“Africa has the potential to earn from trade many times what it obtains in Official Development Assistance”
White Paper on Irish Aid

The Challenge

Sub-Saharan Africa attracts less than 3% of global foreign direct investment. Least developed countries’ share in global exports has fallen steadily from 3% in the 1950s to a current figure of around 0.5%.

Increased trade, regionally and globally, is central to sustained economic growth for the world’s Least Developed Countries. Africa has the potential to earn from trade many times what it obtains in Official Development Assistance.

Developing countries need assistance to enhance their capacity to produce, deliver and sell goods and services. The ability of a country to benefit from more liberalised trade depends on the strength and productivity of its domestic economy. Developing countries can be more vulnerable and may need more protection.

To be effective in combating poverty, pro-poor economic activity should be encouraged.

Ireland’s Response

Ireland responds to the trade needs of developing countries primarily through the EU and the WTO. It is the European Commission that negotiates at the WTO on behalf of all EU member states.

The creation of the WTO is the response of the international community to both the threats and opportunities of increasing globalisation. It offers members a forum to negotiate trade agreements, settle trade disputes and operate a system of trade rules.

The current WTO negotiations offer an opportunity for Ireland to help ensure that the poorest and weakest countries are not overwhelmed and marginalised but instead are able to put forward and defend their own interests, so that the outcome is a trading system that is just and equitable and provides the greatest opportunities for those most in need.

Aid for Trade
The aim of ‘Aid for Trade’ is to help developing countries, particularly the Least Developed Countries, to build their capacity to trade, to promote and protect their own interests in WTO negotiations, and to implement the WTO agreements reached. Aid Trade should also help developing countries cope the erosion of their preferential access to developed country markets, and it should be used to build the trade-related infrastructure necessary to compete successfully on global markets.

Fair and Ethical Trade
Ireland has played an important role in supporting capacity-building for small coffee producers in Central America through its funding for Fair trade Labelling Organisations International (FLO). It helped by changing the focus of the producers from marketing a product on a commodity basis to one of improving quality, producing specialist coffees, segmenting their market, identifying niche markets and converting to organic production. This integrated approach contributed to an increase in local employment and family welfare.

Last updated: 13/02/07