AIDING, TRADING OR ABETTING? THE FUTURE OF TRADE, AID AND SECURITY

This policy brief series by the International Institute for Sustainable Development (IISD) and IUCN examines the intersection of international trade, foreign aid, and security. It argues that current global trade rules and aid practices often exacerbate instability and conflict in developing countries by promoting economic dependence on volatile primary commodities, maintaining inequitable market access, and supporting unaccountable regimes. The document proposes a shift toward 'conflict-sensitive' policies, including the restriction of 'conflict resources,' the promotion of transparent natural resource revenue management, and the implementation of responsible business conduct to prevent the funding of violent conflicts.

• Current international trade rules are described as fundamentally inequitable and biased toward wealthy nations, often locking developing countries into a reliance on primary commodities with volatile prices. This economic vulnerability is linked to a higher risk of civil war, as the more a country relies on primary commodity exports, the higher the risk of conflict.
• Developed countries maintain market access barriers through quotas, tariff escalation, and complex sanitary and technical standards. Tariff escalation specifically applies low tariffs to raw commodities but higher rates to processed goods, which inhibits industrialization in developing nations.
• Agricultural subsidies in rich countries, estimated to cost developing nations up to US$72 billion annually, depress world prices and undercut the productivity of farmers in the developing world. This is exemplified by the U.S. Farm Bill of 2002, which was criticized for increasing trade-distorting subsidies.
• Foreign aid has historically been used in ways that can build the capacity of oppressive governments or ignore warnings of impending violence. The document cites Rwanda in 1994 as a case where aid actively built the capacities of a government that committed genocide.
• The 'resource curse' describes a phenomenon where countries with abundant natural resources often experience lower human development, higher corruption, and worse governance than those with diverse wealth. This is partly due to 'Dutch disease,' where a rise in resource export earnings makes other sectors of the economy uncompetitive.
• 'Conflict resources' are defined as natural resources whose trade in a context of violent conflict contributes to or benefits from serious violations of human rights and international law. The document notes that the ability of belligerents to access external markets is critical to the longevity of these conflicts.
• The Kimberley Process, which began on January 1, 2003, is a certification system designed to exclude conflict diamonds from world markets. While it has had some success, the document notes that sanctions on specific resources have generally seen limited success due to smuggling and inconsistent enforcement.
• Corporate complicity in conflict is highlighted through the example of Elf Aquitaine, which provided military assistance and loans to opposing sides in the Republic of Congo civil war to secure future oil rights. The document argues for a shift from purely voluntary corporate codes to robust legal regulations to end the 'climate of impunity.'
• Revenue management laws, such as those in São Tomé e Príncipe and Chad, aim to stabilize income and ensure transparency. However, these frameworks can be undermined by political interference and a lack of strong institutions.

APA

International Institute for Sustainable Development (2006). AIDING, TRADING OR ABETTING? THE FUTURE OF TRADE, AID AND SECURITY. https://www.iisd.org/system/files/publications/tas_objectives.pdf

Chicago

International Institute for Sustainable Development. AIDING, TRADING OR ABETTING? THE FUTURE OF TRADE, AID AND SECURITY. 2006. https://www.iisd.org/system/files/publications/tas_objectives.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=AIDING, TRADING OR ABETTING? THE FUTURE OF TRADE, AID AND SECURITY |date=2006 |url=https://www.iisd.org/system/files/publications/tas_objectives.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopment2006aiding, author = {{International Institute for Sustainable Development}}, title = {{AIDING, TRADING OR ABETTING? THE FUTURE OF TRADE, AID AND SECURITY}}, institution = {International Institute for Sustainable Development}, year = {2006}, url = {https://www.iisd.org/system/files/publications/tas_objectives.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }