Africa Must Rethink Involvement in Trade Talks

One thing the World Trade Organization excelled at was to unleash an
avalanche of developed countries' interest groups in Africa. Civil society
groups covertly representing the interests of developed nations made
Africa a launching pad for their inter-country trade ‘warfare’. For
Africa, the collapse of trade talks served to expose the hypocrisy of
developed nations. “We realize we are now taken hostage by larger
developed countries,” observed an African delegate.

African countries, perceived to be poor, spend immense resources in terms
of expertise and money seeking to access markets in developed countries.
The rich nations on the other hand, temporarily lost a one stop shop for
negotiating favorable rules to protect their products and markets. However
both sides have options: Wealthy nations can still ‘ignore’ value added
products from Africa and still have stable economies while Africa can as
well ignore WTO and initiate its own intra Africa trade round.

The World Trade Organization turned some of the best brains of Africa into
clowns that wait at every turn of trade meetings to shout from outside the
fence about securing African interests. Africans must pull out of this
trade organization. The WTO turned into an organization where poor nations
were bulldozed and tossed from one agenda to the next. African countries
in particular, are in a tight fix as they are faced with a situation where
they have to negotiate with donor countries, people who determine their
future! So far the only effective weapon available in the trade talks for
countries from Africa is emotions; the quest to make the wealthy nations
look bad and the fear of immigrants by the rich nations!

Trade is supposed to be a win-win game that ought to make parties involved
benefit.  The present scenario points at a situation where wealthier
countries have comparatively open markets than individual African
countries. African policy makers fear that superior industries in
developed countries will run their local businesses out of the market. The
fact that the trade talks collapsed on the platform of wealthy nations
refusing to move an inch on opening their markets gives African
negotiators reason to be apprehensive about open markets in the WTO sense.

Some new entrants into the global economic power houses have  lessons to
offer Africa. China and India witnessed rapid trade expansion in the last
twenty years hence becoming economically powerful while Africa stagnated
during the same period. Analysts argue that Africa’s poor performance is
due to inability to produce and trade. Africa must urgently increase its
capacity to trade by removing internal barriers that make it difficult for
intra continental trade. There is no way Africa will compete at a global
level as 54 fragmented tiny nation-markets. The African people must pull
their resources together, trade amongst themselves and learn to compete in
order to be effective at the international level.

According to United Nations Economic Commission for Africa estimates,
regional integration in Sub Sahara Africa alone will lead to $1.2 billion
in earnings. A similar call for integration was proposed by the 1991 Abuja
Treaty. This may not be realized under the present WTO environment where
each African state is fighting to get her cotton, tea, coffee, flowers and
other products accessing markets in developed countries. Africa’s intra
regional trade remains very low at 12 percent and 3.6 percent at the
global level. It is more efficient to focus on regional trade as a
strategy to hone skills to launch into global markets.  Developed country
producers will still target African markets by gravitational pull or
gravity fed.

One of the leading Kenyan Newspapers recently published a story on how the
British driven by a huge appetite to conquer the interior of Kenya used
Lake Naivasha as their first airport. The railway line was slow, the ships
were slow, but they had aircrafts that could land on water and make the
interior of Kenya more accessible. Africa must consider reforming their
airspace regulations to speed up connectivity in the continent.

The recent collapse of trade talks left many people wondering what will
happen to Africa. The high cost of transporting goods in Africa estimated
at 14 percent of the value of exports is a huge barrier to trade both
within and outside Africa. African nations have virtually legislated
against trading amongst themselves through varying axle load standards,
numerous check points and tariffs. If Africans are keen to trade, they
ought not to wait for wealthy nations. Continental trade will be a big
boost to the growth of the economy of this continent.

Africa ought to declare free trade in its own terms. First, it is
strategic that Africa opens up for mobility of Africans within the
continent in order to spur trade. Second Africa should invest more in air
travel as a strategy to link up isolated spots through using existing
airport network. Such a linkage will spur economic activity in the
continent thereby facilitating trade. Third, African governments should
reform their business laws to enable the ordinary Africans respond to
market needs. For instance, along the Kenya Uganda border, locals started
the now famous bicycle taxis that are doing a booming business. The growth
of the bicycle taxi business was largely due to the fact that the two
governments did not legislate them out of the market. Fourth, it’s urgent
that African nations harmonize their trading rules in order to avert the
present catastrophic mindset of focusing only to the external markets as a
way of boosting economic growth.

The collapse of the trade talks offers Africans a good opportunity to
reflect on how to engage the global market while freeing their own local
markets.

By James Shikwati
Director, Inter Region Economic Network

Copyright © 2006 The African Executive

¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤
To unsubscribe/subscribe or view archives of postings, go to the Gambia-L Web interface
at: http://listserv.icors.org/archives/gambia-l.html

To Search in the Gambia-L archives, go to: http://listserv.icors.org/SCRIPTS/WA-ICORS.EXE?S1=gambia-l
To contact the List Management, please send an e-mail to:
[log in to unmask]
¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