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The financial architecture of aid for trade

Research reports

Written by Dirk Willem te Velde, Massimiliano Cali, Sheila Page

In December 2005, the WTO included in its Ministerial Declaration at Hong Kong a commitment to take actions encourage a new initiative on Aid for Trade. This explicit recognition of a WTO interest in and responsibility for aid has raised high expectations, but there is still little agreement on what Aid for Trade is: what resources it could offer and for what purposes. Groups like the Africa Group must now define what they need, and how this can be efficiently and equitably implemented. This report reviews what meanings that would be useful from a trade point of view might be given to Aid for Trade (A4T), and some of the aid general principles which any scheme should take into account. It reviews some existing programmes that provide aid for trade or trade-related purposes, and some other programmes for specific objectives, first in order to identify what is being done, but also to identify some good (and bad) examples for designing an Aid for Trade initiative. Th report presents some possible options, taking into account the different types of need identified (both closely related to WTO issues and general trade), the different timing of needs (adjustment to specific changes in the trading system and long-term development), and the different principles which tend to guide the aid and trade discourses. It also summarises the increases in aid commitments, and of designation for trade within them, that have been recorded in the last year.

Sheila Page, Lauren Phillips, Massimiliano Calì, Dirk Willem te Velde and Sven Grimm