Eurostep Weekly - Michel "happy" with aid for trade (26 November 2007)

Brussels, 26/11/07, (Eurostep): Louis Michel, the European commissioner for development and humanitarian aid, has described himself as "happy" that no plans for an international ‘aid for trade’ fund are under discussion at the moment.

Speaking to a meeting of the World Trade Organisation, Michel suggested it is preferable for international governments to focus on improving coordination between aid donors through joint analysis and joint programming, rather than through setting up new bodies.

Michel noted that during 2005, the European Union undertook to provide €2 billion per year by 2010 in aid to help poor countries become integrated into the global trading system. “We are delivering on these commitments,” he claimed, stating that on average the European Commission has given €880 million per year in aid for trade since 2001 and that EU member states have given an average of €370 million per year over the same period.

Michel acknowledged that much of this aid will be compensation for losses of revenue incurred when poor countries reduce the tariffs they levy on imports from poor countries. Paying such aid directly to the national exchequer of poor countries under a policy known as a budget support is a “particularly effective tool”, he contended.