The WTO-led Aid for Trade initiative has contributed US$ 648 billion since 2006 to strengthen the export potential of developing economies and least-developed countries (LDCs). The impact of the initiative in improving these economies' capacity to trade is revealed in a new publication — “Aid for Trade at a Glance 2024” — launched by the WTO and the Organisation for Economic Co-operation and Development (OECD) on June 26.
The publication uses the results of a survey of developing economies to outline their priorities for Aid for Trade financing. It provides an overview of funding flows and looks into how this financing has helped developing economies, and in particular LDCs, use trade to foster economic growth, sustainable development, and poverty reduction.
Aid for Trade helps developing economies and LDCs build more resilient, inclusive, and sustainable economies through the transformative power of trade. It promotes the integration of developing economies, especially LDCs, into the multilateral trading system and aims to galvanize support to build supply-side capacity and trade-related infrastructure in these economies. However, greater efforts are required to help developing economies and LDCs benefit from emerging trade opportunities from digital technologies and the green transition.
Disbursements reached an all-time high of US$ 51.1 billion — a 14 percent year-on-year increase in real terms. Commitments increased by 31 percent to reach a peak of US$ 65 billion.
Over 55 percent of Aid for Trade is provided by bilateral donors, primarily countries that are members of the OECD Development Assistance Committee. Other Aid for Trade financing is mostly provided by multilateral donors such as the World Bank and the Asian Development Bank. In 2022, top donors included Japan (US$ 11.1 billion), followed by the World Bank (US$ 7.9 billion) and EU institutions (US$ 6.8 billion).
Africa and Asia are the main geographical destinations of Aid for Trade, accounting for 70 percent of total flows. By income level, lower middle-income economies are the main recipients of Aid for Trade, representing US$ 19.8 billion (38 percent), followed by LDCs and other low-income economies which accounted for US$ 14.1 billion (28 percent) in 2022.
Aid for Trade projects comprise three main types: economic infrastructure (54.6 percent), productive capacity building (43.6 percent), and trade policy and regulations (1.8 percent). Within these categories, transport and storage attracted the highest share of funding (27 percent), followed by energy generation and supply (23 percent), agriculture (18 percent), banking, and financial services (12 percent).
A cornerstone of the Aid for Trade initiative is monitoring and evaluation organized by WTO and OECD using self-assessment questionnaires from donors, recipients known as partner countries among others.
According to partner country respondents, key areas where Aid for Trade has significant impact include trade facilitation; support for trade policies; regulations including regional agreements; agriculture; education; training among others.