December 14, 2005, Hong Kong, Press Release

The Developed countries are pushing the “Aid for Trade debate” at the ongoing World Trade Organisation (WTO) negotiations at Hong Kong. EU has already declared that the EU aid package for the programme will rise to Euro 2 billion by 2010. The EU firmly believes that aid for trade is very important for the economic development of Least Developed Countries (LDCs). In this regard the EU points out that there are certain challenges that LDCs must take account of to reap the benefits of this aid for trade.

  • Firstly, LDCs must improve their capacity to be able to effectively participate and implement multilateral trade agreements.
  • Secondly, there will be a need for LDCs to improve and strengthen their private sector so that tangible benefits from trade may be realised.
  • Thirdly, adjustment costs will need to be assessed to negate any adverse effects from import surges from richer countries.

LDCs must first craft their own national development strategy of which trade must play a key role. That is trade must fall under the ambit of national development strategy. Once this is done trade can then be put forward in the negotiations on the Doha Work Programme (DWP). However, for the DWP to be of any success this Aid for Trade programme must not be pushed as an alternative for ambitious development round that the poor countries require.

Market access negotiations must go hand in hand with the idea that LDCs must be given adequate time periods to allow their economies to adjust to any adverse shocks that may arise from trade liberalisation. More importantly there must be help for Developing Countries to realise the successful completion of the DWP by dealing clearly with the issues of preference erosion. No one size fits all approach can be used for this as different LDCs will have differing requirements. For this it is acknowledged that strong political will is needed to address these difficult matters. Indeed it will be paramount for LDCs on their own to be clear on what their development priorities and policies are. To this end the Integrated Framework (IF) may be used to prepare the groundwork. However it must be remembered that IF is not the answer to all the development needs of the LDCs. What is important is policy coherence especially at the international level on Millennium Development Goals, Monterrey Consensus, and Sustainable Development. Moreover, the Aid for Trade should not come up with conditionalities that could go against the national development priorities of poor countries.

Further, the undue emphasis placed on targeting agriculture subsidies and industrial tariffs in the Hong Kong ministerial alleged to have left out some of the critical development and trade related concerns of the developing and least developed countries. This has caused alarm among the civil society organisations. They argue that the various non tariff barriers (NTBs) being put up by the rich countries in the form of standards, especially for the agriculture and processed goods exports of poor countries have not received adequate attention in the Hong Kong talks. Many representatives of the Civil Society Organisations (CSOs) believe that non tariff barriers including some of the infamous and unscientific sanitary and phytosanitary standards are deliberate creations of the rich countries, which keep blocking the trade expansion of poor countries irrespective of the reduction in farm subsidies and tariffs. Many delegates felt that in order to bring key development concerns such as livelihood security, employment creation through trade on the negotiation table, the poor countries need to do a lot more efforts.