Aid for Trade: a New Issue in the WTO

Working and discussion papers
January 2007
Sheila Page
The explicit recognition of a WTO interest in and responsibility for aid at its Sixth Ministerial Conference in Hong Kong raised high expectations that it would now be possible to ensure that no country lost from the Doha negotiations and that developing countries would receive the assistance that they needed to take advantage of any improved access to markets. But there was also concern because of disappointment at both the limited results of the technical assistance mentioned so frequently in the Uruguay Round Agreement and the failure of the Integrated Framework to guarantee that donors responded to identified needs. After considering the scope and mechanisms for Aid for Trade from March to July, and receiving submissions from both international organizations and WTO member countries, the WTO Aid for Trade Task Force3 submitted its recommendations to the WTO General Council of 27-28 July 2006 (perhaps the only Doha Round deadline which was met). The General Council took note of them, and considered them formally in October 2006.

Everyone could agree in principle that Aid for Trade is a good thing. The problem was to move to specific proposals that observe the principles of both aid and trade and that could obtain consensus from all WTO members and the support of a range of other institutions, including the international financial institutions, regional organizations, and non-trade elements of the governments of both donor and recipient countries. This paper will first review what types of aid would meet WTO-related needs, and the types needed more broadly to help countries use trade as part of their development strategies. Secondly, it will consider how to decide which needs and which countries or regions should receive Aid for Trade. It will then discuss how to apply some of the general principles for aid which any scheme should take into account. The final section will analyze what any Aid for Trade package should include, taking into account the different types of need identified, 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, and consider how the proposals made by the WTO Aid for Trade Task Force meet these requirements.

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