Development and building trade capacity
Aid for Trade and the Sustainable Development Goals
This section provides insight into the role of Aid for Trade in fostering sustainable development and helping developing countries address emerging challenges such as navigating transitions towards low-carbon economies and accelerating digital transformation. It reviews how sustainability considerations have been embedded into Aid for Trade projects and programmes and highlights the contribution of Aid for Trade towards various Sustainable Development Goals (SDGs) including SDGs related to gender equality and climate action.
Acknowledgements
Aid for Trade at a Glance 2022 is a joint publication of the Organisation for Economic Co-operation and Development (OECD) and the World Trade Organization (WTO). It was prepared under the overall guidance of (i) at the OECD Olivier Cattaneo Head of Policy Analysis and Strategy Unit of the Development Co-operation Directorate supervised by Haje Schütte Senior Counsellor and Head of the Financing for Sustainable Development Division and Mayumi Endoh Deputy-Director for Development Co-operation and (ii) at the WTO Michael Roberts Head of the Aid for Trade Unit of the Development Division supervised by Deputy Director-General Xiangchen Zhang and Shishir Priyadarshi Director of the Development Division.
Aid for Trade during the COVID-19 crisis and recovery
This chapter provides an overview of the evolution of Aid for Trade flows in a context marked by the COVID-19 pandemic. It reviews key trends affecting the trade and investment landscape and their repercussions on Aid for Trade flows. Finally it analyses the role of Aid for Trade in supporting an equitable global economic recovery
Executive summary
The 2022 Aid for Trade Monitoring and Evaluation (M&E) exercise takes place amidst crises of unprecedented magnitude significantly affecting trade and investment. The COVID-19 pandemic has caused severe human and economic losses slowing down and in some cases reversing hard won progress towards the Sustainable Development Goals (SDGs). Countries lacking the capacity to implement large monetary and fiscal stimuli were hit hard experiencing widening inequalities. While 2021 showed signs of a swift recovery in early 2022 Russia’s war against Ukraine created a major humanitarian crisis and derailed economic growth prospects. Spikes in the price of energy and food caused by the war combined with rapidly rising inflation are posing serious food security risks in low-income countries (LICs).
Statistical note
According to the WTO Task Force on Aid for Trade projects and programmes are part of aid for trade if these activities have been identified as trade related development priorities in the partner country’s national development strategies.
Explanatory note
The aid-for-trade country profiles provide factual information aid-for-trade financing flows trade costs trade performance and key development indicators at the country level. The aim is to compare a performance in these four categories for the year 2020 as compared to 2006 the year of the inception of the aid-for-trade initiative and against country group benchmarks for these selected indicators. The aim of the country profiles is to stimulate debate on aid-for-trade effectiveness.
Foreword
Trade finance—credit facilities used by importers and exporters to transact business—is important for enabling global trade. These instruments bridge the gap between when the exporter wants to receive payment for producing and shipping goods and when the importer receives them. Although trade finance is routinely provided by banks to importers and exporters in advanced economies developing countries face chronic shortages.
Estimating Total Trade Finance Assets: Methodology
In order to estimate the total value of trade finance in a country we have considered two alternative methodologies. One has been developed by the African Development Bank for its continental trade finance study. The other was developed by us and uses the relationship between the assets of banks in the country based on central bank statistics and trade finance assets identified in the survey.
ECOWAS4 Trade and Global Value Chain Performance
This annex includes additional exhibits on the four countries’ change in export market shares their export penetration and global value chain participation. These illustrations complement evidence discussed in Chapter 1.
Acknowledgments
This report was prepared under the guidance of Susan Lund Vice President of Economics at IFC and Anabel Gonzalez Deputy Director-General at the WTO. Marc Auboin (WTO) and Denis Medvedev (IFC) provided leadership for the research and Eddy Bekkers (WTO) Alexei Timofti (WTO) Alexandros Ragoussis (IFC) and Susan Starnes (IFC) managed the project team. Working team members included Karlygash Dairabayeva Leo N. Holtz Serhii Kostohryz Shan Shan Li Steve Mbollo Ibrahim Nana Joshua Ostry Arun Prakash Dario de Quarti Friedemann Roy Yulia Vnukova and Ariane Volk.
Framework for Counterfactual Experiments on Trade Finance Costs
The costs of financing international trade are an important component of total trade costs. This annex contains a description of the determination of financing costs based on the survey and data in the literature and the calculation of counterfactual financing costs. Furthermore details of the employed WTO Global Trade Model are provided.