WASHINGTON (AP) — The United Nations is warning against privatizing a global aid system that delivers crucial assistance to some of the world's most vulnerable populations, as the United States urges other nations to back a "trade over aid" initiative that would shift development assistance toward greater private investment and away from traditional donor-focused programs.
Ahead of the initiative being formally introduced at the U.N. later this month, 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 U.N. member states to "make pro-business reforms" to their aid processes by facilitating conversations between governments, the private sector and international organizations.
What the Proposal Demands
The proposal 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." 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 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."
UN and Experts Push Back
The latest move is seen by the U.N. 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, U.N. 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 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."
Pattern of Withdrawal from Global Cooperation
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 U.N. Human Rights Council and the U.N. 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 $2 billion pledge for U.N. 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. Devex, a news organization covering global development, earlier reported details of the initiative and The Washington Post earlier reported on the cable.
Why This Matters:
The debate over privatizing humanitarian aid comes at a critical moment when conflicts are multiplying worldwide and vulnerable populations face unprecedented need. The push to replace traditional development assistance with market-based approaches raises fundamental questions about who benefits from aid systems and whether profit motives can coexist with the protection of the world's most vulnerable people. The UN's warnings reflect concerns that privatization could prioritize corporate returns over human welfare, while the dismantling of established aid institutions threatens the coordinated global response needed to address poverty, gender inequality, and climate change by 2030. As major donors reduce humanitarian funding while increasing defense spending, the shift toward private sector-driven aid risks leaving the most marginalized communities without the protections and accountability that public institutions and international cooperation have historically provided.