The world’s least developed countries (LDCs) make up 12 percent of the global population but account for less than one percent of global trade. Expanding trade regionally and internationally is critical for many of the smallest and poorest developing countries, where local demand is too weak to support rapid expansion of production, employment, and incomes.
Trade and investment are powerful engines that drive economic growth and reduce poverty. By trading with other countries and attracting foreign investment, countries can take advantage of global market forces--competition, human resource development, technology transfer, and technological innovation—that generate growth. Also, participation in the rules-based international trading system reinforces good governance and strengthens legal and institutional reforms.
USAID’s Strategy, “Building Trade Capacity in the Developing World” outlines the Agency's approach to integrating developing countries into the international trading system into three areas:
- Encourage countries to participate in trade negotiations by building negotiators’ capacity to understand and analyze the issues in complex trade talks and agreements
- Help countries implement trade agreements that may require reforms to institutions, rules, and regulations plus increased coordination, information management, and oversight
- Prepare countries to respond to and benefit from trade opportunities by enhancing countries’ competitiveness—from helping governments create a competitive enabling environment to supporting local enterprises
USAID works to help partner countries reform their trading systems and build their capacity for trade.
- USAID provides Trade Capacity Building (TCB) to over 110 countries, maintains a database of U.S. Government trade activities, and provides technical assistance to Missions through TCBoost.
- Recognizing that reducing transportation costs significantly increases incomes, USAID programs in Georgia, Macedonia, Afghanistan, Egypt, Guatemala, and Ghana have cut the average time to ship, process, and deliver goods by an average of 31 days.
- USAID has helped Vietnam, Ukraine, and Cape Verde become full members to the World Trade Organization (WTO), allowing them to take advantage of lower trade barriers and helping reinforce good governance through WTO Agreements on intellectual property rights and international standards.
For more information on Trade and Investment check out our Trade and Investment Resources page.