U.S. urges nations to back ‘trade over aid’ plan as UN warns against privatizing assistance

The United Nations logo is seen inside the 79th session of the United Nations General Assembly, Tuesday, Sept. 24, 2024. (AP Photo/Pamela Smith, File)

WASHINGTON — The U.S. is urging other nations to back a “trade over aid” initiative at the United Nations as part of the Trump administration’s broader shift away from donor-focused development assistance and toward greater private investment.

The UN is warning against privatizing a global aid system that delivers crucial assistance to some of the world’s most vulnerable populations.

Ahead of the initiative being formally introduced at the UN at the end of April, U.S. Secretary of State Marco Rubio has ordered all U.S. diplomats to deliver a call to action to high-level foreign officials to sign on with their support by Monday, according to a diplomatic cable sent this week and obtained by The Associated Press.

According to the directive, the “Trade Over Aid Initiative” is meant to encourage UN member states to “make pro-business reforms” to their aid processes by facilitating conversations between governments, the private sector and international organizations.

The proposal also calls for “free market” policies to attract foreign trade that include “limited regulation, low taxation, multiple energy sources, private property rights, sanctity of contracts, and a trusted judiciary.”

“The idea that trade and free market capitalism is the surest path to prosperity has been proven by the facts and by history,” said Tommy Pigott, a State Department spokesman. “The U.S. remains the most generous country in the history of the world, but those arguing for ‘aid not trade’ are really arguing for lining the pockets of a corrupt NGO industrial complex.”

While signing on to the proposal is nonbinding and does not create obligations or require changes to national laws, it would reflect global opinion on the increasingly dire global aid situation as powerful countries like the U.S., the United Kingdom and others have decreased funding for humanitarian aid and increased their nations’ defense spending.

The latest move is also seen by the UN and other international organizations as further abandoning the aid system at a moment of growing conflicts around the world, while increasing the risk of exploitation by for-profit companies.

Despite the U.S. effort, the United Nations is committed to putting in place its sustainable development agenda by 2030, UN spokesperson Stephane Dujarric said, which includes ending poverty, achieving gender equality and urgently tackling climate change.

“For us, trade, investment, and private sector engagement can be powerful drivers of inclusive growth and job creation,” he told AP. “They should, however, not be used to substitute international development cooperation or for principled humanitarian assistance.”

Eric Pelofsky, who served at the U.S. State Department under the Barack Obama and George W. Bush administrations, blasted the effort in a statement, saying that “there’s no American who looks at a picture of a starving child and sees an opportunity for companies to enrich themselves.”

“That’s because Americans have historically run to the fire to help rather than looking for ways to sell fire hoses to those suffering,” according to a statement from Pelofsky, now an executive at the Rockefeller Foundation. “This approach betrays America’s traditions, values, and national security interests — and it makes us less safe.”

Devex, a news organization covering global development, earlier reported details of the initiative and The Washington Post earlier reported on the cable.

The initiative builds on the Trump administration’s pattern over the last year of pulling back from organizations that promote global cooperation. Since taking office in January 2025, the administration has suspended support for agencies like the World Health Organization, the UN Human Rights Council and the UN cultural agency UNESCO.

The Trump administration also dismantled the U.S. Agency for International Development, while taking a larger, à la carte approach to paying dues to the United Nations, picking which operations and agencies it believes align with Trump’s agenda and avoiding those that no longer serve U.S. interests.

In December, U.S. officials announced a US$2 billion pledge for UN humanitarian aid, a small fraction of past contributions but a reflection of what the administration says is still a generous amount that will maintain America’s status as the world’s largest humanitarian donor.

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Amiri reported from New York.

Farnoush Amiri And Matthew Lee, The Associated Press