Many developing countries lack the ability to effectively advance their interests in international trade negotiations. Consequently, the multilateral trading system continues to favour countries with strong economies and puts developing countries at a highly asymmetrical disadvantage. This unequal distribution of benefits often applies to bilateral trade agreements between industrialised and developing countries as well. In addition, developing countries often lack the capacities to overcome supply-side constraints and to effectively implement trade and investment promotion activities.

This being the case, the Aid for Trade initiative was launched at the Sixth Ministerial Conference of the World Trade Organisation (WTO) held in Hong Kong in 2005. The objective of the initiative is to support developing countries, particularly Least Developed Countries (LDCs), to better integrate into the multilateral trading system and to benefit from liberalized trade and increased market access. The European Union (EU) presented its “Strategy on Aid for Trade” in October 2007, pledging to increase Member States’ and European Commission’s collective spending on trade-related assistance to € 2 billion annually by 2010.

Against this background, BMZ aims at enhancing the quality and volume of trade-related assistance by integrating trade-related measures into German Development Cooperation programmes, particularly in the focal areas of sustainable economic development and rural development. In addition, BMZ strives to increase the coherence of trade and development policies in Germany and the EU by representing development policy interests in ongoing trade negotiations (e.g. WTO, EU-EPA etc.).