United States Seeks To Promote Development Through Aid for Trade
December 18, 2008On December 16, U.S. Trade Representative (USTR) Susan C. Schwab announced that the United States raised its annual spending on Aid for Trade programs, also known as trade capacity building, to $2.3 billion in the 2008 fiscal year, an increase of 60% from the 2007 fiscal year. Since 2000, the United States has provided more than $9.7 billion in total trade-related assistance to our less developed trading partners.
“We continue to work to meet the $2.7 billion target in annual Aid for Trade initiatives by 2010, a commitment we made at the 2005 World Trade Organization’s Hong Kong Ministerial Meeting,” said Ambassador Schwab. “This is another example of the ongoing U.S. commitment to promoting development and achieving a successful conclusion to the Doha Round negotiations.”
The United States is the largest single-country provider of trade-related assistance, including development of trade-related physical infrastructure. This assistance is aimed at helping developing countries take advantage of the opportunities of the global trading system, and more broadly, harness trade as an engine of growth and development.
The U.S. approach to trade capacity building emphasizes grants — rather than loans — and allocates funds based largely on local needs as determined by recipient countries. For example, U.S. trade capacity building projects help small and medium-sized businesses and farmers enter markets and promote diversified economic growth around the world. The U.S. Agency for International Development and the Millennium Challenge Corporation are the largest U.S. providers of Aid for Trade programs.
“Our ability to provide effective programs that help countries harness the growth potential of trade relies on developing countries, particularly the least-developed, including trade in their development programs,” Ambassador Schwab said. “Our commitment to our developing country partners remains unwavering, and we recognize the growing importance of these countries’ contributions to the global trading system. Aid for Trade is a shared responsibility between recipient countries and donors.”
At the World Trade Organization’s Ministerial meeting in 2005, the Hong Kong Ministerial, WTO members agreed to establish an Aid for Trade Task Force, to examine how to improve trade-related development assistance. At the same time, the U.S. government stated its objective of reaching $2.7 billion in annual spending in trade-related development assistance by 2010. Meeting this target would constitute a doubling of such assistance as compared to 2005 levels.
The Aid for Trade Task Force completed its work in July 2006. Mr. Pascal Lamy, the WTO Director-General, has followed up on the task force’s report, including by organizing three regional reviews and one global review of Aid for Trade last year. The United States is also working to promote more effective Aid for Trade practices as an active participant in multilateral initiatives, including the Enhanced Integrated Framework, a multi-donor effort that helps the least-developed countries improve participation in the global trading system.
