US pushes for 'trade over aid' agenda, urging wealthier nations to rethink spending

The United States is expected to roll out an initiative encouraging high-income countries to scale back their aid spending this month.

New Zealand says it was approached by the US at the United Nations (UN) with a proposal for a scheme called "Trade Over Aid".

"New Zealand has been approached and is discussing the initiative with the US ahead of its launch," a foreign ministry spokesperson said.

UN Ambassador Mike Waltz delivered a speech to the US Senate Foreign Relations Committee last week, disclosing a policy shift where private sector development is prioritised over humanitarian support.

Waltz said the Trade Over Aid initiative would shift overall benefit back to the US.

"Americans ask, I think our family members, our constituents ask, is it worth it? Is their money being well spent?" he told senators.

"On the development side, we are heavily engaging the private sector. Let's lower barriers to capital, drive foreign investment, and create jobs, not dependency."

In his speech, he decried a kind of relationship with developing countries where they receive aid, but in turn do little to support the US.

"In 2023, sub-Saharan African nations voted with the United States only 29 percent of the time on key UN resolutions, despite receiving over billions and billions in assistance since 1991."

The Trump administration has actively withdrawn from numerous US-led initiatives, particularly around climate and environmental protection, including the Secretariat of the Pacific Regional Environment Programme (SPREP).

Waltz said these amounted to "costly ideological agendas" that are "failing Sustainable Development Goals instead of focusing on the basics".

"If the United States is going to be the largest funder, the biggest bill payer of their hard-earned money towards the UN, the UN must work for American interests." he said.

On April 14th, development platform Devex reported the content of a circular sent to UN states inviting their support

"Government aid has been flowing from developed to developing countries with only limited impact," the note reportedly read.

"It has not solved the world's economic development challenges, and it has often created dependency, inefficiency, and corruption."

Devex reported nations were being invited to sign a declaration of principles, including that "free market policies provide the surest route to economic prosperity" and that "multilateral organisations can be helping in a supporting role to sovereign nations implementing free-market reforms".

It echoed a sentiment laid out in remarks from Bureau of African Affairs official Mark Checker in January.

"For decades, our approach was defined by how much assistance we delivered, how quickly we could spend, and how many programs we could launch. In this administration, that era is over," he told a conference at the time.

"We are entering a new era - defined not by inputs, but outcomes; not by aid flows, but by economic growth; and not by dependency, but by mutually beneficial partnerships."

Three days later, a Washington Post report cited a cable sent to US Embassies around the world by Secretary of State Marco Rubio, discussing how the UN should be used to "promote America First values and create business opportunities for US companies".

Incoming US ambassador to New Zealand, Jared Novelly, has signalled this would be his top priority in the role, [https://www.rnz.co.nz/news/pacific/589143/minerals-and-military-incoming-us-ambassador-spells-out-vision-for-nz-and-pacific

with a particular focus on deep sea mining in the Cook Islands].

Meanwhile, the Organisation for Economic Cooperation and Development (OECD) has reported a "historic decline in foreign aid", where the US alone drove three-quarters of the decline.

Its Official Development Assistance (ODA) programme, which provides a standard for targeted aid spending, recorded a 29.1 percent decrease in bilateral grants, versus only a 10.3 percent decrease in loans.

New Zealand reportedly cut their ODA spend by 12.8 percent.