Roundup: Africa countries urged to deepen intra-continent trade

Even if the latest round of the protracted Doha trade negotiations broke down, it was imperative for developing countries, especially African nations, to deepen trade among themselves, according to officials who attended the World Economic Forum on Africa held here from May 31 to June 2.

"If we do that the business community in the developed countries will wake up, because we shall not be opening up our markets to products from those countries, because we have failed to reach agreement on the multi-lateral process, " South African Minister of Trade and Industry Mandisi Mpahlwa told delegates attending the summit.

Strengthening intra-African trade and eliminating blockages to higher levels of trade was vital for the continent's development, the minister said when speaking at an update session of the Doha negotiations at the three-day summit, which looked specifically at what the latest round of negotiations held for the continent.

According to the summit, one percent increase in Africa's share of world trade would translate into more than 70 billion U.S. dollars a year in export revenues, more than four times what the continent receives in foreign aid.

The Doha development agenda, which the World Trade Organization (WTO) agreed to in 2001, is aimed at furthering trade liberalization while giving developing nations more access to global markets.

The Doha Development Agenda was launched in late 2001 by the 149-member WTO at the urging of rich states with the stated aim of boosting global growth and lifting millions out of poverty.

Farm policy has been the central issue in the trade talks for Africa, where 85 percent of the population live in rural communities. But decisions on farm policy, including market access and subsidies, rested with big players like Europe and the United States and Africa's task was to persuade those countries to soften support for farmers and remove barriers to market entry.

Participants argued that the club of rich countries that wrote the free trade rules has been aggressive in removing barriers what it comes to industrial products in which they have a comparative advantage. But they refuse to do the same when it comes to agriculture. The developed world funnels nearly one billion dollars a day in subsidies to its own farmers enabling them to dump rice, corn, wheat and other products driving down commodity prices in poor countries resulting in more poverty.

Even the World Bank estimates that if the rich nations would only stop their farm subsidies and tariffs, the poor nations would benefit by as much as a half-trillion dollars and lift 150 million people out of poverty by 2015.

While the African countries have been bargaining hard with the wealthy countries over the past five years of WTO negotiations, trade experts said African industries were still tied down by tariffs, customs duties and other trade barriers within the continent. Africa must tear down barriers to trade between its own countries to promote industrial growth if the world's poorest continent is to reap the benefits of any global trade deal, they insisted.

"If we remove the barriers among ourselves so that we can free up the trade within the African continent," Mpahlwa said, adding that intra-African trade did not come naturally, because it meant "sovereign states incrementally giving up some sovereignty" to make regional integration a reality.

So far, contacts between African trade ministers were limited, possibly only ahead of WTO negotiations, but hardly ever to discuss consolidation of intra-African trade, according to the minister.

Valentine Rugwabiza, WTO's deputy director-general, said she fully supported Mpahlwa's sentiments on regional integration, but tariffs between African countries did not support this integration.

"Regional integration, if it is to become effective... (and) the tariffs are lower between African countries, then regional integration will become the building block for global integration, " she said.

Rugwabiza said should the next Doha round fail it would lead to increased bilateral and free trade agreements, initiated by " powerful" countries. In this scenario, developing countries would be left out and further marginalized.

Jerry Vilakazi, CEO of Business Unity South Africa, said country-to-country agreements might work for the short-term, but in the long-term it was necessary to create a global environment beneficial to developing countries.

"It is very important from a business perspective that this round of negotiations is not allowed to collapse and to fail... there is so much at stake, if in the short-term we don't manage to reach agreement on some of the issues, at least what we should achieve is to keep the momentum going," he said.

Vilakazi said just by the liberalization of agriculture, one of the main stumbling blocks to culmination of the Doha round of negotiations, could see some 200 billion dollars flowing to poorer countries, many in Africa.

Source: Xinhua