Africa takes a few gingerly steps, but traps ahead

Tetteh Hormeku*

Accra 29 Sep 99 (ISODEC/TWN) -- The Ministerial Statement adopted at the Conference of African Ministers of Trade in Algiers last week placed implementation problems, as well the need to repair the existing imbalances and inequities of the WTO system at the centre of the negotiating positions African countries will be taking to Seattle.

While this is a positive step, it could do with some reinforcing.

In addition, while they sought to distance themselves from the possible introduction of new issues, and the launching of a new round in Seattle, the Ministers did not address this problem frontally. They may thus have left themselves open to the possibility of their concerns being mobilised into supporting the agenda of the Northern countries.

The statement adopted by the Ministers is meant to be transmitted to the General Council of the WTO as Africa's further contribution towards the Seattle Conference. It reaffirmed earlier submissions to the General Council emanating from regional and sub-regional preparatory processes; the message sent to the WTO by the earlier meeting of the Group of 77 Ministers in Marrakech, as well as the proposals that have been made by African delegations to the WTO General Council as part of the Seattle preparatory process.

All these, the statement declared, constitute the negotiating position of the Ministers for "future multilateral trade negotiations"

The Ministers noted that a "key challenge facing the multilateral trading system is to ensure that issues of development are addressed decisively and satisfactorily". To this end, they wanted future negotiations to be based on a "balanced agenda, accommodating all the concerns and interests of all developing countries; address implementation issues, in particular the commitments in favour of developing countries; and address the imbalances arising from the Uruguay Round Agreements".

Additional issues to be taken into account include "the trade and finance needs of developing countries", as well "structural adjustments requiring developed economies to reduce a range of protection and support measures to inefficient industries".

Furthermore, they called for the negotiations to aim at a stronger "rules-based system, whose benefits are equitably shared, and provide for appropriate recognition of special and differential treatment for developing countries and least developed countries (LDCs), island, vulnerable and small economies." And they "must address the key interests of African countries in such crucial areas as agriculture, services, sanitary and phytosanitary regulations, anti-dumping, subsidies and countervailing measures, safeguards, tariff peaks and tariff escalation".

These views are reinforced (in the declaration) by a general concern. It is that, in spite of structural adjustment reforms, African countries "still face insufficient financial flows, in particular sharp decline in ODA, insufficient investment and crippling external debt. Moreover, the recent financial crises have highlighted how vulnerable our economies are". The Seattle process should therefore "lead to an international trading system that is supportive of and contributes to the success of these reforms.

To support all these, the statement calls for specific decisions in particular areas in order, among others things, "to strengthen the confidence of African countries in the political will of the WTO members to address the problems we face in drawing effective benefits from the multilateral trading system".

The first group of these decisions relates to extensions to the transitional periods, or expansion of the scope of exemptions contained in various agreements. Thus, the statement called for the extension of the transition periods specified in the TRIPs, TRIMs and Customs Valuation Agreements. Rather than an a priori time frame for such extensions, the ministerial statement insisted that the time frame and process be defined by the availability of the resources required to effectively implement these agreements. In addition, the statement called for the list of developing countries which by virtue of Annex VII of the Agreement on Subsidies and Countervailing measures are exempt from the restrictions on the use of subsidies to include low and medium income countries.

The second group of decisions is in the area of tariffs, and market access. Here the statement called for the institution of zero rates by developing countries for products originating in the LDCs. In the area of agriculture, the statement wanted such action by developed countries as improved market access, abolition of export subsidies, and reduction of their domestic support. Another call was for "the necessary waiver to be granted to permit the Lome preferences to be extended for a further ten years".

A third set of decisions relate to technical and/or financial assistance, and this cuts across most of the decisions. The main features include giving renewed impetus for to the implementation to the Integrated framework for Trade-related Technical Assistance for LDCs; technical and financial assistance in the implementation of the reform process in agriculture; and above all, "adequate financing of technical assistance from the regular budget of the WTO, beginning in 2000.

