A Conference on Aid For Trade (AfT) was organized by UNCTAD and the Commonwealth Secretariat between 21-22 March 2006.
Conference participants discussed how the initiative could be used to address the key trade-related problems of developing countries, particularly LDCs, which hamper their effective participation in, and limit their benefits from, international trade, including those likely to arise from the outcome of the WTO Doha Trade Round.
Such problems include:
- the lack of competitive supply capacity to take advantage of the market access opportunities that would be offered in the Doha Round,
- underdeveloped or inadequate infrastructure, and
- the relatively high adjustment and implementation costs associated with trade reforms.
The conference helped to clarify concepts, definitions, issues and perceptions concerning AfT. But one strong, key message emerging from the conference was that aid for trade should ensure additional, adequate, secure, non-debt creating and predictablefunding for deeper-end trade capacity development, and should be channeled through a process that is demand-driven and owned by developing countries.
Among possible delivery mechanisms to provide AfT funding, a suggestion was made by Nobel Laureate Professor Joseph Stiglitz for a stand-alone Global Trade Facility (GTF). Also while there was agreement in general that AfT funding should be predictable,participants discussed — but did not reach a consensus on — the modalities for ensuring such predictability, including the notion of making it binding and enforceable within the WTO.
