Aid for Trade (AFT) has emerged from a shift in the development discourse on aid, trade and development.
It is accepted that development assistance specific to trade must accompany any trade reform effort for such reform to be meaningful and lasting in terms of its development impact on developing countries.
AFT for developing countries is an essential complement to trade liberalization in the international trading system so that trade can operate as an effective engine of growth, development and poverty reduction. AFT is thus aid for development – it is necessary both for building trade and productive capacities in developing countries so as to enable them to realize potential trade and welfare gains from trade liberalization, and for mitigating the associated costs of trade liberalization, whether multilateral, bilateral or unilateral.
The AFT initiative mandated by the Sixth World Trade Organization (WTO) Ministerial Conference -- elaborated further by the WTO Task Force on Aid for Trade and follow-up work in this regard -- provides an important platform for transforming the Aid for Trade commitments into action at the national, regional and international levels. Further, the Accra Accord of UNCTAD XII noted, "Increased and more effective Aid for Trade is needed to support all developing countries, in particular LDCs, to benefit from the rule-based international trading system."
Rajan Dhanjee, of UNCTAD's Division on International Trade in Goods and Services, and Commodities, addressed Geneva-based delegates on Aid for Trade and Development during the Short Course on Key International Economic Issues held in Geneva September 29, 2008.
The first part of the presentation covers key principles and issues relating to the demand for AFT, and areas of needs in developing countries.
The second part discussed the issues relating to the supply of Aid for Trade, and the role of UNCTAD and the United Nations in this regard.