Fourthly, there is action sought on the substance of particular agreements. Here, for example, the TRIPs agreement comes in for extensive mention. A major concern is over transfer of technology. Specifically the statement called for action to ensure the realisation of the objectives and principles contained in the agreement in respect of transfer and dissemination of technology to developing countries. Another was to allow compulsory licensing for essential drugs, as listed by the World Health Organisation.

A fifth area concerns consistency in international trade and economic policy. Here, there was a call for: coherence in international economic policy, especially to prevent the World Bank and IMF from "including in their structural adjustment programmes, measures which go beyond the obligations accepted by developing countries in the WTO. Another demand was for a decision to ensure that new countries acceding to the WTO are not offered more onerous terms than other developing country members. Finally there was a call for action on regional integration.

The statement affirmed regional integration among developing countries as essential to reversing the process of marginalisation, and as a first step on the effective integration of these countries into the multilateral trading system. This called for any review of existing agreements, or new ones, should not "undermine regional integration efforts by developing countries".

"Moreover, in order to facilitate the conclusions of trading agreements involving developed and developed countries, there is need to revisit the provisions of Article XXIV of GATT 1994 and the Enabling Clause".

This contrasts positively with the approach typified by WTO officials, including Director-General Mike Moore, who want regional integration efforts of developing countries to be subject to the WTO. It is also meant to address the Lome Convention and particularly, the arguments by the EU for its regional partnership agreements, which would effectively collapse all genuine integration efforts in the ACP regions.

The Ministerial Statement as a whole points generally in the right direction of the need to deal with the implications of the existing WTO agreement for, and their impacts on African countries. They raise in general the need to redress the problems of the WTO for African countries by re-visiting the agreements as they exist.

However, this broad orientation is limited in two crucial ways. First, by what is omitted, and second by defects in what is included in the statement.

To begin with, specific recommendations for action focus too much on the technical aspects of the difficulties faced by African (and other developing) countries in implementing the agreements. Addressing the implementation problems tend to highlight such considerations as extending the time and scope of transitional periods, even where the case is obviously one of revising the agreements themselves. Related to this, technical assistance in implementing the agreements assumes an exaggerated importance in the solutions put forward to address the implementation problems.

All this is at the expense of more systematically addressing the agreements and rules of the WTO themselves, as formulated and their inherent deficiencies, imbalances, and negative implications for the developmental options of African economies.

An illustration is the approach to the TRIPs agreements, and the problems of technology transfer. The ministerial statement assumes that the technology transfer provisions provide adequate framework for accessing technology at fair and reasonable costs by developing countries. It therefore calls for developed countries to live up to their commitments. The review that the statement calls for here is about finding ways and means to operationalise the transfer and diffusion of technology objectives of the Agreement.

And yet the essence of the TRIPs agreement is to restrain diffusion of technology to developing countries, to protect and entrench and the domination of Northern transnational companies over technology. In this regard what was required was not so much the operationalisation of objectives, but revision which, for instance, restricts the sectoral coverage of the TRIPs agreement, at least for developing countries.

Take for instance the important area of health and the TRIPs agreement. The ministerial statement only calls action to ensure that developing countries are not prevented from compulsory licensing of drugs listed by WHO essential. This is fine, but only scratches the surface. For the essential challenge posed by TRIPs to health is precisely to give giant pharmaceutical and agri-business companies control over health by requiring patents on micro-organisms, and so on.

In this regard action which would be more commensurate with the needs of African and developing countries would be some revision of the whole set up, similar to the proposals for review of the TRIPs tabled by Kenya on behalf of the Africa group.

Ironically, while their own negotiators in Geneva are making such demands, the Ministers themselves are fighting shy of rising to the occasion. Overall then, the approach adopted in the Ministerial Statement is limited in putting unequal emphasis on technical problems of implementation, at the expense of problems relating to the essence of the agreements; by emphasising implementation difficulties at the expense of the inequities and imbalances of the agreement.

The risk is that it makes it easy for the demand for repairs to the existing agreements in the WTO to be side-stepped with offers of technical and financial support. Technical support which the African countries need so desperately will become a means, not to address their concerns about the inequity of the WTO agreements, but to tie them firmly into the imbalances which create this inequity.

