A communications statement announces that the planned European Union assistance for impoverished nations falls short of its intended goals for trade enhancement
The European Union (EU) has been actively supporting developing countries in building trade capacities and infrastructure since the launch of the "Aid for Trade" initiative by the World Trade Organization in 2005. However, a new report from the European Court of Auditors (ECA) raises concerns about the effectiveness of the EU's trade aid strategy, particularly in relation to least developed countries (LDCs).
LDCs face significant barriers to accessing regional and global markets. These include limited production capacities, regulatory, administrative, and governance trade barriers, a weak business environment, poor infrastructure, lack of functional standardization and export certification systems, unstable institutional frameworks, and difficult and costly access to finance for the private sector. Despite these challenges, LDCs account for only 1% of global exports and less than 2% of global GDP, with over 75% of their population living in poverty.
The EU adopted its own trade aid strategy in 2007, updated in 2017, aiming to gradually increase the share of EU and member states' joint trade aid for LDCs to 25% by 2030. However, the share of trade aid for LDCs has decreased from 18% (2010-2015) to 12% in 2022. The European Commission has not conducted a detailed analysis of the reasons for this decline.
The ECA's special report 17/2025, "EU Trade Aid for the Least Developed Countries," highlights that the EU's trade aid program operates in a complex environment with many stakeholders. Coordinated implementation at all levels and strong local ownership are key to its success. The report also suggests that the target should be reassessed to determine if it is still appropriate and if an action plan with specific and realistic milestones should be established.
The ECA found that the projects covered in the audit, which were in Rwanda, Malawi, Angola, and Cambodia between 2017 and 2024, were successfully implemented and generally contributed to increasing the countries' trade potential. However, the overall impact of EU support on the economies of the countries involved in the projects is patchy.
The EU and its member states provided €17.2 billion for LDCs under the trade aid program between 2017 and 2022, which is only a fraction of the €105.8 billion provided to other developing countries. The auditors call for better coordination between EU delegations in recipient countries and those with regional responsibilities to ensure support aligns with each country's specific needs.
As of now, 44 countries are classified as LDCs, home to around 880 million people, or 12% of the world's population. The ECA's report states that it is very unlikely that the EU will reach its 2030 funding target for LDCs. The responsible parties for the initially allocated funds in the EU trade subsidy strategy for poor countries belong to the 27 EU member states.
The ECA's press office can be contacted at [email protected] for further information. The full report is available on the European Court of Auditors' website.
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