Making Aid for Trade count: a negotiating strategy for LDCs

A trade agreement can open a market on paper without making it any easier for a firm to sell into it. If the road to the port is unreliable, a product cannot be tested against the buyer’s standards, or an exporter cannot obtain finance, a lower tariff may not get you very far.

That is the starting point for this paper, published in the ARTNeT Working Paper Series by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP). I wanted to explore how negotiators from least developed countries could use trade talks to secure practical support for overcoming the obstacles their businesses face.

Look beyond market access

My argument is that developing countries should not dismiss negotiations simply because the immediate market access gains look modest. Their participation has value, and they should arrive with a clear view of what they want in return. Aid for Trade offers scope to negotiate support that can turn trading opportunities into actual trade.

The paper distinguishes this approach from the familiar debate over special and differential treatment. Flexibilities and longer implementation periods have their place. But negotiators also need to ask what would help their producers compete: better transport links, credible testing and certification facilities, affordable digital connectivity, and access to trade finance.

Trade finance deserves particular attention. A small business may have a customer overseas and a perfectly viable order, yet still lack the credit needed to fulfil it. Support for local banks, export finance institutions and banking relationships can therefore matter just as much as commitments written into an agreement.

Preparation makes the difference

The practical lesson is to do the homework before tabling the request. Identify the constraint, show who it affects, explain what addressing it would cost, and substantiate the benefits. Work with businesses, development agencies and potential funding partners so that the proposal reflects a real need and has a credible route to delivery.

It also helps to understand the other side’s existing assistance programmes. A proposal that fits an established programme, has partners ready to contribute and advances objectives the donor already supports is easier to act on than a general appeal for more help.

None of this guarantees a favourable response. But a well-prepared, evidence-based request is harder to dismiss. The goal is to leave negotiations with commitments that help firms trade, rather than another set of opportunities they lack the means to use.

Read the paper

Negotiating strategies for LDCs to make the most of Aid for Trade, Simon Lacey, ARTNeT Working Paper No. 195 (2020).

Download the full paper (PDF) · View the publication at UNESCAP

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