Turning ambition into action: making trade work for the most vulnerable
The international community has made steady progress towards achieving those ambitions since the programme's launch in 2022.
Xiangchen Zhang is the Deputy Director-General, World Trade Organisation (WTO). (Courtesy photo)
________________
We are now halfway through the 10-year United Nations Doha Programme of Action, which set out ambitious trade targets to help the world's least developed countries (LDCs) become more active players in global trade by 2031.
The international community has made steady progress towards achieving those ambitions since the programme's launch in 2022. At the same time, we have faced strong headwinds from prolonged geopolitical tensions and disruptions. The external environment has never been so challenging.
WTO members have responded to LDCs' calls for greater market access opportunities. Today, LDC exports enjoy duty free access to destination markets with simple and transparent rules of origin. LDC services and service suppliers benefit from opportunities in services trade.
Policy flexibilities are also available to LDCs to integrate trade rules. And in recent years, WTO members have taken important steps towards enabling countries' smooth transition out of the LDC category.
In addition to this progress, over the past twenty years, LDCs have also received over $223b in trade-related development assistance to build infrastructure and strengthen productive sectors that help them benefit more from global trade. And trade capacity-building initiatives continue to provide much-needed support for trade integration. Earlier this year, we welcomed the launch of the third phase of the Enhanced Integrated Framework.
While we have some success stories to share, progress remains uneven. LDCs' exports still account for only 1.04% of the world's merchandise exports. LDCs' share in global services exports is 0.5%, and their share in digitally delivered services is 0.2%. Too many people living in LDCs are yet to fully realize their trade potential. This needs to change.
And our road is becoming bumpier by the day. While we see new opportunities on the horizon, there are also new risks. Over a quarter of the official development assistance (ODA) to LDCs was cut last year. Mounting pressure on aid budgets creates uncertainty for Aid for Trade, which represents around one-fifth of total ODA. We therefore face a choice.
Shield trade support from competing demands
The global ambition is to double Aid for Trade to LDCs between 2018 and 2031. Over the past five years, disbursements have grown 1.2%, while commitments have fallen by 5%. This declining trend is cause for concern.
LDCs are also struggling to attract finance from elsewhere. In 2024, they received just 13% of non-concessional trade-related development finance, and only 7% of private finance mobilised for trade. Their share of total foreign direct investment remains around 2.5%.
These figures show that in vulnerable contexts, private finance cannot replace concessional support. On the contrary, it is often concessional resources that make private investment possible. They help us to prepare projects, reduce risks and create an enabling environment for trade and investment.
In some cases, these efforts are already under way. In Zambia, cooperation with China has enabled the construction of corn flour processing plants, adding greater value locally and creating better jobs. In Togo, improvements in the soybean sector – including through Enhanced Integrated Framework support – have helped attract $25m for a modern soybean processing facility.
The answer therefore is not a choice between aid or investment. It is aid that mobilises investment. It is not public or private finance. It is partnership that makes both work harder. Cutting targeted trade support would derail years of hard-won progress.
Focus on knowledge gaps in trade policy
Targeted programmes – ranging from China's Programme for LDCs to the day-to-day support that the United Kingdom’s Trade Advocacy Fund offers the WTO's LDC Group – have helped LDCs participate more effectively in the work of the WTO.
LDCs' greater engagement in the WTO has produced results. Since 2022, WTO members have adopted four decisions in response to LDCs' requests. These include two aimed at supporting their smooth transition out of the LDC category – a central priority for the LDC Group.
WTO technical assistance has also played an important role. Since 2022, over 16,600 participants from 42 LDCs have received training on WTO rules and their implementation. These small yet highly impactful trade support programmes give countries the knowledge to negotiate, the capacity to implement and the confidence to lead. Yet these are precisely the programmes that shrinking aid budgets could place at risk.
Rethink negotiating strategies
While large groups of members have been exploring new rules, LDCs' participation in those discussions has been mixed. For example, only five LDCs out of 70 members are part of the Agreement on Electronic Commerce, which aims at ensuring an enabling environment for digital trade. At the same time, we see more interest from LDCs in investment facilitation, with 27 LDCs joining the Investment Facilitation for Development Agreement.
For too long, LDCs have focused on their defensive interests – how to protect themselves from new obligations and implementation challenges. These concerns are real. But more efforts are required to help LDCs also identify their emerging trade priorities and the opportunities they bring. This means moving from asking "What risks must we avoid?" to "What opportunities must we seize?"
As members explore ways to reform the WTO, empowering every country to help negotiate the future of trade is perhaps the most impactful approach. Stronger partnerships for trade support will remain vital for these efforts.
The Writer is the Deputy Director-General, World Trade Organisation (WTO)