UK launches Aid for Trade Strategy - helping countries grow through trade

04 December 2008

Secretary of State for International Development Douglas Alexander launched the UK Aid for Trade Strategy during the Follow-up International Conference on Financing for Development in Doha on Monday.

Mr Alexander launched the Strategy in a speech to more than 70 stakeholders, which included ministers from developing countries, high level representatives from the World Trade Organization (WTO) and development banks, Members of the European Parliament and civil society organisations.

The Secretary of State announced the UK’s intention to spend at least £400 million per year on Aid for Trade by 2010. The event was co-hosted by EU Development Commissioner Louis Michel, and attended by Malawi’s Minister of Finance Goodall Gondwe, and the Tanzanian Minister of Finance and Planning, Mustapha Mkulo. The UK’s Strategy will feed into EU and G7 commitments to increase Aid for Trade to $2 billion and €4 billion per year, respectively.

Douglas Alexander also pledged to deliver more Aid for Trade resources, calling on others to do the same:

“It is more important now than ever that the international community keep our pledges on the quantity and quality of aid we provide to the developing world. Aid for Trade will not only help to provide a route out of poverty for developing countries, but is also an investment in all our futures.”

A key aspect of addressing the current financial crisis, he said, involves helping to ensure that countries are able to trade competitively in the global market. For this to be achieved, we need to fight protectionism and create a more free and fair global trading environment – something that successfully completing the Doha round of trade talks as soon as possible could help to do.

What is Aid for Trade?

At its core, Aid for Trade (AFT) is about the faster and cheaper movement of goods and about creating opportunities for developing countries to grow and develop through trade. Key outcomes include reducing border delays, increasing exports, export income and productivity, raising standards and making traders more competitive. The UK’s Aid for Trade Strategy will also help to ease the costs of adjustment to a more open trading system.

The Strategy has four broad aims:

• Build countries’ capacities to trade through national growth and competitiveness strategies. For example, DFID is supporting the fisheries sector in Mozambique (which employs some 70,000 people) to maintain EU standards accreditation, thus safeguarding Mozambique’s access to the large EU market. Elswhere, DFID support also helped Lesotho to cut lengthy exports procedures from 7 days down to 15 minutes.
• Ensure trade results in poverty reduction and inclusive growth. Currently, DFID India brings the voice of the poor to the Indian Ministry of Commerce making sure their concerns shape trade policy. DFID will also soon launch a new trade and gender programme.
• Facilitate regional trade and integration and ensure Economic Partnership Agreements (EPAs) will be of benefit to African Caribbean Pacific countries (ACPs). DFID is supporting the North-South Trading Corridor initiative that will improve trading opportunities from the copper-belt of northern Zambia to the ports of South Africa - with an aim to cut transport costs by 10 per cent while promoting regional policy harmonisation. Under this aim, DFID has also supported EPA negotiators in Africa and the Caribbean.
• Build an international system that delivers more and better AFT. DFID supports the Enhanced Integrated Framework (EIF), a multi-donor initiative which will help 50 LDCs better mainstream trade into development policy.
  The Aid for Trade Strategy is a product of intense consultation across DFID, involving country offices, regional advisors and central policy teams. The result is a broad, DFID-wide agenda, capturing the work of many colleagues, and grounded in an understanding that helping countries trade is a cross-sector, multi-dimensional challenge.

For more information, please contact Camilla Otto , Head of the Aid for Trade team in the Trade Policy Unit on c-otto@dfid.gov.uk.