The African Union (AU) on Wednesday adopted an Arusha Declaration and Plan of Action on Commodities to coordinate member states stance on the coming World Trade Organization's (WTO) Hong Kong round of negotiations.

The AU demonstrated determination to develop and implement a common African strategy on commodities and the regional bloc called upon international community and the continent's partners to provide adequate and sustainable support to Africa's efforts to fully utilize its commodities for its own development.

Participants of the Arusha meeting of trade ministers of AU member countries agreed that fair, equitable and stable prices for African commodities play a key role in poverty alleviation and in the improvement of living conditions for Africa's rural population.

Commodity production constitutes the largest source of revenue and employment for African countries.

In many African countries 65 percent of the total exports originate from the commodity sector and approximately half of the countries in Africa derive over 80 percent of their merchandise export income from commodities.

In quite a few African countries three or four commodities represent the main source of export earnings, government revenue and employment.

The trade ministers endorsed the draft declaration worked out by their senior aides prior to Wednesday's ministerial, stressing that it is commodity dependence characterized by low productivity, low added value, low product quality and low competitiveness that hinders the achievement of the required level of economic growth and poverty alleviation.

The Arusha declaration welcomes a WTO consideration in Hong Kong of effective and expeditious reduction in subsidies by developed countries in cotton, sugar and all other commodity products of interest to developing countries apart from announcing that the African countries need flexibility and policy space under the WTO multilateral trade rules to choose the most effective strategy appropriate to the African situation.

From 1977 to 2001, however, the combined UNCTAD price index for all commodities declined by as much as 53 percent in real terms and the combined current price index of commodities has not surpassed the 1995 level despite recent improvement, according to the aides who proposed further South-South cooperation.

"South-South trade has the potential for mutually beneficial exchanges between Africa and developing countries in other regions, " said the declaration. "Indeed there are encouraging prospects that South-South trade provides a 'window of opportunity' for African countries to increase their earnings from commodity exports."

The forthcoming Hong Kong round of the WTO ministerial meeting or otherwise known as the Doha Development Round is expected to settle the issues that will shape the final accord of the Doha Development Agenda.

Source: Xinhua