Aid for Trade (AfT) has emerged as an important issue in international trade negotiations. Although it is widely acknowledged that international trade can be a strong instrument to foster economic growth, poverty reduction and overall development, it is also observed that trade and trade liberalisation alone are not enough to achieve this, particularly in the case of least developing countries.

The limitations to profit from trade can be manifold: Very often, supply capacity is the determining bottleneck for export activities, hindering developing countries from fully benefiting from international trade. On the import side, they lack the capacity to adjust to new challenges from higher international competition and to compensate losers of trade liberalisation. These limitations, together with limited analytical and negotiation capacity hamper the willingness and ability of developing countries to fully engage in international trade and trade negotiations. Overall, lack of capacity is thus a major impediment for engagement of developing countries in international trade and in international trade negotiations, which is not only hampering their own development agendas but also the goals of the industrialised countries.

These insights have led to increasing demand from developing countries for AfT and for increasing willingness to respond to this demand from the industrialised countries. Particularly, the declarations and commitments in the frame of the World Trade Organisation (WTO) and the fact that AfT activities will be monitored by the Organisation for Economic Co-operation and Development (OECD) have given a strong push and credibility to the agenda. The EU in particular has committed itself to raise the level of AfT of the Commission and the member states jointly to 2 billion Euros per year, to be spent on two of the six categories of AfT defined by WTO/OECD. Though the translation into exact amounts of additional funds is not yet very clear, this commitment could give a strong backing to additional funds in the productive, export-oriented sectors and development portfolios of donors which in recent decades have lost ground against social sectors.

However, much remains to be done, and certain particularities of the AfT agenda have contributed to a lack of dynamism: the problematic division between trade and other economic domains, difficulties in defining, measuring and assuring additionality of the AfT commitments, the sector cross-cutting nature of AfT measures, and the problems of coordination and harmonisation among actors. Most donors are only starting to draw up AfT-strategies and incorporating AfT into their usually sector oriented agendas, and most recipients must yet incorporate AfT into their national and sector development plans. The roles of and labour division between national and international actors is often yet to be defined. Workshop on “Aid for Trade – From concepts to action”

Worskshop Agenda
The workshop combined two agendas which are a vital for good and realistic AfT programmes:

1. The AfT agenda, by collecting, discussing and bringing forward latest developments at the international and national level, in particular in Europe, and
2. Sector agendas, in particular those where German and other donor development assistance provides or can provide AfT (national and regional economic governance and development including sector budget support, agriculture, forest, fishery and other natural resource use, trade related standards, norms and labels, infrastructure, transport and energy) by raising awareness, collecting lessons learned and best practices, discussing and bringing forward where appropriate the mainstreaming of AfT in these sectors.

Both agendas were coupled, thereby on the one hand by

• confronting and enriching the international AfT agenda with sector oriented experiences, giving sector specialists the possibility to contribute to shaping realistic international and national AfT agendas, and on the other hand
• providing sector specialists with information on challenges and opportunities of the AfT agenda, giving them the possibility to take maximum advantage of this agenda while contributing to fulfilling the overall AfT commitments.

The workshop systematically brought together the perspectives of trade and sector specialists as well as of donor and recipient countries. It gave ample space to exchange and work in small groups to make maximum use of the experience gathered. Results were channelled into both the German and international AfT agenda processes.