly, recent research suggests that preference-receiving countries pay higher tariffs than developed countries in products where the preference-receiving ones have a comparative advantage. See Mary Amiti and John Romalis, Will the Doha Round Lead to Preference Erosion?, IMF Working Paper WP/06/10. (return to text)

Note 20: Paris Declaration on Aid Effectiveness, Ownership, Harmonisation Alignment, Results and Mutual Accountability, High Level Forum, Paris, 28 February – 2 March 2005. (return to text)