Critic slams Australian aid-for-trade policy

AN Australian aid critic has slammed the Abbott government’s foreign policy that will see an increased in aid-for-trade in Pacific Island countries increase from 12.5 per cent to 20 per cent of the aid budget by 2020.

Adam Wolfenden, a trade justice campaigner for the Pacific Network on Globalisation (PANG), a Pacific based regional network that promotes economic self-determination and justice, said the focus was "the same wine in different bottles. "

"Aid-for-Trade, and its counterpart PACER-Plus, are really about ensuring that Pacific markets are open to Australian exports and securing Pacific engagement with the global economy on terms that disproportionately benefit the regions big brothers."

He said the Pacific had always traded and that would continue, but it must be in a way that supported their economic self-determination.

"Lining up the Australian aid program to complement the demands being made in a free trade agreement shows just whose interest this is all in." Mr Wolfenden said.

He argued that the policy argues that global trade was an engine for growth and development in the region. So using aid-for-trade to increase engagement with the global economy would see incomes rise and levels of poverty decline accordingly, he added.

Mr Wolfenden said however, according to Harvard University’s Dani Rodrik "essentially, there is no convincing evidence that trade liberalisation is predictably associated with subsequent economic growth" and that "the problem isn’t trade liberalisation per se, but the diversion of financial resources and political capital from more urgent and deserving developmental priorities".

The Aid-for-Trade policy is also being used as a bait for Pacific Island trade officials negotiating the regional trade agreement known as PACER-Plus.