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Africa: Trade Analysis
Africa: Trade Analysis
Date distributed (ymd): 000122
Document reposted by APIC
+++++++++++++++++++++Document Profile+++++++++++++++++++++
Region: Continent-Wide
Issue Areas: +economy/development+
Summary Contents:
This posting contains a press release and an article provided
by Africa Recovery, with analysis of the consequences for
Africa of the impasse within the World Trade Organization
following lasst November's Seattle meeting. A longer version
of the article, and related data and analyses, will be
available shortly in the on-line version of Africa Recovery's
December 1999 issue, on the Africa Recovery web site
(http://www.un.org/ecosocdev/geninfo/afrec).
+++++++++++++++++end profile++++++++++++++++++++++++++++++
Africa Recovery
UN Department of Public Information.
Room S-931, United Nations
New York, NY 10017, USA.
E-mail: [email protected].
Web site:
http://www.un.org/ecosocdev/geninfo/afrec
Africa Recovery
Press Advisory: January 5, 2000
Contact: Julie Thompson (1-212) 963-4295
WTO Impasse Opens Opportunities and Dangers for Africa
UN Secretary-General Urges A "Development Round"
New York -- Africa's refusal to be marginalised at the World
Trade Organization's third ministerial meeting in Seattle was
a "watershed" in relations between the industrial North and
the developing South. It also strengthened UN Secretary
General Kofi Annan's call for a "development round" of talks
that would place poverty reduction and sustainable development
at the center of the global trading system.
These are the conclusions of a major article published in the
current issue of the UN publication, Africa Recovery. The
magazine also states that the failure to launch a new round of
trade liberalization talks presents both opportunities and
dangers for Africa.
African trade ministers arrived in Seattle ready to press for
a "development round" to address the deepening poverty in
their countries. Instead, they were shut out of negotiations
and their issues excluded from consideration. The angry
refusal of African and Caribbean governments to accept any
agreement reached without their consent doomed the meeting to
failure and ensures that the interests of developing countries
can no longer be ignored when setting the global trade agenda.
However, Africa Recovery also notes that the failure to launch
a new round of trade negotiations in Seattle locks developing
countries into all the disadvantages of the current system
that African governments and non-governmental organizations
were seeking to change. Under the current rules, some 70
percent of the benefits of trade liberalization flow to
developed countries at the expense of the poor. Through charts
and graphs, Africa Recovery shows how developing countries
have seen their share of world trade fall and their trade
deficits increase under the Uruguay Round agreements governing
international commerce.
In Seattle, African states intended to demand that
industrialised countries open their markets to African
exports, eliminate the biases against developing countries
inherent in the Uruguay agreements and adopt a package of
special trade measures to benefit Least Developed Countries.
In remarks prepared for Seattle's opening ceremony, Mr. Annan
echoed Africa's request for a development round. He called on
industrialised countries to open markets to developing nations
and put an end subsidies that threaten the lives of millions
of poor farmers in Africa, Asia and Latin America who cannot
compete with subsidised imports. Africa Recovery cites UN
studies estimating that elimination of tariff and non-tariff
barriers in developed countries would by generate an
additional $700 billion a year in trade for developing
countries in the South.
Africa's Battle in Seattle:
WTO Impasse Highlights Global Trade Inequalities
By Mike Fleshman for Africa Recovery
Seattle, USA, December -- After the opening-day events of the
World Trade Organization (WTO) meeting in Seattle were
effectively canceled by street protests, Director-General Mike
Moore assured the handful of delegates, who somehow slipped
past the picketers, that the 30 November - 3 December summit
was "doomed to succeed." But in the end, the WTO's "Battle In
Seattle" was simply doomed -- paralyzed by a bitter deadlock
between the US, Europe and Japan over agricultural subsidies
and by an unprecedented rebellion by developing countries
against a process that systematically excluded their delegates
from the negotiating rooms.
Africa's Agenda
Despite the adoption of sometimes painful economic reforms by
many African countries over the past two decades, the
promised benefits of trade liberalization have not
materialized. Fully 70 percent of the wealth generated by
trade liberalization has flowed to developed countries. By
some measures, the rules governing world trade -- set largely
by the industrialized countries over the course of the 1986-94
Uruguay Round of agreements -- have only contributed to
Africa's economic woes.
Africa arrived in Seattle with a set of proposals to make
concern for the world's poorest peoples central to the rapidly
expanding global trading system. While the United States and
Europe sought a wide-ranging "millennium round" of talks on
complex new issues, including investment policy, electronic
commerce, and labour and environmental standards, many
African, Asian and Latin American countries championed a
"development round" to review implementation of the current
Uruguay Round rules.
By focusing on implementation issues, the South hoped to
finally pry open developed countries' markets to its imports,
eliminate tariffs on exports from the least developed
countries, and expand the WTO's technical assistance and
capacity building programmes. The African group also proposed
extending and enforcing the "special and preferential"
provisions of the Uruguay agreements intended to assist the
integration of developing countries into the global trading
system by exempting them from certain WTO requirements and
time-lines.
