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Working together on transforming 'Aid for Trade' into 'Investment for Trade'.
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Recent origins of Aid for Trade
The recent day AfT agenda originated through World Trade Organization (WTO) negotiations and can be traced back to developing country concerns, which focused on two key issues: first, the perceived limited benefits to developing countries from improved market access alone, without sufficient supply-side support; and second, the need for compensation for adjustment costs associated with multilateral (and other levels) trade liberalisation.
In response to these concerns, the WTO Ministerial Conference in December 2005 called on donors to increase AfT resources to ‘help developing countries, especially least developed countries, build the supply-side capacity and trade-related infrastructure that they need to assist them to implement and benefit from WTO Agreements and more broadly to expand their trade’.
Increased recognition of the importance of trade-related assistance came at a time when donors had agreed to a substantial increase in the overall aid envelope, in large part under the G8 Gleneagles Agreement and the United Nations Millennium Task Force.
The commitments to increase overall assistance in 2005 allowed a rebalancing towards the trade and growth agendas. This led to a number of multilateral and bilateral development agencies committing substantial funds under the AfT rubric.
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