The African Perspective on Policy Trends and Issue

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Africa and the WTO Negotiations : 

Africa and the WTO Negotiations Amal Nagah Elbeshbishi African Trade Policy Centre Trade and Regional Integration Division (UNECA)

Outline: 

Outline Background. The Doha Round. The Cancun Ministerial Conference. What Happened in Hong Kong? African Countries Concerns. Recommendation for African Countries. How ECA Helps in These Issues?

I. Background: 

I. Background Since the 1990s, African countries have shown more interest in participating in multilateral trade negotiations. Relative to the situation in previous trade rounds, more African countries have trade negotiators in Geneva. More African delegates attend the WTO Ministerial Conferences.

II. The Doha Round: 

II. The Doha Round In several rounds of multilateral trade negotiations African countries expressed concerns about the rules and operations of the multilateral trading system, and expressed their disappointment due to their marginalization in international trade. An attempt to address these concerns led to the declaration of the Doha Development Round that was launched in 2001.

Key Doha Promises to Developing Countries: 

Key Doha Promises to Developing Countries Significant progress on market access for agricultural and non-agricultural products for developing countries, as well as reduction of export subsidies and domestic support by developed countries. Dealing with tariff peaks and tariff escalation. Making Special & Differential (S&D) provisions more effective and operational. Accelerating the accession of Least Developed Countries (LDCs). Finding appropriate solutions to implementation concerns. Providing more technical assistance and capacity building programmes for developing countries.

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Has Doha’s Promise Been Fulfilled? The general consensus is that no significant progress has been made in fulfilling Doha’s promise to developing countries. Deadlines have been missed in all critical areas of the DDA.

III. The Cancun Ministerial Conference: 

III. The Cancun Ministerial Conference African countries stressed the need for the meeting to lead to significant progress in at least three areas of the negotiations if it is to be regarded as successful: Agriculture. Cotton. Non-Agricultural Market Access (NAMA). On Agriculture, they wanted more serious commitments from developed countries to reduce and/ or phase out domestic support, export subsidies, and other barriers to agricultural trade. They also wanted significant progress on market access for agricultural products.

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On Cotton, they made two key requests: Elimination of subsidies within a reasonable and specified period. Payment of compensation to the affected-countries during the transition period. On NAMA, they wanted more policy space to be able to pursue important industrialization and development objectives. They also wanted developed countries to reduce tariff peaks and tariff escalation, and they wanted significant progress on market access for non- agricultural products. No significant progress was made on each of these issues at the Cancun meeting, so the Cancun meeting failed due to the inflexibility on the part of some developing countries and the lack of political will by the EU and the US.

IV. What Happened in Hong Kong?: 

IV. What Happened in Hong Kong? The WTO Hong Kong ministerial meeting was a lost opportunity to make trade fairer for poor people around the world. Rich countries put their commercial interests before those of developing countries. Most of the difficult decisions were put off to a further meeting in 2006, but it is far from clear why rich countries that were unable to show the necessary leadership in Hong Kong will behave any differently later on.

Main Issues for African Countries in Hong Kong : 

Main Issues for African Countries in Hong Kong Market Access: African countries called for Policy Space and the application of the principle of proportionality in tariff reductions to enable them pursue policies supportive of their development goals. In the Hong Kong declaration there was no specific commitment in this area. They also called for concrete mechanisms and solutions to the problem of preference erosion. No new provisions or commitments were made on this in the declaration.

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Agriculture: The ministerial declaration contained some minor gains on agriculture. African countries called for the elimination of export subsidies on agricultural products by 2010. In the Hong Kong declaration export subsidies will be eliminated by 2013. On food aid, African countries wanted any new rules in this area to take account of the interests of recipient countries. In the declaration, there is a provision for the establishment of a Safe Box to ensure that emergency Food Aid is not disrupted.

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Cotton: In Hong Kong, days of hard bargaining saw the mood among the “cotton 4” group of Mali, Chad, Benin, and Burkina Faso, along with Senegal, they called for the total elimination of export subsidies on cotton by 31 December 2005 and domestic support by 1 January 2009. In the end, they achieved some limited progress. The Hong Kong declaration calls for elimination of all forms of export subsidies by developed countries in 2006 (although export subsidies make up only 10% of US subsidies for cotton for example). African countries asked for the setting up of an Emergency Fund to help cotton exporters cushion the impact of depressed cotton prices. They also called for more assistance to help them add value to their products. The declaration called on the Director General of the WTO to explore the possibility of establishing a mechanism to deal with income declines in the cotton sector. It also urged the development community to increase its cotton-specific assistance.

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Non- Agricultural Market Access (NAMA): Developed countries have pushed hard for a tariff reduction formula (known as a “simple Swiss Formula” , although its simplicity is relative), that cuts higher tariffs more than it cuts lower ones. This puts developing countries at a disadvantage since their tariffs are generally higher, and is in direct contradiction of the “less than full reciprocity” promised in Doha.

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Duty- Free, Quota- Free (DFQF) Market Access for LDCs: DFQF will be provided for all LDCs on a “lasting basis” by 2008 for at least 97 % of all products. The decision was a step back from the Doha mandate of full DFQF access, and much less generous than it sounds, as the key products of most LDCs will be exempted. Almost 94 % of tariff lines already enjoy access to the USA at low or zero tariff and in any case, LDCs tend to export a limited range of products. The USA insisted on a ceiling of 97% of tariff lines precisely because it allows it to protect its textile and garment sectors from imports from countries such as Bangladesh, Cambodia, and Nepal. That figure also allows Japan to continue to protect rice, fish, and leather goods and footwear.

V. African Countries Concerns: 

V. African Countries Concerns The system of negotiations does not give to delegations sufficient time to analyze the texts and confer with governments back in their capitals. The rules and operations of the multilateral trading system are regarded as unfair by African countries since they cannot set or influence the agenda and pace of negotiations. Another concern of African countries is the lack of capacity to participate effectively in the negotiations and to implement commitments made.

VI. Recommendation for African Countries: 

VI. Recommendation for African Countries The effectiveness of the African countries will be enhanced if there is better coordination among them. The exercise of coordination should start right from the stage of identification of interests and formulation of positions and stands. There may also be burden- sharing in preparations in specific areas and exchange of information, which will avoid duplication of efforts and ensure better utilization of their scarce resources.

VII. How ECA Helps in These Issues? : 

VII. How ECA Helps in These Issues? ECA helps by: Examining the current and emerging issues from the perspective of African countries and their implications for them; Developing the trade research (ex. ATPC working papers and technical studies), training and information dissemination capacity of African countries; Assisting African countries in preparing their own proposals in various areas in the WTO.

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Thank you for your Attention

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