The meeting began with keynote addresses by Pascal Lamy, director general of the World Trade Organisation, and Karel De Gucht, the EU trade commissioner. Both of their speeches lauded the role that trade liberalisation has had in achieving economic growth and hence poverty reduction and how important it is to maintain and increase current levels of AfT despite diminishing aid budgets. Both speakers warned about the looming specter of protectionism and the risk that we are entering an age of retreating multilateralism. There was also a sense that AfT needs to be rebranded as Aid for Investment in order to address the wider agenda it has adopted. There was also a statement made that increased aid for trade does not come at the expense of investment in social sectors which seemed without basis as these sectors are one of the few not captured by AfT.

New DAC Chair
Erik Solheim, the new Chair of the OECD DAC, made what must have been the first intervention in his new job which covered what his priorities for the coming year would be. These priorities include the creation of strong states, leveraging private finance, opening markets, and climate finance.

Monitoring and Evaluation:
AfT was declared an undeniable success by the majority of interventions yet it was also pointed out that there are serious weaknesses in demonstrating attribution. Weak monitoring and evaluation as well as a lack of medium and long term impact assessments make it impossible to determine the actual effect of aid for trade. Even more difficult was demonstrating its impact on poverty eradication. Furthermore there is no consensus on what AfT is actually comprised of. Some identify it as any aid used to support anything that could involve trade, such as infrastructure, worker training, administrative modernisation, enabling environment for private sector etc… while others identified it as only activities that focused on increasing the efficiency of cross border trade. Furthermore it was noted by the partner countries that there are serious problems regarding ownership in AfT. New monitoring frameworks need to be developed that are determined by partner countries rather than donors. From our perspective as long as this ambiguity behind purpose and inability to demonstrate real impact toward poverty eradication exists then it is difficult to label AfT an undeniable success.

Reaching the private sector:
Reaching the private sector has been a challenge for the majority of aid related processes and this is no different in AfT. Once again the sense of mission creep as well as the ambiguity behind the purpose of AfT made this a difficult and unfocused discussion that addressed a sundry of issues from the need for access to financing for SMEs to increased stakeholder dialogue to South-South Cooperation (SSC) to increasing trade finance. One of the most notable interventions was by the moderator (Thomas de Man of Heineken) who stated that the greatest constraints for MSMEs is access to finance, and the focus of private sector oriented aid interventions should address this concern, as larger multinationals can manage without such assistance.

What was missing from this discussion is the role of other social partners such as trade unions and civil society in mitigating the negative impacts of trade liberalisation. While trade can be a creator of jobs it is also a destroyer of jobs. The role of social protection and effective welfare systems was only briefly touched upon as most emphasis was placed on making borders efficient and increasing capacity at the senior level.

Where to next:
The final session focused on what should be done next with aid for trade. While most of the academics and think tanks focused on the need for better monitoring and evaluation, there was a proposal from Simon Maxwell from ODI that the ambiguity from AfT needs to be addressed. Either AfT should focus on modernising and facilitating cross border trade or it should be more general, looking at infrastructure constraints, public private partnerships, and discussions with local and international stakeholders (private sector). The risk with the latter approach is that these issues are already being discussed in a variety of other fora so we could see a proliferation of parallel structures, whereas the former would require a significant scaling down of the activities currently associated with AfT.

Headlines on AfT
• AfT currently comprises of 1/3rd of all ODA through investments in infrastructure, energy, and agriculture.
• AfT suffers from huge monitoring and evaluation constraints which make attribution incredibly difficult.
• AfT does not operationalise poverty eradication, rather it focuses on the benefits of economic growth and trade liberalisation.
• AfT is not well defined as it means different things to different groups. This ambiguity must be addressed if AfT is to remain relevant.
• There is a clear case of mission creep in AfT as its brief is ever expanding. Much of what it currently does is also being implemented in parallel processes.
• AfT does not work if there is no ownership at the local level.
• AfT could have more impact if it focused on modernising the minutiae of trade such as creating automated and paperless systems that reduce the amount of time required to register imports and exports, and increasing capacity amongst those responsible for border checkpoints in the operation of these systems.
• More focus in AfT should be on mitigating the negative impacts of trade liberalisation through social protection.
• AfT needs to be aligned with partner countries development strategies and industrial policies. Currently its agenda is donor driven and donor controlled with developing countries focusing more on compliance.

Written by Jeroen Kwakkenbos
Policy and Advocacy Officer - Eurodad, European Network on Debt and Development