About Aid for Trade
Aid for Trade aims to help developing economies tackle trade-related obstacles, strengthen their capacity to trade and build the infrastructure they need to integrate into the international trading system. It is part of Official Development Assistance (ODA), comprising both grants and concessional loans. In 2022, Aid for Trade accounted for one-fifth of total ODA.
The OECD Creditor Reporting System (CRS) is the key source for monitoring Aid for Trade flows, using the following categories:
- economic infrastructure, which accounted for 54 per cent of total funding in 2022
- productive capacity building, 43.6 per cent;
- trade policy and regulation, 1.8 per cent, and
- trade-related adjustments less than 1 per cent of total flows.
Over 60 per cent of Aid for Trade is provided by bilateral donors, primarily countries that are members of the OECD Development Assistance Committee. The other 40 per cent is provided by multilateral donors, including the World Bank. Increasing efforts are being made to obtain information on South-South cooperation.
Lower middle-income countries are the main recipients of Aid for Trade, representing 38 per cent of total funding, followed by LDCs and low-income countries that account for 28 per cent of Aid for Trade disbursements in 2022. The main destinations for Aid for Trade are Africa and Asia, accounting for 34 and 36 per cent of financing flows in 2022, respectively.
The Aid for Trade initiative was launched at the 5th WTO Ministerial Conference in Hong Kong in 2005 to help developing economies benefit from market access opportunities offered by the multilateral trading system.
A Task Force set up in 2006 identified three main goals for the initiative:
- bolster supply-side capacity and trade-related infrastructure
- facilitate, implement and adjust to trade reform and liberalization
- support trade negotiations and assist in the implementation of WTO agreements.
Since 2006, the WTO has been working with the OECD to monitor Aid for Trade flows, with a view to scaling up support to address trade challenges of developing economies.
WTO members discuss Aid for Trade in the Committee on Trade and Development. This contributes to better understanding of the needs of developing economies, including LDCs, and how the international community can help.
Every two years, the WTO brings the international community together for a Global Review of Aid for Trade to take stock of the initiative's progress and to spotlight the evolving needs and priorities of developing economies, including LDCs.
The initiative contributes to the WTO's coherence mandate aimed at promoting greater cooperation on global economic policy making by working closely with the World Bank, the International Monetary Fund and other international organizations.