Regional Perspectives on Aid for Trade

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Deepening economic integration via regional co-operation has emerged as a key priority in the reform strategies of most developing economies over the past decade. This is evidenced by the explosive growth in bilateral and regional trading agreements in which they now participate. Regional aid for trade can help developing countries spur regional economic integration, enhance competitiveness, and plug into regional production networks.

Based on a rich set of experiences regarding regional aid for trade projects and programmes, the study finds that regional aid for trade offers great potential as a catalyst for growth, development and poverty reduction. The study recommends greater emphasis on regional aid for trade as a means of improving regional economic integration and development prospects. While regional aid for trade faces many practical implementation challenges, experience has shown that associated problems are not insurmountable but do require thorough planning, careful project formulation, and prioritization on the part of policy makers.



How aid for trade facilitates regional co-operation

This chapter considers how regional aid for trade can affect regional economic integration by facilitating trade and investment links at the microeconomic level. In particular, it considers how regional aid for trade can help developing economies enhance economic integration and benefit from regional production networks, which have become important drivers of regional and global economic integration in recent years and promise to be increasingly critical to development prospects in the future. Using surveys and case stories from Asia, Latin America and Africa, it shows that regional aid for trade has, indeed, been effective to date in attaining these goals. However, the scale of these initiatives has been limited; the chapter closes with a review of trends in regional aid for trade flows in the overall development assistance context.


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