That is the central aim of the Aid for Trade initiative. Despite the economic crisis, Aid for Trade donor contributions to help the less fortunate have risen 10 percent per year since 2005 and major donors are on track to meet or exceed their pledges for future funds. Several major countries have agreed to increase their contributions this year to building infrastructure, productive capacity and know-how in the developing world.
Aid for Trade, however, is no substitute for the market-opening opportunities and improved rules promised by the Doha round. WTO members have already agreed that rich countries — and developing countries that are in a position to do so — would open their markets completely to 97 percent of exports from the world’s poorest countries and dramatically reduce duties for those products where barriers remain.
As a result, cotton subsidies, which depress prices and displace African exports, would be sharply curtailed and cotton exports from poor countries would receive duty-free, quota-free treatment in rich-country markets. All trade-distorting farm subsidies would be slashed by 70 percent to 80 percent in the major subsidizing countries. New rules on streamlining customs procedures would sharply reduce transit times. We must make progress on this agenda.
What is frustrating is that we are tantalizingly close to a deal which, according to the Washington-based Peterson Institute for International Economics, would deliver global economic benefits of US$300 billion to US$700 billion annually, but to reap these benefits, we must close the deal. The next Ministerial Conference ought to signal that we are ready to do so.
Pascal Lamy is Director-General of the WTO.
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