Is Africa Going to Benefit from HongKong

Is Africa Going to Benefit from Hong Kong?: 

Is Africa Going to Benefit from Hong Kong? Hakim Ben Hammouda Director, Trade and Regional Integration Division

Outline of Presentation: 

Outline of Presentation Introduction Recalling Africa’s Concerns in the Doha Round Is the Doha Round Addressing Africa’s Concerns? A Critical Look at Proposals on Modalities for Hong Kong. Why Africa Will Have Little Benefits Conclusions.

Introduction: 

Introduction Africa and developing countries were able to impose a pro-development agenda in the Doha Round. The objective for this was to improve the situation of Africa in global economy. Lack of commitment to the Doha Declaration led to failure in Cancun The July Package of 2004 re-ignited original Doha Spirit.

Introduction: 

Introduction Hong Kong was supposed to be a major step to the achievement of the Doha Round. But there has been failure to agree on modalities. Hong Kong text still awaited. It is now accepted that the ambitions/expectations of Hong Kong should be down-scaled. African countries unlikely to benefit much in Hong Kong due to: The low level of ambition of reforms. Supply constraints and low levels of diversification.

Recalling Africa’s Concerns in the Doha Round: 

Recalling Africa’s Concerns in the Doha Round Improvement of market access Both in agriculture and NAMA. Elimination of high tariffs and tariff peaks. Elimination of tariff escalation that discourages vertical diversification and industrialization. Phasing out of export subsidies and trade distorting domestic support measures. To give African agriculture a chance.

Recalling Africa’s Concerns in the Doha Round: 

Recalling Africa’s Concerns in the Doha Round Strengthening development dimensions that integrate enhanced market access; balanced rules; and capacity building: Special and differential treatment. Policy space and sufficient flexibilities. Enhanced capacity building initiatives. Improve Africa’s participation in global trade: Adequate technical assistance and capacity building support in trade facilitation. Services negotiations outcome that take into account real needs of Africa e.g. in MODE 4.

Is Doha Round Addressing Africa’s Concerns? Agriculture: 

Is Doha Round Addressing Africa’s Concerns? Agriculture Agriculture negotiations modalities proposals show different levels of ambition. Varying ambitions in the different pillars. Considering the three pillars holistically the level of ambition can best be judged as low. In a given pillar, ambition in one element can be easily eroded : Let us demonstrate using the ambitious tariff cuts proposed by the US but define sensitive products closer to the EU proposal

Is Doha Round Addressing Africa’s Concerns? Agriculture: 

Is Doha Round Addressing Africa’s Concerns? Agriculture Africa loses through sensitive products what it is supposed to gain from the ambitious tariffs cut. Double-edged sword modalities proposals for agriculture that give with the right hand and take with the left. Moreover, special and differential treatment are not strong enough in all the proposals. Deep tariff cuts expected from developing countries too.

Is Doha Round Addressing Africa’s Concerns? NAMA: 

Is Doha Round Addressing Africa’s Concerns? NAMA Progress has been very slow. Three concerns stand out in the modalities proposals made so far. Firstly, the move towards a Swiss-type formula reduces flexibilities. Second, there is absence of differentiation in what is on the table. Thirdly, the current proposals will reduce the policy space available to African countries.

How Doha Round NAMA Modalities could help Africa : 

How Doha Round NAMA Modalities could help Africa Pro-development NAMA outcome could help Africa by: Providing a greater level of flexibilities. Coming up with modalities that can allow incorporation of strong special and differential treatment. Providing policy space for developing countries to pursue industrial development.

But, Africa will Benefit Less even from Ambitious Reforms: 

But, Africa will Benefit Less even from Ambitious Reforms While Africa is keen on high level of ambition in the Doha Round, there is evidence that it will benefit less. Here are the results of the distribution of benefits of unrestricted market access to all LDCs by the QUAD.

Africa will still Benefit Less even from Ambitious Reforms: 

Africa will still Benefit Less even from Ambitious Reforms As a grouping, LDCs would benefit from UMA. Of the exports expansion: South Asian LDCs: US$ 1.1 billion Bangladesh: US$ 1 billion African LDCs combined: US$ 0.5 billion Welfare gains of US$ 6 billion to all LDCs Bangladesh: 41% Other South Asia LDCs: 37% African LDCs: 21%

Why Would Africa Benefit Less: 

Why Would Africa Benefit Less Two main explanations. Firstly, there are supply constraints in African economies. Secondly, African economies have a low level of diversification and are unable to exploit opportunities. Compare Africa’s diversification with other regions.

Why Would Africa Benefit Less?: 

Why Would Africa Benefit Less?

Conclusions: 

Conclusions Current proposals on modalities agriculture and NAMA do not adequately address Africa’s concerns. Low level of ambition in important elements erode any potential benefits from ambitious elements (agriculture proposals). Special and differential treatment is weak (NAMA) and non-specific (agriculture).

Conclusions: 

Conclusions Current modalities proposals in agriculture and NAMA could erode the remaining policy space for African countries. Due to supply constraints and low level of diversification, African countries will benefit less, hence need for meaningful development dimensions that also cater for capacity building.