The East African | By Gichinga Ndirangu | August 18, 2003
The World Trade Organisation meeting in Cancun, Mexico, this September will, in keeping with tradition, be a roll-call of the world's trade ministers. Such is the significance attached to the WTO that a wide range of trade experts and technocrats will swamp Cancun for a week of intense negotiations. Ironically, many of the key issues will have been decided ahead of the meeting while the finer details will be hammered out in closed-door discussions commonly referred to as "green rooms" in WTO parlance. A select few will decide and the plenary will be shepherded towards consensus.
It is a disturbing yet valid commentary that the process of WTO negotiations vests more clout and privilege with rich countries -- who are its main benefactors, even though developing countries dominate its membership. Often, the latter's concerns and demands provide a good basis for the rich to build their rhetoric. This explains why trade negotiations at the WTO often generate more heat than light as the rich remain long on promises and short on delivery. Still, developing countries will troop to Cancun, not out of delusion but from a sense of duty and expectation. Their participation recognises that WTO is not only a necessary evil but also an important option. The thinking must however broaden to embrace other options while maintaining constructive engagement with the WTO.
A renewed emphasis on regional trade would for instance broaden trade options. Regional trading blocs are fast establishing themselves as viable alternatives alongside preferential and bilateral trade arrangements. The fact that Uganda is Kenya's foremost trading partner, a notch higher than the European Union, says something about the significance and potential of regional trade. The greater challenge is that of enhancing the economic potential of regional markets to benefit local entrepreneurs.
Africa's trade technocrats must therefore move with vigour in strengthening regional trade through the evolution of Customs unions, harmonisation of tariffs and easing of cross-border trade even as they haggle over trade rules at the WTO. The latter may well be an expensive pastime. Developing predictable trade rules that cut out red tape and diversifying export products are key imperatives for viable regional trade.
Beyond regional trade, it is expected that trade preferences such as those under the EU-ACP partnership will continue providing significant stabilising support for various key exports. An assured market and the absence of tariffs on these primary exports has made trade preferences almost indispensable to the trade balance sheet of many ACP countries.
However, it is imperative to think beyond these trade preferences, which are begrudged by non-beneficiary countries. Besides, their long-term existence is not assured while the expansion of the EU primarily through the admission of Eastern European countries will exert new pressures on market access as ACP countries face new competitors.
The bottom line is that ingenuity and innovation will be required to reverse declining terms of trade, which are further complicated by the structural impediments in the multilateral system. The point is that the multilateral trading system represents significant potential opportunities that cannot be harnessed unless its systemic shortcomings are addressed.
The growing trade inequalities between rich and poor nations within the multilateral trading system must receive equal emphasis in the face of endemic poverty in many developing countries. The failure to spread the benefits of the global trade system more evenly and fairly cries out for examination at Cancun.
Developing countries have persistently sought special safeguards to be built in to the various WTO trade agreements. There is unanimity that these measures are needed to address existing imbalances that remain skewed in favour of rich countries.
Unfortunately, most of these special and differential provisions are couched as aspirational statements of good intent, which renders them ineffective and non-binding. As a result, developing countries have not fully benefited from the multilateral trading due to a multiplicity of tariff and non-tariff trade barriers.
Developed countries are culpable for failing to improve market access for products of export interest to poor countries. The subsidies paid to their farmers - estimated at $311 billion annually - have increased rather than decreased. Restrictions exist on importation of various textile and garments products from poor countries. In addition, complex rules on tariffs and a host of non-tariff barriers continue to undermine the export potential of most developing countries.
It is wishful to imagine that the fortunes of developing countries will improve in the face of these bottlenecks and in the absence of goodwill from developed countries. But the Mexico Ministerial must take leadership in tackling these challenges rather than creating new and additional obligations. The risk of new issues being introduced into the trade agenda while core issues remain unresolved will only overburden and further marginalise developing countries. This must be resisted even in the face of spirited manipulation by the richs countries.
Indeed, it is this blatant insensitivity towards the interests of developing countries that will further undermine the WTO's credibility and act as a wake-up call for poor countries to explore alternatives. Unless there is serious stocktaking at Cancun on progress made in meeting the development priorities of poor countries, there will be little justification in looking to the multilateral trade system as the key to enhancing economic growth and development.
The emphasis in Cancun must be on making sure that the demands of poor countries are not buried beneath the avalanche of rhetoric from developed countries.
In the past, the level of participation in trade negotiations by developing countries was wanting. Indeed, the Uruguay round trade agreements that gave rise to the WTO were crafted with only limited participation from them. In contrast, developed countries enlisted their corporations in developing agreements that primarily safeguarded corporate interest while paying lip service to fair trade.
Developing countries must be on their guard to avoid a similar fiasco and instead focus on articulating positions that promote their integration in world trade. Sharpening negotiating capacity will be key. More important, however, is the need for developed countries to show greater commitment in pursuing reforms that create a level playing field.
Gichinga Ndirangu is a researcher on trade policy issues at the Heinrich Boll Foundation in Nairobi.The East African:
