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To access Aid for Trade, developing countries must clearly
prioritize their needs. In return, their development partners need
to provide trade-related assistance and capacity building to meet
the demand with a supply of resources. To bridge the gap between
demand and supply as effectively as possible, developing countries
need to mainstream their demand for Aid for Trade into their
national development strategies, such as the Poverty Reduction
Strategy Papers (PRSPs), since these form the platform on which
donors base their aid planning.
For the least-developed countries (LDCs), the Enhanced Integrated
Framework (EIF) is helping to bridge the gap between demand and
supply for Aid for Trade and to mainstream trade into national
development plans.
The EIF is the main mechanism through which LDCs access additional
Aid for Trade resources. The EIF provides a procedure for:
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clearly mapping out and prioritizing key needs for trade-related
assistance and capacity building, including trade infrastructure,
supply and productive capacity
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submitting these demands to the donor community of each country for
accessing funding beyond the resources available in the Framework's
own Trust Fund.
LDCs can channel their demand for Aid for Trade through the EIF
process (involving Diagnostic Trade Integration Studies). The supply
of resources is coordinated through local EIF institutions, such as
the EIF Focal Point, the National Implementation Unit and the Donor
Facilitator.
Predictable, sustainable and effective financing is fundamental for
fulfilling the Aid for Trade mandate. The EIF process not only
assists LDCs in mainstreaming trade into their national development
strategies but also provides LDCs with the platform for leveraging
additional funding from their development partners. This allows them
to translate their trade-related needs into funded and deliverable
projects.
The EIF's Trust Fund is not sufficient on its own to fund many of
the activities that LDCs need to boost their trade capacity.
Additional funds sought through the EIF process over and above the
EIF Trust Fund represent a significant proportion of Aid for Trade.
The EIF therefore forms a key pillar within the much larger edifice
of Aid for Trade.
Tier 1 of the EIF Trust Fund provides funding to strengthen LDCs'
capacity to manage the benefits of Aid for Trade. This funding helps
to incorporate trade into national development plans and to
translate trade priorities into bankable projects for broader Aid
for Trade funding.
The Trust Fund also supports the implementation of some of the
activities identified as priorities, taking into account the
availability of alternative funding and the quality of the projects.
Tier 2 of the Trust Fund provides bridging funding to “jump start”
activities through:
However, for most activities identified through the EIF, resources
for implementation have to be mobilized from other sources beyond
the EIF Trust Fund. These resources can be channelled through a
variety of means, depending on the donor's specific practices.
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