UNIVERSITY OF PENNSYLVANIA - AFRICAN STUDIES CENTER
Africa: Trade Analysis
Date distributed (ymd): 000122
Document reposted by APIC
Issue Areas: +economy/development+
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).
UN Department of Public Information.
Room S-931, United Nations
New York, NY 10017, USA.
Web site: http://www.un.org/ecosocdev/geninfo/afrec
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.
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 firstname.lastname@example.org.
Message-Id: <200001221935.OAA02549@server.africapolicy.org> From: "APIC" <email@example.com> Date: Sat, 22 Jan 2000 14:25:26 -0500 Subject: Africa: Trade Analysis
Editor: Ali B. Ali-Dinar
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