Can Africa Hold Firm? the World Trade Organization Summit in Cancun: After What Has Been Billed as the 'Mexican Stand-Off' at Cancun, Africa Has Two Choices-Bow to the Developed World's Dictat or Rely on Its Own Resources and Markets for Growth. Milan Vesely Reports

By Veseley, Milan | African Business, November 2003 | Go to article overview

Can Africa Hold Firm? the World Trade Organization Summit in Cancun: After What Has Been Billed as the 'Mexican Stand-Off' at Cancun, Africa Has Two Choices-Bow to the Developed World's Dictat or Rely on Its Own Resources and Markets for Growth. Milan Vesely Reports


Veseley, Milan, African Business


Following the collapse of the World Trade Organisation (WTO) meeting in Cancun, Mexico, African trade ministers are taking a long, hard look at their options; Plan A--the world's rich countries dropping away trade barriers for Africa's agricultural products--now an all but lost ca use. Plan B--strengthening regional co-operation and developing regional markets - now appears to be the best, if not the only, option.

"The collapse of the Cancun meeting has brought about a new alliance of developing countries;' Nigeria's Chineda Ibeabuchi said in reaction to the meeting's breakup. "The developing world spoke as one."

British environmental and social justice campaigner George Monbiot agrees. "Rich countries only engage in free trade once they are in a dominant position," he said, "the poor countries of today should be allowed to follow the same rules to development taken by the countries that ate rich, countries that protected their infant industries fiercely against international competition during their key development phases." Pointing out that such protectionism is against WTO rules, Monbiot claims that the US followed such protectionist policies to get to where it is today.

TAKING STOCK

Following the Cancun WTO meeting Africa's best economic brains are taking stock. Regional associations such as the East African Community, the African Union and the Economic Community of West African States are coming under added scrutiny, and ways of expanding their inter-member trading are taking priority. Some critics of the WTO are even advocating a purposeful turning of backs on the world body claiming that the WTO talks in Mexico had been doomed from the start as "it was obvious that Africa was better off without a deal that favoured rich nations".

Dennis Kabaara of the Nairobi-based Institute of Economic Affairs is one of these. He urges that Africa must "move away flora cash crop-based economies to find other ways of entering world markets," and his views are now being taken seriously.

"It's about setting up a rules-based regime that enables poorer countries to participate in world trade;' Kibaara points out. "What is happening is that the present system is not working. In principle we have this organisation, but in practice we don't have what we set up. Africa, and the countries within Africa, need to start thinking about our own domestic and regional agendas."

ADDING VALUE IS THE ONLY SOLUTION

Detractors of such a policy disagree, particularly African industrialists that have been able to take advantage of openings to foreign markets such as those embodied in the US's Africa Growth and Opportunities Act (AGOA).

"Adding value is the only way," says Ghanaian industrialist Prosper Atabia, whose Ghana operated sock factory has been one of the beneficiaries of the far-reaching AGOA initiative. "If you add value to any product in Africa you definitely make a profit. Whether tariffs go up or down then doesn't really matter"

Atabia believes that the same "added value" principle can be applied to Africa's agricultural products, developing manufactured, end-user products from the raw material being the only way to go. As an example he points out that a Ghanaian company that processes raw pineapple into a concentrate made more money than all of the Ghanaian farmers exporting raw pineapples to Europe combined.

The Cancun meeting threw into focus the fact that African producers of raw material are being denied access to developed markets through a variety of follow-on regulations. "When this whole kind of multi-lateral trading system was set up, the underlying assumption was that we were all starting from the same place" Kibaara claimed after the meeting. "The reality is that we are not. The people who are already processing agricultural products were allowed to retain their production while many countries in Africa were not," he added. …

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Can Africa Hold Firm? the World Trade Organization Summit in Cancun: After What Has Been Billed as the 'Mexican Stand-Off' at Cancun, Africa Has Two Choices-Bow to the Developed World's Dictat or Rely on Its Own Resources and Markets for Growth. Milan Vesely Reports
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