U.S. Government Trade-Related Assistance Programs

Review of the Monterrey Consensus on Financing for Development
Review Session on International Trade as an Engine for Development

The U.S. has since 2002 significantly increased its provision of Trade Capacity Building (TCB) assistance. This assistance is aimed at helping developing countries take advantage of the opportunities of the global trading system, and, more broadly, to harness trade as an engine of growth. The U.S. has more than doubled its annual TCB spending since 2001, resulting in aggregate outlays of nearly $7 billion in grants. USAID and the Millennium Challenge Corporation (MCC) are the two largest U.S. providers of TCB.

U.S. TCB has also benefitted from changes in the way that U.S. assistance is delivered by supporting partner country ownership, promoting best practices to improve aid effectiveness, and leveraging private resources. In particular:

• The U.S. established the MCC in 2004 to focus resources where sound economic policies and good governance provide an enabling environment for economic growth. MCC has committed nearly $6 billion in grants: $5.5 billion for compacts with 16 countries and has approved 18 threshold programs totaling some $400 million. More than $3.2 billion in being invested in trade-related assistance. MCC projects include significant infrastructure investments. These programs use development frameworks and program designs that are initiated and implemented by developing countries and ensure civil society participation.
• USAID has field operations in more than 70 countries and operates programs across the full range of trade-related assistance, from agricultural development to building productive capacity to building supportive economic and regulatory environments. USAID support for trade capacity building has reached $3.6 billion since 2001.
• Governmental assistance is only a piece of the development pictures. The United States has actively engaged the private sector in development partnerships, including to multiply the impact of official development assistance.
• For example, through the USAID’s Global Development Alliance (GDA), the U.S. leverage additional financing for development through partnerships with governments, businesses, foundations, and other non-governmental organizations. Through more than 600 alliances with over 1,700 partners, $2.1 billion in U.S. government resources has generated $5.8 billion in private resources.
• By promoting reforms to improve the business enabling environment, including access to finance, the U.S. assists developing countries in expanding opportunities for the private sector to succeed. 

Issue Paper: Review Session on International Trade as an Engine of Growth for Development