African political leaders against new issues at WTO

by Martin Khor

Penang, 3 September 2001 - A recent meeting in Kampala, Uganda attended by heads of government or states of eleven developing countries concluded that the World Trade Organisation should focus on consolidating and resolving the imbalances in its rules, and not bring in new issues at the forthcoming Doha Ministerial conference.

The four-day “Smart Partnership” international dialogue, organised jointly by the Uganda government and a unit of the Commonwealth Secretariat, was held at the end of August and attended by 700 participants (political leaders, senior officials, business leaders and media representatives) from 14 African countries, as well as Malaysia and the Carribean.

Among the African political leaders were President Museveni of Uganda (who hosted and chaired the meeting), President Mbeki of South Africa, President Chissano of Mozambique, President Mkapa of Tanzania, President Moi of Kenya, President Muluzi of Malawi, the Presidents of Botswana and Sudan and the Vice President of Zimbabwe.

Other participants were Malaysian Prime Minister Dr Mahathir, the Secretary General of the Commonwealth and the deputy secretary-general of Caricom, the agency of Carribean states. Several Ministers also came from the participating countries.

The Kampala meeting is part of a series of “Smart Partnership” summits held annually in Africa. Similar meetings are also held biannually in Malaysia. They are aimed at promoting South-South exchange of policy experiences, trade and investment.

At the concluding session of the conference, a summary of the discussions on WTO was presented. This stated that the developing countries were facing serious problems arising from the existing WTO agreements, especially those on intellectual property, agriculture and investment measures, which affected their development prospects.

It added that in the next few years, the WTO should focus on resolving the many existing problems. At the WTO’s Ministerial conference, developing countries should not agree to new issues (such as investment, competition and government procurement) becoming negotiating subjects.

The summary also stated that political leaders should also pay more attention to policy making at the WTO and information on the WTO, and its negotiations, must be given to the public in the participating countries.

As part of his summing up of the conference proceedings, President Museveni said that on the discussions on the WTO there was the following consensus: “Let us consolidate and solve the present problems and not embark on new issues. We should be vigilant and not be taken in by surprise by the proposals for new agreements.

“We must monitor closely what happens in Geneva at the WTO between now and November (the Doha Ministerial meeting). We should be sure our Ambassadors in Geneva are monitored and reinforced by our officials.” Earlier, the political leaders had held a closed-door session of their own on “smartening up the WTO.” According to sources in participating delegations, the leaders held an extensive discussion on the effects of the WTO and the agenda of the Doha Ministerial conference.

There were also several presentations by speakers on the WTO, and a discussion session by the participants.

The Kampala meeting was a huge affair, with several hundreds of the Uganda political, bureaucratic and business elite turning up in full force. The Ugandan President, Yoweri Kaguta Museveni, who hosted the event, evidently took the dialogue seriously and had encouraged almost his entire cabinet and top civil servants, as well as the country’s captains of commerce, to attend.

At the opening session, Dr Mahathir, summarised the concept of smart partnership among countries, as follows: “There is no point impoverishing other countries.  If we help them to be prosperous, their people will stay at home and not become refugees in your country. The solution is to avoid confrontation, and there is no need for anyone to lose.”

The main theme of this year’s dialogue was foreign direct investment (FDI) and how to attract it to the Africa region. The discussions started on the expected footing, of how to improve the investment climate through the correct policies of political and macro-economic stability, infrastructure and skills development.

But many participants also stressed the need for the balanced sharing of benefits between the foreign investors and the host countries. Throughout the dialogue, loud applause greeted those who spoke up for a more comprehensive approach to investments, especially the need not to neglect the interests of local investors and firms even as countries compete for the more glamorous foreign investors.

President Benjamin Mkapa of Tanzania made the link between local and foreign investors by stating that foreign investment is attracted to a country only if it already has a thriving economy resulting from local firms and products.  “Local investment is the magnet to attract FDI,” he said.

“We need to stimulate the local consumption of products of our local firms, only then will foreign firms be attracted. If we don’t do that, the small and medium enterprises that represent local investment will wither and die and the process of globalization or FDI will not be sustainable economically or politically.”

Mkapa warned that FDI should not “smother” aspects of local production, otherwise the local firms would “wither away.” He argued that protection of local production should be strengthened, otherwise globalization would undermine local products.

A major theme that emerged during the dialogue was the “smartening up of the World Trade Organisation” so that benefits from it would be a “two way street.” This topic generated considerable interest in view of the upcoming WTO Ministerial.

Several speakers were critical of the lack of benefits from the WTO so far to developing countries and warned against accepting new issues in a “new round” being advocated by the major developed countries.

Mozambique’s President Joachim Chissano made a strong statement criticising the WTO’s working methods and legal framework for not meeting developing countries’ needs.

“To make WTO rules work for the poor, an urgent reform process is needed,” he said.

“No comprehensive round of new trade negotiations should take place on non-trade related issues unless we clearly reach a politically binding and contractual commitment to advance the implementation issues.”

Chissano added that the WTO agreements must be “extensively reviewed and reoriented to place a true development dimension, including poverty eradication as their primary purpose.”

“We should avoid treating human needs as mere commodities. In this regard we should not allow the patenting of life forms, the continuation of patent practices that jeopardise biodiversity, food security and local people’s rights, and continuation of provisions in the WTO’s intellectual property agreement that prevent governments from limiting or denying patent protection on life-saving medicines.”

Chissano also said the WTO’s dispute settlement mechanism should be made more transparent, otherwise, “we should consider removing it from WTO control to avoid the WTO acting as judge and jury in trade disputes.”

He also said the use of the IMF and World Bank’s policies (structural adjustment programmes) to force trade liberalisation on developing countries must end.  Instead, more emphasis should be put on rebuilding local and regional economies rather than concentrating on considerations of pure competitiveness between nations.

Tanzania’s President Mkapa said the WTO should give developing countries enough time to catch up so they can trade effectively. “We must advertise the unreality of a level playing field. For a least developed country, it can’t be level.

“When the OECD countries subsidise agriculture at more than US$300 billion a year, how can my country’s peasant farmers enter a ‘level playing field’? It is nonsense. If you invite me to a level playing field, it’s like shackling my feet and asking me to enter a boxing ring.”

Mr. Mahdevi, a leading Ugandan businessman whose company is the country’s main sugar producer, gave a striking example of the inequities of the trade system which make it hard for developing countries to compete.

He said the import duty for sugar was 151% in the US, 176% in Western Europe and 278% in Japan. “In Uganda the rate is only 25% and yet we are told to reduce it, and this will affect the 250,000 people involved in sugar in the country. It is a sad story.”

The meeting also launched a system of sharing and disseminating news among newspapers and agencies of developing countries, known as the Smart News Network International (SNNi). Newspapers will contribute articles regularly to the website, and each paper will be able to draw news and features from the system.

The aim of the system is to promote the use of articles originating from local journalists, and thus facilitate alternative sources to the mainstream global media which has been criticised for carrying reports biased against developing countries. – SUNS4961

About the writer: Martin Khor is Director of the Third World Network.

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