Business Daily Africa
The trouble with our Africa trade negotiators
Written by Caryn Abrahams
November 26, 2008: Agricultural and development economies in Sub-Saharan Africa are the flavour of the month. The global credit crisis, wide-scale economic meltdown and financial recession have sparked a wave of interest about the implications for Africa. It is crucial that this discussion happens.
Increasing food prices, stagnant incomes, rising inflation and a global trade system that appears to oppose the welfare of the world’s poor, all have implications for food security and economic development.
While the world deliberates and symposiates, one wonders what the debates are at the home front, and where this leaves the vast majority of agricultural communities in Sub-Saharan Africa. Is the completion of the Doha Round, so eagerly desired by members of the G20, on the agenda at all? It does not seem to be.
The Doha Round of trade negotiations under the World Trade Organisation replaced the Uruguay Round under the General Agreement for Tariffs and Trade. The Doha Round began in 2001 with the general aim of liberalising trade, deregulating markets and reducing tariff barriers.
These negotiations have implications for state support for agriculture (through subsidies), global tariff and non-tariff barriers. It’s meant to benefit producers in the developing south and maintain an egalitarian trade arena between all competitors. This view holds to the argument that development will come through trade. Others disagree.
But neoliberal trade negotiation on the African continent is not stagnant because of protest from civil society - as one may expect.
While some may not completely agree with the idea of liberalised economic growth as the answer to Africa’s woes, national governments are keen to adopt such policies without the adequate follow-though of supporting local producers. So where does the problem lie and what is being done about it?
It seems most frustrating that there is no cohesive discussion about these global trade negotiations from Africa - one that needs urgent action. It seems unlikely that strong economies on the continent will lead the way.
South Africa’s role in the Group of 20 most influential global economies only differentially represents Sub-Saharan Africa. South Africa is by no means a trustee of the economic development of the region, although it is by far the strongest economy. In fact, countries in Sub-Saharan Africa are suspicious of South Africa’s parade of representing the best interests of the region in these talks.
This to some extent rules out South African trade ministers bringing on board others from the continent in lobbying for more just trade mechanisms in future Doha talks.
Even if this is a crude generalisation, there is no evidence to the contrary. South Africa, by being part of the G20 is well placed to begin such negotiations. But their schoolyard bully reputation makes them untrustworthy.
Perhaps the East African Community (EAC), with another strong national economy - Kenya - may be where African trade hopes could be pinned.
Regional economic communities exist to meet the cohesive trading strength of other economic communities with a counter-force. However, the collapse of talks in the EAC in November 2008, and the stalled creation of the Comesa customs union prove unreliable.
The launch of the free trade area in the Southern African Development Community (SADC) also seems to be a white elephant. The final negotiations between member states regarding agricultural produce and commodities have not even shown signs of life. Perhaps these discussions are held behind closed doors and are deliberately opaque.
Nonetheless they seriously disadvantage African producers - a fair per centage of whom are eager to make investments into expanding agricultural enterprise and competing globally.
Without the kind of regional trade arena that is safe, where trade parameters are clear and fair between member states, attempts to compete in the global market is already sabotaged.
This situation persists despite all the signs pointing to the need to make local agricultural economies competitive in the export market. SADC is an unfit body to represent the plight of its constituency.
So where should we pin the hope for African economies getting a fair deal in the global market?
Certainly the export-driven fair-trade market purports to support producers in the developing world. But even here the reach is small and larger structural trade imbalances are never actually counteracted. Perhaps we should be looking outside our borders for inspiration and a lesson or two.
The Indian Economic Summit held in November 2008 - that discussed securing the country’s future growth - had the Doha talks high on their agenda. There is a concerted effort to talk through the conundrum of protectionism and competitiveness to reach a proactive position on further negotiations. India locked horns with the US over special safeguard mechanisms (SSM).
The SSMs represented protection of certain commodities and removal of tariffs. There is a push from the Indian economic community toward proactively restoring the stalled Doha talks in July 2008.
What’s key here is that the SSMs, and the US, didn’t face opposition from other economies or economic blocs because some stood to gain and others were in no position to bargain. And Africa benefited from the SSM agreement being stalled because she is comparatively more susceptible to trade imbalances.
Abrahams is a doctoral researcher at the Centre of African Studies, University of Edinburgh. [email protected]