Africa and the WTO Negotiations

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Africa and the WTO Negotiations

• Amal Nagah Elbeshbishi
• African Trade Policy Centre
• Trade and Regional Integration Division (UNECA)

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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?

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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.

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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.

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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 (SD) 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 Dohas Promise Been Fulfilled?

• The general consensus is that no significant
  progress has been made in fulfilling Dohas
  promise to developing countries.
• Deadlines have been missed in all critical areas
  of the DDA.

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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.

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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.

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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.

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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.

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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.

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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