WASHINGTON — The United States is pressing nations worldwide to embrace a "Trade Over Aid Initiative" that would fundamentally reshape international humanitarian assistance by prioritizing private investment and free market reforms over traditional donor-funded programs, according to a diplomatic cable obtained by The Associated Press. Secretary of State Marco Rubio has directed all U.S. diplomats to secure high-level foreign government support for the proposal by Monday, ahead of its formal introduction at the United Nations later this month.
The initiative represents a significant departure from conventional development assistance, advocating for U.N. member states to "make pro-business reforms" to their aid processes through enhanced cooperation between governments, the private sector, and international organizations. The proposal specifically calls for "free market" policies designed to attract foreign trade, including "limited regulation, low taxation, multiple energy sources, private property rights, sanctity of contracts, and a trusted judiciary."
The Market-Based Approach
"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. Pigott defended the shift by criticizing the current system, stating, "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.
UN Resistance and International Concerns
The United Nations has responded with caution, warning against what it views as the privatization of humanitarian assistance. U.N. spokesperson Stephane Dujarric emphasized the organization's commitment to its sustainable development agenda by 2030, 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," Dujarric told AP. "They should, however, not be used to substitute international development cooperation or for principled humanitarian assistance."
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.
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."
Broader Policy Realignment
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 Trade Over Aid Initiative represents a fundamental reassessment of how international assistance can most effectively address global poverty and instability. By emphasizing market-based solutions, property rights, and reduced regulatory burdens, the proposal challenges decades of donor-dependent aid structures that have often failed to generate sustainable economic growth in recipient nations. The initiative's focus on private investment and free market reforms reflects a recognition that entrepreneurship and trade create lasting prosperity more reliably than perpetual aid dependence. However, the timing coincides with reduced U.S. humanitarian funding and growing global conflicts, raising questions about whether market mechanisms can adequately address immediate humanitarian crises. The debate highlights tensions between those who view traditional aid systems as inefficient and potentially corrupt versus those who fear that profit-driven approaches may inadequately serve the world's most vulnerable populations during emergencies.