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Rich members of the World Trade Organization (WTO) offered new assistance to the least developed countries (LDCs) at the organization's ongoing Sixth Ministerial Conference, but it is seen as "charity with strings attached."
The generous packages of "Aid for Trade," offered by some industrialized countries at the Hong Kong meeting, "sweeten a deal in order to entice developing countries into accepting a bad deal, " said Yashpal Tandon, executive director of the Geneva-based South Center, an inter-governmental policy and research think-tank.
"A careful scrutiny of the 'Aid for Trade' ...suggests that developed countries would use it to lure developing countries into undertaking ambitious trade liberalization commitments whose economic and policy costs would be many times higher than what they would gain from aid," he said.
Japan announced Tuesday that it would spend US$10 billion over the next three years on "Aid for Trade," a program of the trade-related assistance, which aims to help developing countries enhance their capability to trade.
On the same day, the European Union (EU) said it would increase its contribution to the "Aid for Trade" from 400 million Euros to 20 billion Euros by 2010.
The promises were followed by the US announcement to double its annual trade-related assistance from US$1.3 billion to US$2.7 billion by 2010.
However, the three donors all conditioned their aid on market opening in the developing countries.
"Funds and the additional money I announced must go hand-in-hand with market access expansion and the elimination of trade-distorting subsidies," said US Trade Representative Rob Portman.
Therefore, the recipients considered the proposed packages to be a "trade off" to developing countries' interest and called for predictable, secure and long-term assistance.
Rwandan Finance Minister Paul Manasseh Nashuti, who is attending the December 13 to 18 WTO meeting, stated that the "Aid for Trade" should not prejudice developing countries' and the LDCs' demands in Hong Kong and should be given in the form of grants.
"The majority of developing countries have not been able to take advantage of the potential benefits of international trade because of their lack of trading opportunities, underdeveloped trading infrastructure, and inability to meet technical standards in high value markets," said Rashid Kaukab, coordinator of the South Center Trade and Development Program.
Ministers from WTO's 149 members met here Tuesday in a new bid to advance the Doha Round talks, which bogged down in a deadlock over farm subsidies, pitting mainly rich countries against poor ones.
(Xinhua News Agency December 16, 2005)
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