Time to double down on trade development
For trade and development, 2025 is a year like no other. Tariff talks continue to grab headlines. But urgent action is also needed to stop the sun setting on trade development cooperation. This June in Sevilla, global leaders committed to scaling up Aid for Trade (AfT), including doubling AfT provision to the world’s least-developed countries (LDCs), by 2031. However, AfT—which accounts for about one-fifth of official development assistance (ODA)—remains highly exposed to some difficult development assistance challenges.
ODA dropped seven percent in 2024. And this downward trend is accelerating, with the Organization for Economic Cooperation and Development (OECD) predicting ODA declines of between 10 percent and 18 percent during 2027. LDCs are expected to experience the sharpest falls—of between 13 percent and 25 percent—in 2025. Statistics for AfT specifically are also sobering. In 2023, AfT disbursements fell six percent—from $53bn in 2022 to $50bn in 2023.
Meanwhile, trade needs—from addressing proliferating standards to deepening digital trade cooperation and finding ways to boost investment—are mounting. Targeted support is required to help developing economies, especially smaller ones, meet their trade needs, realize emerging trade opportunities and gain a greater share in global trade.
Here are three ways we can help deliver on this, despite a challenging backdrop.
Maximum impact from resources
A wealth of knowledge on trade support has been generated over the years. So we have been working to capture experiences and lessons learned. One clear takeaway is that trade support should remain demand-driven, with tailored solutions helping translate global best practices into context-specific impact. For example, the Pacific Aid for Trade Strategy, which focuses on e-commerce, services and connectivity, has been helping to improve trade competitiveness in the region with limited available resources.
In addition, engaging local business remains vital for gaining real-time insights into the most pressing trade challenges, and tapping much-needed finance. For example, the Next Innovation with Japan Initiative has been providing venture capital to help startups in developing countries create new industries and jobs. Having access to information about best practices in trade negotiations and the implementation of trade rules can also be a game changer for policymakers in developing countries.
Don Stephenson, trade and investment advisor to the Expert Deployment Mechanism for Trade and Development, made the point very well when he said: “Many trade development needs require large investments—to build trade infrastructure like ports and roads, or to increase productive capacity, such as through building factories. These investments must involve the private sector, where the big money is. But sometimes the development gap is knowledge. This is something that can be delivered through investments which are relatively small but that have a large impact.”
WTO’s trade support
The WTO’s technical assistance can play an important role here. Targeted and nimble trade support can help developing economies implement what’s been agreed and gain insights on the latest trade trends. Against a backdrop of declining resources, WTO members are exchanging ideas on how to do more with less, including by building strategic partnerships with international organizations, development agencies and academic institutions.
During my conversations with delegations, I often hear of the need for a one-stop shop for all trade support offered by the WTO. Another recurring suggestion is that we blend online training with face-to-face activities. Encouragingly, everyone agrees that focusing on the WTO’s most vulnerable members should remain central.
Rethink AfT
As we approach the WTO’s 14th Ministerial Conference and the 20th anniversary of the Aid for Trade Initiative next year, 2025 offers an excellent opportunity to reflect on where we are with trade development and where we would like to be. Australia and Barbados, for example, have put forward some ideas to revitalise Aid for Trade.
Over the past 20 years, $730bn has been invested in Aid for Trade to help developing economies, including LDCs, strengthen their capacity to trade. The vast majority of this—97 percent—has been directed at strengthening infrastructure and productive sectors. However, only three percent has been allocated to trade policy and regulations—areas that are crucial for helping create an enabling environment in developing economies for trade and investment.
Focusing more on channelling trade support toward trade policy and regulations is therefore one practical way we can bolster the integration of developing economies into the multilateral trading system. To explore more ideas on how to help smaller economies boost their share of global trade, join the conversation at the WTO Public Forum on Sept 18.
