Trade costs are a major influence on the pattern of global trade and can limit the extent to which countries are able to exploit their comparative advantages and market access opportunities for economic gain. High trade costs combined with a lack of supply-side capacity can therefore be an impediment to the ability of developing and least developed countries (LDCs) to participate in trade and develop economically. The good news is that measures can be taken to reduce trade costs and increase supply-side capacity. This will in turn enhance the ability of developing countries to engage in trade and thus uplift their economic status and performance. The Aid-for-Trade Initiative is aimed at linking donors and partner countries together in an effort to address these two issues in priority areas.

2015 marks ten years since the Aid-for-Trade Initiative was launched at the WTO’s Hong Kong Ministerial Conference in 2005. It is therefore an opportune time to revisit the rationale behind the initiative, examine its current status and review its impact on developing and least developed countries.

The aim of this paper is thus to provide some background regarding the Aid-for-Trade Initiative as well as to give an overview of its achievements, the challenges encountered in its implementation, and the opportunities that it provides for developing countries wishing to improve their capacity to trade through reduction of trade costs.

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