TRALAC - Trade Law Centre

Africa: Trade alks Should Harvest Africa Gains Soon

Sunday, 02 December 2001

The "Doha Development Round" of world trade negotiations needs to produce an "early harvesting" of the gains for Africa promised in talks so far, argue an eminent panel of international leaders set up to monitor the delivery of promises to Africa by economically developed countries. An excerpt from "Africa's Development: Promises and Prospects - Report of the Africa Progress Panel 2008."

There is a critical need for a rethinking of trade policy in the context of the urgent need to boost agricultural production around the world. Biofuel subsidies and export controls are not currently the focus of multilateral trade negotiations but must be addressed as part of an overall strategy to liberalise agricultural production. Trade liberalisation of input markets is also very important—in the longer term, an increase in the production of fertilizer is necessary to raise yields. Currently, the fertilizer market is far from efficient and is not generating the quantity response that is needed to address the shortage in food production. Policies on grain storage and buffer stocks should also be reviewed. In light of climate change and the resulting decline of agricultural productivity in some parts of Africa, expanded access to markets, fair world trading rules, and improvements in the capacity to trade are absolutely critical in terms of enabling millions of Africans to generate enough income to purchase food.

In the longer term, trade policy must work to enable millions of Africans to get jobs and grow their incomes. Initiatives such as the U.S. African Growth and Opportunity Act (AGOA), which offers duty-free access to 37 countries and has simplified rules of origin, and the European Union's Everything But Arms, which offers duty-free, quota-free market access to nearly all products from 34 African countries, are to be commended for their efforts to open up markets to Africa's exports. The European Union is negotiating Economic Partnership Agreements (EPAs) with several clusters of countries including several in Africa; countries with EPAs will have tariff- and quota-free access to markets in EU member countries, with short transition periods for sugar and rice. The G8 has reiterated its commitment to duty-free and quotafree market access for LDCs, and has provided strong support for the Aid for Trade initiative. The U.S. and Japan dominated aid-for-trade delivery in 2006, and several other donors have made significant contributions.

But multilateral efforts, particularly the Doha Development Round, remain deadlocked. While the G8 has emphasised the need to conclude the Doha Development Round, talks have stalled on a variety of issues. The commitment to eliminate all forms of agricultural subsidies was dropped from the 2007 G8 communiqué. Many countries continue to impose tariffs on imports of agricultural commodities which have had a significant, negative impact on Africa's exports. Recently, there have been renewed efforts to restart the Doha Round— there is scope for early harvesting of gains for Africa from this new effort.

With rising food prices, the "policy space" provision of previous G8 statements is particularly important. The G8 has recognised that "least-developed countries face specific problems in integrating into the international trading system" and is committed to "work to ensure that there is appropriate flexibility in the DDA negotiations" so that countries can "decide, plan and sequence their overall economic reforms." Progress against this provision is hard to measure, but we want to emphasise that it must not be forgotten.

It is worth noting that African countries have undertaken their own efforts to reduce intracontinental trade barriers via the formation of regional free trade areas. Kenya, Tanzania and Uganda have created a customs union in the form of the East African Community. Several countries in Africa are in process of reforming their business environments, especially in the area of customs clearance and business regulations (World Bank Doing Business, 2008). Even as African governments undertake these efforts, they will need some flexibility to be sure that their poorest citizens do not suffer from the negative aspects of trade liberalisation. And finally, while agriculture is where the greatest potential gains lie in the Doha Round, market access is by no means the only solution. It is also critical that both the G8 and African governments prioritise rural development, including mechanisms by which the poor can be connected to markets. Only then will the full benefits of an open trading system be realised