Info Service on WTO and Trade Issues (Dec17/09)
8 December 2017
Third World Network
Africa faces litmus test at MC11 on development issues
Published in SUNS #8591 dated 7 December 2017
Geneva, 6 Dec (D. Ravi Kanth) - The African Group of countries faces
a litmus test at the World Trade Organization's eleventh ministerial
conference (MC11), beginning in Buenos Aires on Sunday (10 December),
on their collective proposals on development and domestic support
for agriculture, and their opposition to domestic regulation in services
and new issues, several trade envoys told SUNS.
On Tuesday (5 December), the African Group issued a proposal at the
WTO on "Africa and Development," in which they provided
a historical account of what happened to development in their countries
following decolonization because of the multilateral trade rules.
"A number of studies have shown that the main reason why developing
countries, especially LDCs have not been able to participate effectively
in the Multilateral Trading System is mainly because they are lagging
behind in terms of industrialisation, in particular the production
of value added and competitive manufacturing products," the African
"It is therefore important to note that governments have a duty
to make strategic and targeted interventions in key sectors of the
economy without fear of infringing on their WTO commitments or being
sued under the DSU [dispute settlement understanding]," the Group
Therefore, the African Group said, its members need "some accommodation
in the WTO to take measures necessary for industrialisation and development."
After all, it is historically established that "developed countries
benefited from the absence of rules, and then created new rules that
constrained developing countries, particularly in the early stages
of development," the African Group argued.
The group maintained that development, which was the central pillar
in the Doha Development Agenda (DDA), is being seriously undermined.
The Group said its members are frustrated that "the commitment
by all Members to fulfilling the object, spirit and intent of the
Doha Development Agenda is being seriously undermined."
Instead of finalizing the developmental dividends of the DDA negotiations,
"the discourse on new issues such as Electronic Commerce, Investment
Facilitation, and Micro, Small and Medium Enterprises (MSMEs)"
is being pushed aggressively to "overshadow the development agenda
since the Tenth Ministerial Conference in the current Doha Round negotiations."
More disturbingly, the developed countries joined forces to reject
any negotiations on "development with respect to the paragraph
44 mandates in the Doha ministerial declaration," the African
"Several developed Members have also adopted a stiff rejectionist
approach to any negotiations on development with respect to the paragraph
44 mandate in the Doha Ministerial Declaration, with the view to foster
structural transformation, diversification and industrialisation in
line with the African Union's Agenda 2063: the Africa We Want."
The African Group said "some Members hold that these proposals
cannot obtain multilateral consensus in time for concrete deliverables
"At the same time, however, many of these Members are pursuing
a number of deliverables, some without prior agreement or a (WTO)
mandate, that we would qualify as anti-development, and which unacceptably
narrow the space our Members use and need for policies and regulations
that support our development objectives," the African Group insisted.
For example, the African Group said, in Domestic Regulation for services
"these Members are pushing for rules that would erode our right
to regulate, intrude into our domestic policy-making processes, and
hinder the regulatory capacity and policy space for development-driven
regulations by Africa; promote regulatory capture and control; and
limit the sovereign function of our elected parliamentary representatives
in discharging their sovereign function of legislating."
"The inherent contradiction by some of these Members are untenable,
and point to the need for Members to have an honest appraisal that
can deliver on the commitment to the DDA," the African Group
It emphasized the centrality of "the concept of Special and Differential
Treatment (S&DT), which was introduced in recognition of the development
aspirations and socio-economic challenges faced by the broad constituency
of developing and least developed countries (LDCs) of the WTO."
The African Group said that members should recall that "Ministers
sought, through the establishment of the WTO, to ensure that developing
countries - and especially the least developed among them - secure
a share in the growth of international trade commensurate with the
needs of their economic development."
It asked whether the developed countries want free trade for the sake
of it or enable economic development by improving "inter alia
market access conditions and the terms of trade in a manner that would
steadily raise their living standards and eradicate poverty."
But major developed countries not only refused to engage but continued
"to undermine the relevance and legitimacy of our issues despite
having benefited from a system that supported their development and
industrial rite of passage," the African Group pointed out.
Little wonder that "there is a total disconnect between the clear
commitment to development by Ministers; and the stiff rejection by
some Members on delivering on it," it pointed out.
As a consequence, "increasingly, the WTO is being looked at as
an organisation that does not respond to the specific needs and concerns
of its Members, in particular to effectively addressing the challenges
to economic development in Africa, despite the most recent commitment
by Ministers in Paragraph 5 of the Nairobi Ministerial Declaration."
There is no clarity on issues concerning Development and how the WTO
intends to deliver "on its commitment to development."