An even graver danger is represented by the attitude adopted in the ministerial statement to the "new issues" and new round being advocated by the Northern "majors" for the Seattle ministerial.

Rather than express their opposition to (or even reluctance over) the introduction of new issues and new round in Seattle, the statement simply chose the option of silence.

To be sure, this "silence" was understandable in the light of the exchanges involved in the drafting of the declaration. All (or almost all) countries who spoke expressed in one form or another an opposition to the new round. All were also agreed that whatever happens, they needed to formulate their own positive demands to be addressed in Seattle. But then some wanted to state their opposition to new issues and new round vigorously as a negotiating position for which they would fight, even as they prepare to state their own agenda. For others, however, the introduction of the new issues and new negotiations were more or less inevitable, and therefore the best approach was to maintain flexibility - some even called it face saving. What some saw as a fall-back position, others saw as the main strategy.

In the event "silence" emerged as the best collective form to express their opposition to the new round and new issues. while focusing on their positive agenda. The trade officials drafting the statement purged all references to the "new round", or "new negotiations" preferring instead the phrase future negotiations.

One paradox was that those who thought the introduction of the new issues were more or less inevitable still acknowledge that it could only happen with their support. But instead of using this as a lever for stopping the introduction of the new issues that they say they do not want, they prefer to use it as a vehicle for adding on their own issues.

A similar logic was applied in the address by Mr Carlos Fortin of UNCTAD to the Ministers. He stated clearly that for any "new" negotiations to be launched at Seattle, it required the support of all African country members. But then he advised them to make sure that whatever agenda emerged included all their concerns.

One may say that this represents a misapplication of the otherwise excellent idea of "positive agenda" promoted by UNCTAD for developing, especially African countries. This refers to the idea that for African and other developing countries to participate fully in trade negotiations, they need to identify their own interests, develop technically sound proposals and develop alliances to pursue them.

It arose as a correction to earlier approach where developing countries mainly reacted to proposals from others, opposing this or that only to end up collapsing in the face of pressure and accepting worse terms.

Unfortunately a process of over-correction seemed to have emerged.

Thus, African countries, for instance, concentrate on developing their positive agenda, to such an extent that the main reaction to proposals from the Northern countries these days is to ask for a dimension which addresses their interests. Usually this has meant looking for a developmental dimension even in proposals like the MAI/MIA whose fundamental logic is totally anti- developmental, and which should therefore be opposed.

Ultimately, the root of this problem is that having been imposed upon by external institutions like the World Bank and IMF for all this while, the majority of the African countries do not have a home-grown and home-driven developmental strategy against which the value of particular ideas and forms of liberalisation are measured.

However, in the immediate context of the preparations for Seattle, the problem with this "positive agenda" approach is a failure to recognise that in negotiations, as one of the African officials in Algiers said, it is not enough to state what one wants.

It is equally important to state what one does not want, to draw a bottom line. That way the negotiations for what one wants would take place on a mutually decided terrain, and on the one marked out exclusively by the demands of the other party. As another official put it, there is no place for face-saving or politeness in negotiations.

In opting for silence as way to express their opposition, the ministerial declaration overlooked this. By focusing on the issues of concern to them, the Ministers may have staked a ground for the coming negotiations. But in not clearly stating their opposition to the North's demands for new issues, they may yet find that they have opened themselves to the kind of approach so aptly demonstrated by Mike Moore, the Director-General of the WTO, who presented all the concerns expressed by Africans as the very justification for the introduction of a new round and on the basis of the new issues.

In short, the Ministers have staked a ground for the coming negotiations, but they may yet find that they have given up the fencing required to protect that ground and advance from there.(SUNS4520)

(* Tetteh Hormeku is an African economist and researcher for the Africa Trade Program of research and technical assistance on trade, at the Accra-based Africa secretariat of the Third World Network. He was at the Algiers meeting of the African Trade Ministers and wrote this analysis.)