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Aid for Trade at a Glance 2015

Reducing Trade Costs for Inclusive, Sustainable Growth

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The Aid for Trade Initiative has allowed for the active engagement of a large number of organisations and agencies in helping developing countries and especially the least developed build the infrastructure and supply-side capacity they need to connect to regional and global markets and improve their trade performance. The new development paradigm under the post-2015 Development Agenda requires an integrated approach to ensure that the aid for trade achievement leads to inclusive and sustainable development outcomes. Embedding trade cost at the centre of the Aid for Trade Initiative provides an operational focal point for such action among a broad collation of stakeholders.

The 2015 joint OECD/WTO publication Aid for Trade at a Glance focusses on how reducing trade costs will help in achieving inclusive and sustainable economic growth. The publication contains contributions from the Enhanced Integrated Framework, the International Trade Centre, the United Nations Conference on Trade and Development, and the World Bank.

 

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Reducing Trade Costs for Least Developed Countries

For the LDCs reducing trade is doubly important because since they start from a lower base, they can potentially derive disproportionately higher benefits compared to other countries. Thus LDCs are taking necessary measures aimed at lowering trade costs either on their own or with the support of the private sector, and some have achieved considerable success. However, they are unable to make a transformative shift because of limited institutional capacity and resource constraints. This is where aid for trade can help, as evidenced by the success achieved by various multilateral, regional and bilateral aid-fortrade initiatives. The paper shows that the impact of aid-for-trade intervention on reducing trade costs in LDCs tends to be higher when they include a robust and credible analytical work, a high level of country ownership, institutional capacity building on a sustained basis, continuous support for a sufficiently long period, resource leveraging and a co-ordinated response from donors. Moreover, such intervention can be successful if political economy challenges are appreciated, mainstreamed and mitigated.

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