Revamping Aid for Trade for the Post-Bali WTO Agenda

Abstract

Developing countries’ requests for financial and technical assistance acquired a high profile during the Doha Round negotiations prompting the launch of the Aid for Trade Initiative. The Initiative succeeded in mobilising a large amount of financial resources. However, because the Doha Round talks stalled, these resources could not support the implementation of a multilateral agreement. Instead, they were spent on various projects, some not clearly related to trade. As a result, developing countries are increasingly questioning the additionality of aid for trade. To make matters worse, facing a fiscal crisis, donors are reducing their aid envelope and are requesting evidence that the money spent has had an impact. The future of the Aid for Trade Initiative and its capacity to support the post-Bali WTO Agenda will depend on its capacity to address these concerns. To do so, a change in approach is needed. In its Aid for Trade Work Programme 2012-13, the WTO answered the challenges by expanding its scope of the Initiative. Post-Bali, it should instead narrow the scope of the Initiative, in order to make it more focused and efficient.