Growth in contributions to Aid for Trade levelled off in 2014 from a year ago according to Frans Lammersen, of the Organisation for Economic Co-operation and Development (OECD). Support for energy generation and productive capacity building in developing countries continue to attract increased levels of funding but commitments for trade facilitation programmes and for least developed countries (LDCs) fell between 2013 and 2014, he said.
“I think we can be relatively confident that overall Aid-for-Trade flows will remain relatively stable,” Mr Lammersen said, noting that the aggregate aid commitments decreased by only 2% to USD 55 billion in 2014 and may have even slightly increased in 2015. Actual disbursements of total aid commitments, meanwhile, have seen continued growth every year of 5-10%.
Aid commitments for private sector development, in particular, rose in 2014 and this is likely to continue in light of the UN’s Sustainable Development Goals (SDGs) which encourage partnerships with the private sector, he added.
“But there is a decline in aid for trade policy and regulations in the commitments and to a lesser extent in the disbursements,” he said, with commitments for trade facilitation support dropping from USD 613 million in 2013 to USD 362 million in 2014. “That is a drop of 41%.”
Australia said this could be addressed by having aid recipients work with donors on identifying their Category C commitments under the Trade Facilitation Agreement — that is, the areas of trade facilitation where they will need capacity building and assistance. This way, donors know where to channel the aid.
Mr Lammersen pointed out that the share of Aid for Trade for LDCs had fallen and that the terms of support had become less accommodating, with 55% offered in the form of loans rather than grants. He noted, however, that LDCs receive the highest amount in terms of aid per capita.
Commenting on the report, the committee chair, Ambassador Christopher Onyanga Aparr (Uganda), said: “There’s a bit of concern here.” Cameroon likewise called on donors to consider this issue.
Several delegates referred to plans to update their Aid-for-Trade strategies. The European Union said they are in the process of updating their strategy which should be published by the beginning of 2017. Canada similarly said a review of their international assistance programmes is being undertaken in the next few months to ensure their aid is focused on the poorest and most vulnerable and remains flexible and agile. Turkey also said it was conducting a mid-term review for assistance to LDCs.
Multilateral development banks, namely the Asian Development Bank, African Development Bank and World Bank, updated the meeting on their on-going support related to trade, together with presentations from the Enhanced Integrated Framework, International Trade Centre and United Nations Industrial Development Organization.
The WTO Secretariat told members that preparations are under way for the 2016-17 Global Review of Aid for Trade in partnership with the OECD. The chair will schedule informal meetings to gather input on this effort.