Replacing Aid with Trade – Isn’t Trade…. It’s Exploitation

Replacing Aid with Trade – Isn’t Trade…. Its Exploitation. “Trade over Aid” is the most recent direction from the U.S. Secretary of State to all U.S. Embassies – as reported by the Washington Post this past week.  This direction extends beyond the U.S.’s own diplomatic approach, with the Trump administration also pushing for a “trade over aid” declaration at the United Nations.  This model is presented as a pragmatic shift that prioritizes private enterprise over what it characterizes as a dependency-prone aid system. And, some might argue that trade has driven growth in every successful economy. But as a guiding principle for global development, the proposition is not only incomplete, it is fundamentally misguided.

Trade has tremendous impacts on economic growth. But it cannot substitute for aid, particularly in the world’s most fragile contexts. Markets do not emerge in a vacuum. They depend on functioning institutions, basic infrastructure, and a level of human development that allows people to participate meaningfully in economic life. These are precisely the conditions that development assistance is intended to support.

Without these foundations the benefits of expanded trade become purely one-sided. What, exactly, is being traded, and on whose terms?

In weak or struggling economies, there is a real risk that “trade” becomes less about mutual benefit and more about unequal access to resources and markets. In such cases, the line between partnership and exploitation can be hard to distinguish.

There is also a practical contradiction at the heart of the “trade over aid” proposition.

If aid is reduced or withdrawn, the conditions that make sustainable trade possible are undermined.

Put simply, one cannot prioritize trade where the enabling conditions for functioning markets have not been established. To suggest otherwise is to overlook the sequencing required for durable economic development.

For now at least, this is where Canada’s approach offers a more balanced alternative. Like many donors, Canada has placed greater emphasis on aligning development assistance with broader economic objectives. The language of partnership, mutual benefit, and private sector engagement is now firmly embedded in its international development policy. Canada maintains that aid and trade are complementary rather than competing tools.

In practice, this means using development assistance to strengthen the conditions for inclusive growth (supporting local enterprise, investing in skills, and building institutional capacity) so that trade can follow on more equitable and sustainable terms. Strong markets are built over time; they are not simply opened.  South Korea’s journey from post war destruction in the 60s to 11th largest economy today started with a long period of nation-building, community development, and large international aid contributions.

This approach has its challenges. Balancing national interest with principled development requires discipline, and there is always a risk of drift. However, it reflects a clearer understanding of how lasting economic relationships are formed.

A world of weakened development outcomes is not one that fosters robust trade. It is one marked by instability, limited opportunity, and heightened risk. Supporting development, therefore, is not simply an act of kindness or solidarity, but it is an investment in more reliable and resilient global markets.

Trade can and should play a central role in development.  The challenge is not to choose between aid and trade, but to connect them in ways that are coherent, effective, and grounded in both principle and long-term interest.

-Nicolas Moyer, CEO of Cuso International