The Future of Aid for Trade: Challenges and Options

World Trade Review, Vol. 12(4) October 2013, pp. 653-668

Posted: 18 Apr 2013 Last revised: 5 Sep 2013

See all articles by Jean-Jacques Hallaert

Jean-Jacques Hallaert

International Monetary Fund (IMF); Groupe d'Economie Mondiale (GEM)

Date Written: April 16, 2013

Abstract

The Aid for Trade Initiative needs to be revamped. This article describes the challenges the Initiative faces and describes the pros and cons of possible reforms. The Aid for Trade Initiative succeeded in mobilizing quickly a large amount of financial resources. However, because the Doha Round talks stalled, the aid mobilized could not support the implementation of a multilateral agreement. Instead, it was spent on various projects, some of them not clearly related to trade. This affected developing countries confidence in the Initiative. To make matters worse, in the midst of a fiscal crisis that threatens development budgets, the Initiative had difficulties showing convincing results. In order to preserve resource mobilization, the WTO is expanding the scope of the Initiative to new areas only remotely related to trade and the trade and development nexus. This is unlikely to build confidence. The WTO should rather narrow the scope of the Initiative in order to make it more focused and efficient.

Keywords: Aid for Trade, WTO, trade and development, trade and growth aid

JEL Classification: F13, F35, O19

Suggested Citation

Hallaert, Jean-Jacques, The Future of Aid for Trade: Challenges and Options (April 16, 2013). World Trade Review, Vol. 12(4) October 2013, pp. 653-668, Available at SSRN: https://ssrn.com/abstract=2252628

Jean-Jacques Hallaert (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Groupe d'Economie Mondiale (GEM) ( email )

28, rue des Saints-Pères
Paris, 75007
France

HOME PAGE: http://gem.sciences-po.fr

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