Few phrases have exerted as much staying power—or done as much damage to development policy—as the tidy little mantra: “trade, not aid.” For decades, this slogan has captivated ideologues across the political spectrum, offering a deceptively simple prescription for growth. It has proved catchy, intuitive, and politically convenient—especially now, as international development institutions face funding cuts and closures.

But it has always been more seductive than sound.

Few phrases have exerted as much staying power—or done as much damage to development policy—as the tidy little mantra: “trade, not aid.” For decades, this slogan has captivated ideologues across the political spectrum, offering a deceptively simple prescription for growth. It has proved catchy, intuitive, and politically convenient—especially now, as international development institutions face funding cuts and closures.

But it has always been more seductive than sound.

With the U.S.-led reordering of global trade, the slogan now rings more hollow than ever. As rich countries turn inward, slashing foreign assistance in favor of defense and domestic priorities, some are wondering: What happens next? Many see an opportunity—if not an imperative—to rethink a vital but flawed international aid system.

At this arguably existential moment for global trade and development, it’s time to retire “trade, not aid” for good—not simply because it misdiagnoses the problem of underdevelopment, but because it distorts policymaking. Both aid and trade can contribute to development. But neither works when treated as a panacea.

As the world grapples with a seismic shift in U.S. trade policy, and as we bid the slogan good riddance, it’s worth tracing the illusions it spun—and the policy damage it enabled.

The phrase dates back to the early 1950s, apparently coined by American industrialist H.W. Prentis Jr. as a call to end postwar assistance to Europe. It resurfaced at the inaugural United Nations Conference on Trade and Development in 1964, where developing countries—backed by Argentine economist Raúl Prebisch—demanded a fairer global economic order. Prebisch argued that countries on the developing periphery faced structural disadvantages requiring preferential access to rich-country markets. At the same time, he presciently observed that “no fundamental solution can be expected from trade with the United States,” advocating internal reforms and South-South cooperation instead.

That nuance quickly vanished. In the following decades, policymakers reduced Prebisch’s ideas to import substitution industrialization—a strategy that encouraged domestic manufacturing behind protective tariffs. When that strategy faltered, in the wake of the 1970s oil shocks and the ensuing Latin American debt crisis, many saw its demise as proof that markets—not the state—should drive development. By the late 1980s, the Washington Consensus had enshrined trade liberalization as orthodoxy, elevating “trade, not aid” from bumper-sticker rhetoric to a central plank of U.S. foreign policy.

That logic underpinned much of the post-Cold War agenda. In 1993, President Bill Clinton declared that “trade pacts are more important than missiles.” President George W. Bush followed suit, saying in 2001, “The first place to start on the economic front is to make sure we have free and fair trade with the African continent.”

At the turn of the........

© Foreign Policy