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Aid for Trade

Aid for trade addresses developing countries' internal constraints to trade, such as cumbersome regulations, poor infrastructure and lack of workforce skills.

The OECD categorises aid for trade as development assistance that supports:

  • trade policy
  • economic infrastructure
  • building productive capacity, and
  • trade-related adjustment.

On average, every dollar invested in aid for trade increases recipient country exports by an additional US$8.

The global Aid for Trade Initiative was launched at the 2005 Hong Kong World Trade Organization (WTO) Ministerial Conference, recognising the importance of trade in driving economic growth and the need to assist developing countries in improving their capacity to trade.

Australia's aid for trade

Australia's aid for trade activities focus on helping developing countries create opportunities for job creation and to build livelihoods through increased trade. As a key part of Australia's new development policy, aid for trade investment will increase to 20 per cent of Australia's total aid budget by 2020.

In 2013-14 the majority of Australia's estimated $630 million in aid for trade expenditure was directed towards global or multi-country initiatives (35 per cent), projects in East Asia (31 per cent), and projects in the Pacific – including in Papua New Guinea (17 per cent). Approximately 54 per cent was directed towards building productive capacity – including in agriculture, 42 per cent towards improving economic infrastructure – including transport and storage, and 4 per cent towards streamlining trade policy and regulation.

In July 2014 the Australian Government announced the creation of a new Global Trade Integration Facility, committing $60 million over four years to help developing countries participate in international trade and boost global economic growth.

Aid for trade by region

East Asia 31%, PNG and Pacific 17%, Sub-Saharan Africa 10%, South and West Asia 6%, North Africa and teh Middle East 1%, Global/Multi-country 35%

Aid for trade by key sector

Building productive capacity 54%, Economic infrastructure 42%, Trade policy and regulations and trade-related adjustment 4%
Last Updated: 2 February 2015
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