The False Promise of Aid for Trade

Abstract

Aid for Trade (AfT) has gained prominence as an innovative form of donor support in the era of the ‘post’-Washington Consensus. Institutions such as the World Trade Organization (WTO), the US Agency for International Development (USAID), the European Commission, and the UK Department for International Development (DfID) have heralded AfT concessions as a means of creating a level economic playing field between industrialized nations and countries in the global South. Specifically, AfT mechanisms have been praised as a means of aligning trade liberalisation deals (whether in the Doha Round or within bilaterals) to poverty reduction objectives. Donor AfT assistance to low-income states’ trade capacity – including support to government ministries, private sector development, and local infrastructure – are understood to construct a more balanced global trade system conducive to the needs of ‘the poor’. This article, however, through critical analysis of AfT discourse within the ‘moral economies’ of multilateral WTO and bilateral EU-ACP (African, Caribbean and Pacific) negotiations, points to the strategic purposes of donor language in rationalizing asymmetric North-South trade systems. Moreover, it questions the ‘development’ credentials of AfT assistance, given its disbursement to strategically significant middle-income states in relation to Western overseas interventions, private sector activities that have dubious consequences for supposed beneficiaries, and the tying of AfT disbursements to the implementation of inappropriate policies.