The Way Forward
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rade-related infrastructure; T Building productive capacity; Trade-related adjustment; and Other trade-related needs
There are obvious problems with trying to draw up categories of ‘aid for trade’ since in practice it is difficult to draw a line between ‘aid for trade’ and ‘aid for development.’ ‘Aid for trade’ would be most useful if it is integrated into development programmes—both at the national and regional levels. Within this context, what may now be needed is a mechanism for integrating trade-related capacity building with the broader development issues of production, infrastructure and financial adjustment. Accordingly, discussion and agreement will be needed on the identification of ‘aid for trade’ components in country and regional programming exercises. The Task Force mentioned the importance of identifying regional needs, but its recommendations appeared to largely support a country-based approach: Projects and programmes should be considered as Aid for Trade if these activities have been identified as trade-related development priorities in the recipient country’s national development strategies. Some have argued that quite apart from national needs, ‘aid for trade’ is also required to fund international public goods such as multilateral trade liberalization. This supports the argument that ‘aid for trade’ should be used to help countries that have suffered from preference-erosion, an issue that has generated much controversy. International discussion and agreement is needed on the approach to ‘aid for trade.’ A Mechanism for Donor Coordination
The Task Force underlined the importance of donor coordination in facilitating ‘aid for trade’ as follows: Greater donor and agency coordination and harmonization of procedures—at both the local and global level—is critical. Trade-related programmes and projects should be more coherent, both in terms of operations and policy Donor harmonization is an issue that has been around for decades. In 2005, however, aid donors signed up to principles of ownership, alignment and harmonization through the Paris Declaration on Aid Effectiveness. The principle of harmonization requires donors to streamline and harmonise their policies. Such harmonization, however, has not taken place. Given the existing situation, it is perhaps incumbent on countries and regions themselves to set up mechanisms for coordinating donor efforts.
Published on Sep 14, 2007
this report was prepared by the integration and trade sector (int) as a contribution to the regional meeting on mobilizing aid for trade: la...