Aid for Trade

Market in Dosso

Farmers in Africa should be able to sell their products on the European market, but many of them fail to export their products to Europe due to inadequate infrastructures, because they do not know how to go about it, or because European quality standards are too severe.

Belgium’s Aid for Trade strategy is intended to help developing countries benefit from the markets available to them. At the same time, such aid must allay any negative consequences of trade liberalisation. This was what prompted the Belgian minister for development cooperation to approve Belgium’s Aid for Trade Strategy in June 2008.

Why this commitment by Belgium?

Back in 2005, at the World Trade Organisation conference in Hong Kong, the European Union pledged to spend €2 billion per annum on trade-related aid starting from 2010. In October 2007, that commitment took the form of a European Aid for Trade Strategy.

Naturally, Belgium wants to do its bit in honouring that pledge. Over the past few years Belgian Aid for Trade has risen substantially, requiring a more structural approach. At the same time, the Aid for Trade debate has gained momentum through the negotiations on Economic Partnership Agreements (EPAs). The Africa, Caribbean and Pacific (ACP) countries with which the EU is negotiating free trade agreements are waiting for funds to implement the EPAs and make their economies more competitive. In this context, Belgium wants to help by putting together so-called ‘Aid for Trade packages’. The aim of these packages will be to make sure that the Aid for Trade provided by the EU Member States and by the European Commission is better coordinated. In short, the packages are designed to meet the needs arising for EPAs.

Specifics about Belgium’s strategy

The key principles behind Belgium’s strategy are aid efficiency and smooth coordination between the respective donors. The point of departure is this question: how can trade help in the fight against poverty? Belgium intends to focus its help on institutional cooperation (supporting the governments of developing countries) and boosting the capacity of small farmers. Aid for Trade will be a focus of interest in priority sectors like agriculture and infrastructure. In addition to bilateral aid, the efforts of NGOs and multilateral development cooperation will also be important.

A number of specific actions

In early 2009, while on a mission in Tanzania, Minister of Development Cooperation Charles Michel signed a cooperation agreement with the East African Community (EAC). Besides Kenya, 4 partner countries of Belgian Development Cooperation belong to this regional economic community: Burundi, Rwanda, Uganda and Tanzania. South-South trade could become a key instrument for the region’s development. Furthermore, Belgium - together with its British counterparts - is helping Burundi, in particular, to integrate its economy into the EAC.

Since 2008, Belgium has been a donor in the Enhanced Integrated Framework. This multilateral mechanism ensures that trade needs are integrated in the partner countries’ development strategies. This approach enables a holistic view of development in which trade is not the mainstay of development, but an important aspect that can contribute towards economic growth and a better redistribution of resources.

Trade for Development Centre

Finally, the former Fair Trade Centre is to be transformed into a Trade for Development Centre. This entails an extension of the centre’s mandate, so as well as being involved in existing fair-trade-related activities, it will also supply expertise for programmes in partner countries, thus integrating the trade aspect into bilateral development cooperation.

 A Belgian Aid for Trade strategy (PDF, 459.06 KB) (in Dutch)