"Who is the WTO intended to serve if it cannot address the specific
development needs of the majority of its Members?", the African
More important, "what does the WTO intend to promote, beyond
simply rule-making?", the African Group sought to know.
Without answering these issues, the developed countries want to embark
on new issues for "multilateral rules on E-commerce, Investment
Facilitation and MSMEs," the African Group maintained.
Enough is enough, the African Group said, suggesting that "members
had already undertaken enough rules so far."
As a consequence, "the multilateral rules as they are, are constraining
our domestic policy space and ability to industrialise."
"Before the GATT came into being, industrialised Members benefited
from the absence of rules, through the utilisation of policy space,
and now they are closing this space through GATT Agreements notably
by prohibiting the use of local content requirements; industrial subsidies;
infant industry protection, among others. In other words, the policy
instruments they used during their development process were denied
to late-comers through the GATT Agreements."
Citing Cambridge economist Ha-Joon Chang's famous research work on
"kicking away the development ladder", the African Group
said it raised the issues in the Committee on Trade and Development
in Special Session (CTD-SS) discussions.
The Doha Development Agenda was launched with development outcomes
and aspirations at the centre for the purpose of redressing the systemic
and historic imbalances inherited from GATT/WTO Agreements.
"Yet, the view that new e-commerce, investment facilitation and
MSMEs rules will be good for developing countries has been highly
contested [and] which is why, it is imperative to question the logic
of these new rules," the African Group maintained.
"If developing countries cannot find relief in the current mandates
and rules in a Multilateral Trading System that is intended to serve
all its Members, then what would be the rationale for adopting new
rules, especially if they are meant to further marginalise poor economies?
Any new rules would simply entrench existing imbalances and further
constrain the ability of our governments to implement industrial policy
and catch-up," the African Group maintained.
Shockingly, the "developed countries are suggesting that the
new approach to development is through the provision of time-limited
transition periods," it argued.
"Africa's experience in the Uruguay Round shows that the transition
periods do not work or at best are not an end in, and of themselves,"
the African Group pointed out.
"It is therefore unacceptable for some developed country Members
to treat the development aspects of the work of this Organisation
to conceptual and theoretical discussions at the Ministerial Conference,
while on the other hand seeking to extract multilateral disciplines,
including on new issues in areas of specific interest to them,"
Because of the recent developments in the WTO "on a so-called
reform agenda and potential withering away of the centrality of development
in the work of the WTO," the African Group proposed the following
* The WTO respond to the call by its founding fathers in the Marrakesh
Agreement to continue to make positive efforts designed to ensure
that developing countries, and especially LDCs among them, secure
a share in the growth in international trade commensurate with the
needs of their economic development.
* The G-90 S&DT proposal will be accorded the same treatment as
all other potential deliverables at the MC11. A meeting of the CTD-SS
will be convened to consider the draft Ministerial text.
* To reaffirm that the provisions for S&DT remain an integral
part of existing and future WTO Agreements.
*Â To instruct the CTD-SS to expeditiously complete the review
of all the outstanding Agreement-specific proposals and report to
the General Council, with clear recommendations for a decision, at
the next Ministerial Conference.
Any "discussion or dedicated session," convened to deliberate
on the topic of "Development" at the MC11 [Buenos Aires]
meeting,Â must address all the issues.
And they include how the African Group of countries "use trade
policy instruments to promote structural transformation, industrialisation
and sustainable economic growth for developing countries and LDCs."
Other related issues include: "how can we [members] ensure that
S&DT in the WTO is applied in a manner that is effective in addressing
the problems of those who need it? How have the current rules contributed
to, or constrained development for developing countries and LDCs?Â
How would the rules being proposed in all areas where there are diametrical
divergences contribute towards the development, and integration of
developing countries and LDCs into the multilateral trading system?
What is the nexus between domestic regulation and trade? What is the
relationship between the right to regulate and the inter-linkages
between regulations and broader domestic economic imperatives?"
Developed countries remained alarmed at the growing assertion and
unity among the African Group of more than 50 countries, except Nigeria
and in some cases Kenya, who are seeking to bring development to the
centre stage in the multilateral trading system and the World Trade
Organization, said a senior trade official from a major developed
country who asked not to be identified.
"We don't know what these African countries led by the African
Group are going to do at Buenos Aires on development because their
unity is a cause for worry," the official told SUNS.
"Why are they bringing development to Buenos Aires; what do they
want to achieve on these issues that call for various carve outs in
all WTO agreements," the official said.
In conclusion, the Buenos Aires meeting will remain as a testing group
for the African Group at a time when the industrialized countries
seem determined to run away with new issues without resolving the
outstanding Doha issues.