Aid for Trade should not be viewed as a panacea

For low income countries to reap maximum returns from the benefits of trade, there is need to address bottlenecks in a comprehensive and holistic manner, Commonwealth Deputy Secretary-General Ransford Smith has said.

Mr Smith was speaking on 23 June 2009 in Geneva, Switzerland, at the opening session of a meeting of senior trade officials from African, Caribbean and Pacific (ACP) countries in preparation for the forthcoming Second Global Review of Aid for Trade - an initiative to build the capacity of low income countries to produce goods to supply to markets.

“The need to strengthen the capacity of low income countries to produce goods to put on the markets in the face of the recent crises and the global economic downturn is more pressing now than ever before,” Mr Smith said.

“Aid for Trade should not be viewed as a panacea in itself, but as a complement to effective trade measures to improve market access and address other trade concerns of developing countries.”

The Deputy Secretary-General added: “It is evident that realising the full benefits of trade will require an approach that simultaneously focuses on national development strategies, improvements in the international trade regime, and increased and effective international assistance to develop production and trade capacities.”

Aid for Trade aims to address challenges of high transport costs, red tape, lack of skills and poor product standards, among many others, within poor and low income countries to enable them to compete in the global marketplace.

Mr Smith said that the Commonwealth recognises the critical role aid for trade can play in addressing the above challenges, saying that the funds are particularly critical for countries historically dependent on trade preferences which have now been removed.

Speaking at the same meeting, the Director-General of the World Trade Organization (WTO), Pascal Lamy, welcomed the initiative by ACP countries to prepare them for the forthcoming review of Aid for Trade which will take place on 6 and 7 July 2009, noting that the outcomes of the ACP meeting will be incorporated into the Review.

Mr Lamy said he was pleased that Aid for Trade funds are already being used at regional levels to build necessary infrastructure to boost trade. He cited the example of the North-South Corridor project which is being undertaken by countries in the Common Market for Eastern and Southern Africa (COMESA) and Southern African Development Community (SADC) to build a road network connecting the countries.

Mr Lamy also allayed fears by participants that aid for trade will lead to sidelining other aid commitments, saying that data show that more aid for trade is not in fact coming at the detriment of other aid flows.

The head of the Geneva office of ACP, Ambassador M Kasiri, said the objective of the two-day meeting is to raise issues of concern to the ACP countries regarding obtaining, utilising and measuring of the effectiveness of Aid for Trade.

He also said that the meeting would provide them with preliminary responses on questions relating to improving the provision and delivery of Aid for Trade, as well as allowing countries to better understand the Review process taking place 6-7 July, in which they will be participating.

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