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Aid for Trade at a Glance 2013

Connecting to Value Chains

image of Aid for Trade at a Glance 2013

This joint OECD-WTO publication puts a spotlight on aid for trade to assess what is happening, what is not, and where improvements are needed. The analysis is focused on trends in aid-for-trade policies, programmes and practices. It shows that the Aid-for-Trade Initiative is delivering tangible results in improving trade performance and bettering people’s lives, notably those of women, in developing countries.

The report highlights that aid for trade plays an important role in enabling firms in developing countries to connect with or move up value chains. In fact, the emergence of value chains strengthens the rationale for aid for trade.

Stakeholders remain actively engaged in the Aid-for-Trade Initiative. The 2013 monitoring exercise was based on selfassessments from 80 developing countries, 28 bilateral donors, 15 multilateral donors, and 9 providers of South-South co-operation. Views were also received from 524 supplier firms in developing countries and 173 lead firms, mostly in OECD countries.

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Evaluating the effectiveness of aid for trade

This chapter explores the effectiveness of aid for trade in promoting trade – both exports and imports – and conditions which tend to make it most effective. The review provides abundant evidence to suggest that aid for trade is indeed broadly correlated with increases in trade. Aid for trade works best when it is focused on reducing the costs of trading through improvements in infrastructure, trade facilitation, trade-related public institutions (such as customs, standards administration, and export promotion), and polices (including eliminating policy barriers to competition). Aid for trade – in varying forms – directed to low income countries is particularly helpful in promoting trade. Analysis in this chapter suggests that aid for trade destined to low and lower-middle income countries is likely to have a high pay-off. Typically, one dollar invested in aid for trade is associated with an increase of nearly USD 8 of exports from all developing countries – while one dollar of aid for trade to International Development Association (IDA)-eligible poorest countries amounted to US 20 in new exports and to USD 9 for all low and lower-middle income countries.

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