EU aid for trade progress report 2021 : review of progress on the implementation of the updated EU aid for trade strategy of 2017

The present report is the fourth EU Aid for Trade Progress Report under the updated EU Aid for Trade strategy, and is based on the responses to a questionnaire, completed this year by 98 EU Delegations around the world, and OECD/DAC data on Aid for Trade volumes. It illustrates the EU's contribution to the global Aid for Trade initiative. Altogether, the EU provides preferential treatment to 126 countries eligible for EU official development assistance (ODA), of which 54 through FTAs in force and 72 through one of the three types of GSP. Eight countries benefitting from a GSP scheme have also an FTA in force. As noted in the latest Report on the Generalised Scheme of Preferences covering the period 2018-2019, GSP+ beneficiaries have made progress in effective implementation of the 27 international conventions listed in the arrangement. This report comes at critical juncture when, due to COVID-19, progress towards the SDGs has slowed, with poverty increasing for the first time in 20 years. On average, GDP in developing countries is projected to be about 7.5% lower in 2022 than what was expected before the COVID-19 crisis, with one out of four countries projected to experience a loss of more than 10%. Due to a decline in resources of USD 700 billion, and an increase in needs of USD 1 trillion to recover from COVID-19, the SDG funding gap in developing countries is projected to increase from USD 2.5 trillion pre-COVID to USD 4.2 trillion a year for the foreseeable future, a 70% increase. The impact of the global pandemic on trade has been dramatic. EU27 imports from developing countries declined by almost EUR 100 billion (-16%) from EUR 621.6 billion to EUR 522.9 billion between 2019 and 2020. Team Europe, i.e. the European Union and its Member States (with their development finance institutions and implementing agencies) as well as the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) acting together, reacted swiftly to counter the impact of COVID-19 on its partner developing countries. Renewed commitments were made as part of the new Team Europe approach, both in the Joint Communication on the Global EU Response to COVID-19 and in the Council Conclusions on Team Europe Global Response to COVID-19.