Aid for Trade at a crossroads

This working paper examines how the global economic and geopolitical context is reshaping trade and development co-operation dynamics, highlighting potential implications and opportunities for Aid for Trade. Amid rising trade tensions and the ongoing reform of the financing for development architecture, it highlights the potential of using Aid for Trade to help emerging markets and developing economies seize new opportunities in global value chains, and contribute to the ongoing sustainability and digital transformations. It reviews recent efforts by development co-operation providers to reinforce synergies between trade and development co-operation, and identifies opportunities to build comprehensive partnerships aligned with partner country priorities along a development co-operation – trade nexus. The paper explores the merits of updating the scope and measurement of Aid for Trade to better reflect diverse forms of support and maximise the impact of the initiative.