Target 8.A is the main trade-related target under MDG 8, and it is applicable to all developed and developing countries. Two other targets—Targets 8.B and 8.C—address the special needs of the least developed countries (LDCs) and landlocked (LLDCs) / small island developing states (SIDS) respectively.

One of the main vehicles for advancing progress towards the commitment to develop further an open rule-based multilateral trading system that delivers more benefits to developing countries is the Doha Round of the WTO. Since progress under the Round would be reached only through a ‘single undertaking’, any delay in completing the Round represents an obstacle to making progress against the Target. Even though repeated calls have been made at all forums, Member countries of the WTO are yet to agree on modalities that will help conclude the Round. In recent years, more emphasis has also been placed on addressing trade-capacity constraints in developing countries through the ‘aid for trade’ initiative, and through the Enhanced Integrated Framework for Trade-Related Technical Assistance to the LDCs.

Progress in Doha Round negotiations and the development agenda

In various international fora Heads of State and Ministers have reaffirmed that international trade is an engine for development and sustained economic growth. The fundamental strategy of the Doha Round has been to increase trading opportunities for developing countries by lowering trade barriers, particularly in developed markets. The failure to reach an agreement on the Doha Round represents a major delivery gap in strengthening the global partnership for the MDGs. The negotiations under the Doha Round are at an impasse. Since the last major push for a breakthrough collapsed in July 2008, WTO members have made repeated attempts to move the negotiations towards an endgame, but without success. Recent “stocktaking exercises” following the Seventh Ministerial Conference of the WTO held in Geneva, Switzerland, at the end of November 2009 have disappointed those hoping to build positive momentum.

During the Ministerial Conference, calls were made for concluding the Round with a strong pro-development impact, in particular with regard to issues of special interest to LDCs. All developing-country groups stated that anything short of a transparent, fair, equitable completion of the Doha Round would fail to eliminate the current imbalances in the multilateral trade system that have negative implications for poor countries. In the end, the goal set by the G-20 to conclude the negotiations in 2010 appears unrealizable, and no new deadline has been set. Differences persist on how to improve market access in agriculture and industrial goods, including by significantly reducing agricultural subsidies. In addition, developing-country requests to enhance special and differential treatment for their trade (such as permitting smaller tariff reductions) have remained unanswered.

G-20 leaders have underscored the need to move beyond the advocacy for trade and against protectionism by, inter alia, supporting negotiations with sufficient political will and ensuring coherence between international and national policy measures. But calls for redefining the level of ambition of the Round bring into question the level of political commitment to a development-oriented outcome.

There is a strong sense among some developing countries that the development dimension of negotiations has been put on the back burner. Likewise, some developing countries argue that their contributions to the multilateral tariff reductions would be greater than those of developed countries in any of the previous negotiating Rounds. Against this background, there is fear that a rush to conclude the Round in the near future might undermine the legitimate interests of developing countries. The aim should be to achieve significant and balanced progress in all areas of negotiation, particularly those important to development. On the other hand, further delay in concluding the Doha Round would signify further delay in reducing global farm subsidies; rebalancing WTO rules in a number of areas; and taking other steps that could open additional policy space for developing countries.

Aid for Trade (AfT)

AfT resources committed to assist low-income countries have increased significantly in 2008; however the allocation across regions and countries is still very uneven. In 2008, the largest share of AfT (40 per cent) was committed to lower middle income countries, while LDCs received just 25 per cent of total AfT commitments. The top 10 AfT recipients included just three LDCs. Although resources committed for AfT cannot be precisely measured through existing aid statistics, the OECD Creditor Reporting System (CRS) provides proxies for aid for trade interventions. The OECD is continually examining how this system may be improved to better track trade related interventions and the delivery of support to developing countries, in particular the LDCs. In terms of delivery, it should be noted that unlike the Integrated Framework for Trade- Related Technical Assistance (IF), for which a global fund was established, the AfT initiative has no specific funding structure at the global level and following the principles of the Paris Declaration on Aid Effectiveness is instead based on existing mechanisms. A monitoring mechanism was created based on the CRS and self-assessment of donors and partner countries to review progress regularly and assess where improvements are required in the financing and delivering of aid for trade. AfT regional reviews took place during the first two quarters of 2009 and the second AfT Global Review session took place in Geneva on 6-7 July 2009. A third AfT Global Review is being planned for mid-2011.