About Trade [ID: 319]

Platform’s engagement in Aid for Trade

Why is the Platform engaging in the trade agenda? The slogan “From aid to trade” earmarks a new development which is based on the assumption that sustainable development can best be enhanced if trade and market access can serve as a driver of economic growth, job creation and public/private investments into today’s social and environmental challenges in developing countries.

However, the global trade regime and the many regional trade agreements are not yet sufficiently focused on a broader development agenda as called Sustainable Development Goals and their targets.

The calls for enhanced trade for development come from developing countries like in the recent Malabo Declaration of African Heads of State, the 4th EU-Africa Summit Declaration of 2014 and many regional and bilateral trade agreements. Until recently, however, trade and ARD were a world apart. With the switch from aid dependency to independent trade for development, a common understanding of the changing roles of institutions and actors in donor countries, developing countries and regional/international institutions is needed. The theory of change underpinning this transformation is intellectually easy to understand in its basic parameters, but complicated in its implementation due to the many barriers like the lack of synergies between trade and ARD policies and institutional coherence as well as the engagement and support of the private sector of all sizes.

The role of enhanced trade in agricultural produce is a prerequisite for effective rural development, but joined approaches, strategies and programmes need yet to be defined beyond policy directives being given already by developing countries, international finance institutions and donors. The Global Donor Platform for Rural Development established its work stream “Trade and ARD” with the desirable outcome of effective donor contributions to synergetic interactions between ARD and trade policies for the broader Post-2015 development agenda in developing countries.

The Platform established its work stream “Trade for ARD” under the assumption that the future ODA allocations by donor agencies will be more and more focused on economic growth and job creation as well as catalytic finance for enabling conditions to engage the private sector, in particular SMEs and rural communities. The logic of applying a markets and trade paradigm to agriculture is hard to fault. Ultimately, the livelihoods of three or four billion people at the bottom of the economic pyramid depend on the farming business. Agriculture is largely a private sector activity (even poor small-scale farming can be a business beyond subsistence), and the growth in demand for food in urban centres is creating substantial new market opportunities.

While there is a clear rationale for mobilising trade, private sector investments and innovative financing for economic growth, the development objective of tackling poverty remains fully valid for the international community. However, it is yet to be shown how effective the trade-based approach is in providing benefits for vulnerable groups like subsistence farmers at the bottom of the economic pyramid or for redressing growing inequality of the rural-urban divide.

In order to contribute to the debate and the development of feasible and mutually supportive approaches to trade and ARD, the Platform will address this nexus by applying its three function – advocacy, knowledge sharing and networking and cooperation.

The workstream should address trade and ARD as advocating initiative:

  • Common understanding on the role of trade for ARD development and awareness raising of trade as an promoter of Post-2015 development in a changing development landscape at national, regional and international levels
  • Portraying positive examples of donor support to enhanced governance, capacity building and institutional change to turn trade in practice into the desired development promoter
  • Analysis of the impact of “aid for trade” and other donor contributions on ARD development

The workstream should share knowledge on:

  • Common policy agenda of individual donor institutions on trade and ARD considering the policy objectives of agricultural production and rural development at large and the trade liberalization agenda of the individual donor agencies and other institutions charged with the trade agenda– how to achieve in-house synergies and a common understanding?
  • Donors views on global trade/markets and or versus regional integration of trade – the right mix of ARD products for the various markets
  • Food security, increased food production and food imports – what does policy coherence look like?
  • Given the great variety of contexts in developing countries, donor are supporting various activities related to ARD and trade – what is the impact by what focus (policy dialogue, infrastructure, governance, institutional change, capacity building in all regards including legal expertise)?
  • Donors views on trade regime/agreements like WTO, EPAs, bilateral agreements – what potentials and limitations does the global WTO trade regime and the trade agreements offer for ARD?
  • The use of trade-related instruments like EIF, trade facilitation
  • Donors’ support to the engagement of the private sector of all sizes and private sectors’ enhanced role in trade promotion

The workstream would facilitate networking and cooperation by:

  • Engaging in international events like the 5th WTO Global Review on Aid for Trade to increase the common understanding of trade and ARD colleagues and to prepare the ground for improved synergies
  • Engaging trade-related regional and international partner institutions in its support in the implementation of the Post-2015 development agenda (SDGs, targets etc.) as part of the rural transformation agenda, including at the Annual General Assembly in January 2016
  • Engaging with regional ARD programmes like CAADP or regional economic communities to determine jointly the priorities to increase synergies between trade promotion and ARD
Contacts Trade [ID: 323]

Contact | Secretariat

Octavio Araujo