Trade and development

Snapshot

Man and woman in store.

Trade is essential for economic growth.

The potential benefits of trade for promoting sustainable economic development and reducing poverty are enormous. Trade is not just the domain of large, multinational companies. In one way or another, every single person is involved in trade-related activities each day, from buying the newspaper at a local store to importing container loads of products.

According to the Millennium Project's Task Force on Trade, international trade can be a powerful tool to reduce poverty. However it is not a solution in itself. Trade programmes must be accompanied by addressing the other root causes of development issues.

NZAID priorities

NZAID's Trade and Development Policy recognises that developing countries face challenges in making trade work for development - both from the policies and behaviour or other countries and their own domestic contstraints. NZAID takes a dual approach. Firstly, NZAID engages on international policy issues so our partners reap the benefits from a fairer international trading system. Secondly, NZAID supports programmes that address domestic challenges, such as the skills and knowledge to negotiate and implement trade committments, and the capacity of producers to engage in local, regional and international trade.

The priority areas for NZAID's trade-related programming are:

accessing the benefits of multilateral and regional trade processes
supporting the capacity of institutions and people in developing countries on trade issues
strengthening the supply-side of trade and market linkages so that communities are able to reap a greater benefit from trade.

Accessing the benefits of multilateral and regional trade processes

NZAID supports international agencies that work directly with developing countries to participate in multilateral and regional trade fora. For example NZAID is providing core funding to the Agency for International Trade Information and Cooperation (AITIC). AITIC provides regular updates, training, advisory services and research to less-advantaged countries with respect to World Trade Organisation issues.

Supporting institutional and human capacity on trade issues

NZAID supports measures that assist developing countries to formulate appropriate trade policy and implement it effectively.

Developing countries face challenges to meet quarantine in export markets. Slow or bureaucractic customs procedures can also hamper trade and make it more costly. NZAID supports activities that aim to facilitate trade, including efforts to enable developing country procedures (particularly in the agricultural and food sectors) to meet trading partners' quarantine requirements and to streamline customs procedures.

Implementing other international commitments can also be important to trade prospects, including in areas such as worker rights (particularly as consumers become more attuned to ethical issues).

Examples of programmes in these areas include:

the Regional Trade Facilitation Programme in the Pacific to build national knowledge and capacity in quarantine, customs and product standards
work with government agencies in the Greater Mekong Sub-region to identify, monitor, and control diseases and pests in agricultural exports
supporting the International Labour Organisation in Cambodia to improve the garment industry's compliance with labour rights and disputes resolution.

NZAID is also exploring ways to support private sector, unions, community groups and media in Pacific Island countries to better participate in the development of the trade policy.

Strengthening the supply-side and market linkages

NZAID supports a range of programmes aimed at improving the competitiveness of businesses and farms in partner countries. This can include their ability to add-value to their products, to access market information and to meet importers and customer demands regarding quality and consistency of supply. NZAID targets community and rural producers, particularly in agriculture where increased trade has great potential to impact on income and livelihood opportunities. Trade promotion is another strand to improve linkages to markets. NZAID is also conscious that the general environment for business in the developing country can constrain the ability of local businesses to grow and be competitive, including the quality of infrastructure.

NZAID supported programmes contribute towards:

improved capacity and adding greater value - to upskill producers in partner countries and allow businesses to diversify into higher value production, including through Fair Trade and organically certified products. Examples include support to agribusiness projects in Cambodia, and in Papua New Guinea support to Bris Kanda, an organisation that aims to build commercially productive partnerships between rural communities and service providers
trade promotion - NZAID spports the Pacific Islands Trade and Investment Commission to promote Pacific exports into New Zealand and investment and tourism into Pacific island economies. NZAID also supports efforts to build consumer awareness of Fair Trade
a better environment for doing business - NZAID supports partner countries to reduce the costs of doing business and improve the regulatory and legal environment. Regional organisations in the Pacific (the World Bank's Foreign Investment Advisory Service and Private Enterprise Partnership Pacific) and Asia (Private Sector Development Facilities in the Mekong and Indonesia) are key partners in this work
improved infrastructure - NZAID supports infrastructure development in some bilateral programmes, such as rehabilatating roads and bridges in Solomon Islands. NZAID also contributes to the Pacific Regional Infrastructure Facility (PRIF), a new multi-donor initiative to boost investment in infrastructure in the region.

return to | NZAID's priorities