Developing Countries Rebel
African delegates were optimistic that their agenda would be
taken up in Seattle, if only because WTO decisions are made by
consensus and developing countries are in the majority.
Moreover, in response to sharp criticism of the closed-door
negotiating process at the last WTO ministerial meeting, where
select groups of mostly developed countries met in private
"green room" consultations, the organization promised to
adopt a more transparent negotiating system in Seattle.
Instead of green rooms, working groups open to all delegates,
were to develop draft language for the Seattle Declaration.
However, the Chair of the Seattle meeting, Charlene
Barshefsky, the chief US negotiator on trade issues, made no
secret of her willingness to return to the green rooms to
secure agreement on a new round of trade liberalization talks.
"I reserve the right to use a more exclusive process," she
told reporters, "to achieve a final outcome." By the end of
the first full day of talks, the green rooms were in full
operation and African, Latin American and Caribbean
delegations again found themselves locked out or ignored.
In one instance, an Africa Group caucus meeting was
interrupted when interpreters were suddenly withdrawn in
favour of an unscheduled meeting on labour standards convened
by the United States. Conference staff turned off the
microphones as negotiators left. In another case, ministers
from two Caribbean countries were physically barred from
entering a green room meeting on agriculture.
One African delegate told Africa Recovery that, after the
overwhelming majority of participants in one working group
rejected European proposals for the addition of new issues to
the WTO agenda, the chair nonetheless reported that there was
a consensus in favor of the European Union position. The
working groups, the delegate said furiously, "are toy
telephones. You can talk on them but they're not connected to
anything. Nobody is listening."
Things finally came to a head on 2 December, after an angry
confrontation between developing country ministers and Ms.
Barshefsky over their exclusion from the process. Within
hours, the Africa Group issued a statement denouncing the
process and threatening to block any agreement reached without
its participation. "There is no transparency in the
proceedings and African countries are being marginalized and
generally excluded on issues of vital importance to our
peoples. ... Under the present circumstances, we will not be
able to join the consensus required to meet the objectives of
this ministerial conference , they said. The Africans were
soon joined by Caribbean governments, which issued a similar
statement.
Dangers and opportunities
The unprecedented rebellion prevented the developed countries
from pursuing new trade rules that could be damaging to the
interests of developing countries and it signaled a new
willingness by African, Asian, and Latin American states to
assert their rights within the WTO. South African Trade and
Industry Minister Alec Erwin told Africa Recovery that the
action represented a "watershed."
"The industrial countries now understand that our interests
can no longer be ignored," he said, and that we will have to
be accommodated in future talks. He also pointed out that the
failure to adopt a new agenda locked in all the shortcomings
of the Uruguay Round that developing countries had sought to
change.
One particular danger of the deadlock in Seattle was the
expiration of several important Special and Preferential
agreements that had given developing countries a little more
time to comply with highly complex WTO rules. A package of
special measures for least developed countries was also a
casualty of Seattle. These proposals included the removal of
tariffs from the exports of the poorest countries, and
simplifying procedures for least developed countries seeking
WTO membership. The proposals enjoyed wide support among WTO
members but must now wait until the present deadlock is
resolved.
Uneven playing field
For Africa, changes in the rules governing world trade are
vital. At the heart of the demand for a development round is
the failure of Northern countries to open their markets to
Southern exports. Access to northern markets could have a
dramatic impact on the economies of developing countries which
would quickly be able to increase their exports to developed
countries by some $700 bn annually, according to a 1999 report
of the United Nations Conference on Trade and Development.
Developing countries continue to face formidable barriers to
Northern markets. Tariffs on manufactured products entering
industrialized countries' markets from developing countries
average four times higher than those imposed on manufactured
goods from other industrial states. As UN Secretary General
Kofi Annan notes, some trade policies -- including the heavily
subsidized export of food surpluses by developed countries,
valued at some $250 billion annually -- are "threatening the
livelihood of millions of poor farmers in developing world who
cannot compete with subsidized imports.
Dr. John Abu, Ghana's Trade and Industry Minister, told Africa
Recovery in Seattle that the problem with free trade lies not
in the theory but in the implementation. Globalization, he
said "has to be translated in such a way that everybody gains.
That is why we came here".
A longer version of this article appears in the December
1999 issue of Africa Recovery. Africa Recovery is published
four times a year by the United Nations. Copies can be ordered
from Room S-931, United Nations, New York, New York 10017, USA
or by e-mail at [email protected].
This material is being reposted for wider distribution by the
Africa Policy Information Center (APIC). APIC's primary
objective is to widen the policy debate in the United States
around African issues and the U.S. role in Africa, by
concentrating on providing accessible policy-relevant
information and analysis usable by a wide range of groups and
individuals.
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