The WTO-led Aid for Trade initiative has contributed US$ 648 billion since 2006 to strengthen the export potential of developing economies and least-developed countries (LDCs). The impact of the initiative in improving these economies' capacity to trade is revealed in a new publication — “Aid for Trade at a Glance 2024” — launched by the WTO and the Organisation for Economic Co-operation and Development (OECD)on 26 June.

The publication uses the results of a survey of developing economies to outline their priorities for Aid for Trade financing. It provides an overview of funding flows and looks into how this financing has helped developing economies, and in particular LDCs, use trade to foster economic growth, sustainable development and poverty reduction.

Aid for Trade helps developing economies and LDCs to build more resilient, inclusive and sustainable economies through the transformative power of trade. It promotes the integration of developing economies, especially LDCs, into the multilateral trading system and aims to galvanize support to build supply-side capacity and trade-related infrastructure in these economies. However, greater efforts are required to help developing economies and LDCs to benefit from emerging trade opportunities from digital technologies and the green transition.

Disbursements, commitments at all-time high

Aid for Trade disbursements and commitments surged in 2022, the latest year where data are available, surpassing pre-pandemic levels. Disbursements reached an all-time high of US$ 51.1 billion — a 14 per cent year-on-year increase in real terms (see Figure 1). Commitments increased by 31 per cent to reach a peak of US$ 65 billion.

Figure 1. Evolution of Aid for Trade disbursements and commitments, 2002-2022
(In US$ billion, constant 2022 US$)

Source: OECD Creditor Reporting System.

Aid for Trade donors

Over 55 per cent of Aid for Trade is provided by bilateral donors, primarily countries that are members of the OECD Development Assistance Committee. Other Aid for Trade financing is mostly provided by multilateral donors, such as the World Bank and the Asian Development Bank. In 2022, the top donors included Japan (US$ 11.1 billion — about one fifth of total Aid for Trade disbursements), followed by the World Bank (US$ 7.9 billion) and EU institutions (US$ 6.8 billion).

Aid for Trade destinations

Africa and Asia are the main geographical destinations of Aid for Trade, accounting for 70 per cent of total flows. By income level, lower middle-income economies are the main recipients of Aid for Trade, representing US$ 19.8 billion (38 per cent of total disbursements), followed by LDCs and other low-income economies, which accounted for US$ 14.1 billion (28 per cent) in 2022 (see Figure 2). Since 2006, LDCs have received a total of US$ 189 billion in Aid for Trade.

Figure 2. Aggregate and share of disbursements by income group
(In US$ billion and as a share of total disbursements)

Source: OECD Creditor Reporting System.

Types of projects receiving funding

Aid for Trade projects comprise three main types: (i) economic infrastructure (i.e. roads, ports, telecommunications), which accounted for 54.6 per cent of funding in 2022; (ii) productive capacity building (support to productive sectors with high export potential), 43.6 per cent; and (iii) trade policy and regulations, 1.8 per cent.

Within these three categories, transport and storage attracted the highest share of funding (27 per cent), followed by energy generation and supply (23 per cent), agriculture (18 per cent) and banking and financial services (12 per cent) (see Figure 3).

Figure 3. Share of disbursements by types of projects
(As a share of average disbursements for 2021 and 2022)

Source: OECD Creditor Reporting System.

Impact of Aid for Trade initiative

A cornerstone of the Aid for Trade initiative is the monitoring and evaluation (M&E) exercise, organized by the WTO and the OECD, which draws together responses provided by donors, recipients — known as partner countries, and others in self-assessment questionnaires.

The responses to the questionnaire confirm that trade remains a vital tool for advancing the global development agenda. According to partner country respondents, the main areas where Aid for Trade has the most impact are trade facilitation, support for trade policies and regulations (including regional trade agreements and multilateral trade negotiations), agriculture, and trade education and training (see Figure 4). Donors also cited trade facilitation and agriculture as areas of most impact. In addition, donors said that Aid for Trade has positively impacted digital connectivity and e-commerce, trade-related transport and storage infrastructure, and banking and financial services.

Figure 4. Top areas where Aid for Trade has an impact

Source: As a percentage of the responses given in the joint OECD–WTO M&E exercise.

“Aid for Trade at a Glance” reaffirms the importance of leveraging trade as a force for development. By investing in Aid for Trade, the international community can unlock new opportunities for growth, create jobs and promote inclusive development. Looking ahead, it is crucial that the Aid for Trade initiative remains aligned with changing needs and realities and continues to contribute to a more inclusive and sustainable multilateral trading system.