Looking Ahead: Mobilizing Aid for Trade in LAC
requirements, country eligibility criteria). It is thus important not only to expand grant funding for trade assistance but also to improve the delivery and usefulness of that funding. In a context of limited resources for development finance, LAC’s main challenge is to prevent aid for trade from crowding out other forms of development assistance. Placing greater emphasis on non-concessional lending. Notwithstanding possible increases in grant funding, it will be important for LAC to analyze past experiences with particular lending instruments, and to bring non-concessional funding back into the discussions of aid for trade. Apart from a few countries that may indeed benefit from the revision of existing mechanisms aimed at LDCs and other low-income countries, LAC countries are mostly middle-income. It is therefore crucial that the debate on mobilizing aid for trade in LAC is matched by discussions of how to acquire non-concessional development and private-sector finance, and how to channel it into activities that favor the countries’ insertion into the global economy. Financing mechanisms for regional programs should be particularly high on the agenda of aid-for-trade discussions in LAC. 3.5. Monitoring Aid for Trade Creating an efficient monitoring structure. The difficulties involved in defining and measuring aid for trade include different definitions; different judgments about the boundaries of “traderelated” aid; the treatment of non-concessional funding; and the absence, to date, of a defined structure within which to collect data or identify areas to evaluate in recipient countries. The OECD process is well-suited to monitoring and evaluating what donors promise and what they do, and the OECD has experience in assessing how effective different donors are. But the organization’s peer review process is led by aid agencies and is subject to their expertise and priority judgments. Appraisal of the review’s findings by the WTO, in turn, will be based on specialized knowledge of trade, rather than broader development expertise. Building an effective partnership on this matter may take time and experience. Monitoring must be perceived as useful in order to generate useful results. Whatever process is chosen to collect data on and monitor aid for trade, countries will have to see value in it if they are to have an incentive to provide information. Individual donors and recipients will be more inclined to provide information if they can rely on all others to do the same. The Task Force recommended a broad collection of information from recipient countries, regions, donors, multilateral agencies and the private sector. It proposed that the information be used in the WTO’s annual review and in country assessments using the Trade Policy Review mechanism, for both donors and recipients. DAC members have pledged to provide information for the CRS database, but there is no process requiring donors or recipients to notify the WTO (the Task Force mentioned introducing this as a possibility). The WTO can request the information—including through the proposed questionnaires to recipients—and can seek to discover it through the Trade Policy Reviews, but there is no equivalent of the requirement to report tariffs or other trade measures. Mechanisms to strengthen accountability may be needed to improve the monitoring process.
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...