Aid for Trade (AfT) is about helping developing countries, in particular the least developed among them, to build the trade capacity and infrastructure they need to benefit from trade opening. It is part of overall Official Development Assistance (ODA) – grants and concessional loans – targeted at trade-related programmes and projects.
Because trade is a broad and complex activity transcending sectoral boundaries of an economy, AfT is also broad and not easily defined. The WTO Task Force on Aid for Trade (Recommendations of the Task Force on Aid for Trade, WT/AFT/1, 27 July 2006) included under the AfT rubric the following four categories:
(a) technical assistance – helping countries to develop trade strategies, negotiate more effectively and implement outcomes;
(b) infrastructure – building roads, ports, and telecommunications that link domestic and global markets;
(c) productive capacity – investing in industries and sectors so countries can diversify exports and build on comparative advantages; and
(d) adjustment assistance – helping with the costs associated with tariff reductions, preference erosion, or declining terms of trade.
FAO is collaborating actively with the WTO and other development partners in elaborating the Aid-for-Trade initiative for the agricultural sector and facilitating the implementation of the initiative in the area of agriculture. Most of the Aid-for-Trade actions take place at the country level, but cross-border and regional programmes and projects are also envisaged.
The emphasis placed by the Aid-for-Trade initiative on supply-side capacity and infrastructures on the one hand, and the significance of the agricultural sector in the economy and poverty reduction on the other, means that FAO is well placed to collaborate with development partners in operationalizing this new initiative.