Global trade brings to mind images of sophisticated container ports, bustling rail hubs, modern superhighways, broadband internet connections, and complex trade agreements. But trade is equally – if not more so – important for the almost one billion poor people living on less than $1.25 a day, who struggle to connect themselves to trade opportunities.
Many low-income countries are still confronted by major obstacles in expanding and diversifying their trade, and trade reform and liberalization have not always delivered the expected benefits in terms of trade expansion, growth and poverty reduction. Against this backdrop, the international community has agreed to expand and improve aid for trade to help developing countries, particularly the least developed, build the supply-side capacity and trade-related infrastructure needed to expand their trade and to benefit from their integration into the world economy.
According to the OECD Journal, Aid for Trade has been designed as a tool to interlock aid and trade policies in pursuit of raised living standards and a reduction in poverty. Although trade-related assistance has been available for some time, few bilateral donors have explicit trade objectives incorporated within their aid programs and even fewer have programs that are aimed at engaging the poor directly in trade-related activities. The objective of this OECD-WTO Report is to raise awareness among donors and partner countries of the potential contribution of trade to economic growth and development, the challenges of realizing that potential and the role of Aid for Trade in addressing those challenges.

In Geneva, in his remarks, Angel Gurría OECD Secretary-General mentioned that:
“Economic diversification holds great potential to increase resilience and contribute to achieving and sustaining long-term economic growth and development. Broad-based economies, active in a wide range of sectors, and firmly integrated into the global economy, are better able to generate robust and sustainable growth.”
Yet challenges persist
However, the path towards economic diversification is becoming increasingly complex due to subdued trade growth and foreign direct investment. In addition, trade tensions and renewed calls for protectionism have hit the most vulnerable in particular, the least-developed, the landlocked, the developing countries and fragile states. These countries can ill afford the cost of global uncertainties. They urgently need to raise export competitiveness so that trade can benefit marginalized groups, in particular youth and women.
The OECD/WTO report takes stock of these issues and puts forward a number of recommendations which focus on promoting empowerment and economic diversification, such as:
Focusing on the economic empowerment of women and youth – an issue that remains high on the 2030 Agenda for Sustainable development. Youth represent a large and growing proportion of the population in many developing countries and they are three times more likely than adults to be unemployed. To promote empowerment effectively, aid programs need to focus more explicitly on helping developing countries to create more opportunities for women and youth, particularly in sectors such as manufacturing but also in banking, transport, energy and, forwarding development opportunities.
The economic empowerment of small to medium-sized enterprises (SME) is also a crucial factor. As such, the entry into force of the WTO Trade Facilitation Agreement in 2017 has created a momentum that is helping to level the playing field between large and small firms. This is being achieved by improving the environment that SMEs face in export markets and in the origin economies of their imported inputs. According to partner countries, Aid for Trade facilitation appears to be one of the best ways to support the economic empowerment of SMEs and to promote economic diversification.
Infrastructure, a tool for trade. The major difficulty in analyzing issues regarding trade and infrastructure involves identifying the infrastructure that has a direct effect on trade. This is a challenge as the concept of infrastructure is generally very wide and all-encompassing to include the indirect effect on trade. In fact, all types of infrastructure affect trade directly or indirectly.
One way of getting around this definitional problem, according to the 2012 Global Enabling Trade Report, involves looking at the factors which enable trade through identifying sets of indicators, including domestic and foreign market access, efficiency of customs administration, efficiency of import-export procedures, transparency of border administration, availability and quality of transport infrastructure, availability and quality of transport services, availability and use of information and communication technologies (ICTs), the regulatory environment, including access to trade finance, and physical security. While it is difficult to measure the quality of infrastructure, it is possible to measure its availability, for instance through utilizing data on the percentage of paved roads out of total roads, the number of fixed and mobile telephone subscribers, the number of telephones mainlines, freight by air transport, etc. There is, however, a general agreement regarding the dearth of data on the trade-related infrastructure in least developed countries, small vulnerable economies and Sub-Saharan Africa, making it difficult to gain have a clear picture of the adequacy of the infrastructure and to assess its impact on trade
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