Poor nations leery of U.S. 'aid for trade'

When U.S. and European delegates at the global trade talks here say they're working hard to help the poorest countries climb the ladder of wealth, it's hard to take them at their word.

The World Trade Organization bargaining table, after all, is where nations fight for every scrap of advantage - not where they hand out charity.

And yet, that's exactly what the U.S. did Wednesday.

The U.S. pledged to more than double its "aid for trade" to help poor countries build roads, ports and communications system so they can join the global market. The U.S. said it will make $2.7 billion in grants annually by 2010, up from $1.3 billion in 2005. The 2005 figure is up 40 percent from 2004, and more than any other country.

"This is consistent with the priority the United States has given to providing developing countries with the tools to benefit from the global trading system," the U.S. said.

But this charity comes with strings attached. Some developing countries saw the aid-for-trade money as a blatant sweetener, if not a bribe, to get them to make concessions on agriculture, the big obstacle to a new round of reductions in global trade barriers. They said the money is unlikely to buy the U.S. or European Union a deal.

"I don't see it as a bribe," said Trevor Clarke, WTO ambassador from Barbados. But, he added, "I will certainly not be arm-twisted. Aid is secondary to negotiating rules that are favorable and in the interest of my country."

Barbados is among the so-called "Small, Vulnerable Economies,"
countries that are struggling and even sliding backward under the WTO's current trade rules. Lacking some basic economic infrastructure, they aren't gaining much from expanded world trade. More than 20 of these nations - from Sri Lanka to Guatemala - have come together to push for what they want in a trade deal.

Their agenda differs from the higher-profile Group of 20, composed of advanced developing economies, such as China, India and Brazil that have seen exports take off, thanks to WTO's liberalization of trade rules.

The small, vulnerable economies oppose a provision that would require them to negotiate on allowing foreign companies into their services sectors, including energy, finance and communications.

"We don't want somebody to say what we have to negotiate on," said Petrus Gompton, foreign affairs and trade minister for Saint Lucia, another of the small, vulnerable economies (or SVE's in WTO lingo). "If there's no deal on that, we'll have to decide if there's any deal at all."

U.S. and EU delegates say they're working hard to help poor countries reap the riches of trade.

But negotiators need to gain at least as much as they give away, or the deal won't sell to the hundreds of lobbyists who attend these talks as advisers - let alone to their national lawmakers.

So while they give money, it remains to be seen if rich-country negotiators can give poor countries what they really want.