The WTO Doha round impasse: Implications for Africa
Speakers:
Dr Christopher Stevens - Director of Programmes, International Economic Development Group, ODI
Discussant:
Dr Mareike Meyn - Research Fellow, International Economic Development Group, ODI
Chair:
Mark Lazarowicz MP
Christopher Stevens launched the discussion, explaining that the WTO is based both on a symbolism, that of free trade, and the reality which is one of mercantilism. The Doha round itself was launched as a response to 9/11 in part because of its free trade symbolism.
Bringing the Doha round to a conclusion would be a symbolic gesture to ensure that the world does not enter a new protectionist era. African countries would therefore be under increasing pressure not to block the Doha round but to prioritise and make precise demands.
African countries stand to lose more than they gain from the Doha round as they already have preferential access to their main export markets, where they would face increased competition, as well as their inability to capitalise on new markets due to a lack of supply capacities.
In trade negotiations there are generally information asymmetries. The lack of capacities constraints countries’ abilities to evaluate proposals and puts them under pressure to sign. In the Uruguay Round this resulted in the fact that countries had signed the agreement though they did not fully understand it. One proposal to overcome such information asymmetries is to include a “Development” clause, which would allow countries to opt out from certain provisions if there is a case to be made that they would hinder development.
Ransford Smith followed on by talking about the issue of Small and Vulnerable Economies (SVEs) within the WTO. The marginalisation of SVEs needs to be addressed, however the Developing Country group in the WTO would oppose a formal grouping of SVEs as it would undermine their single front.
Mareike Meyn highlighted that there were three lessons which could be taken from the presentation:
- The details of the modality have not been fixed – in the case of agriculture cuts of up to 60% had been agreed in general; however not for what products.
- Within the WTO there are fluid alliances which change depending on the issue at stake – almost all the African countries and SVEs have conflicting interests within the WTO as well as conflicting interests within their economies (producers vs. consumer countries).
- Will the revival of the Doha Round result in any meaningful compromise with large economies such as China, Brazil and India pushing for a real change?
The message was that it is important for African countries to prioritise their demands and to make sure they form a strong coalition with other developing countries in order to push through their main interests.
Description
Negotiations of the World Trade Organisation (WTO) Doha 'Development' Round stalled at the end of July 2008 for a number of reasons. The question as to whether talks can (seriously) be revived remains open. It is often argued that the success of Doha would only benefit big developing countries like Brazil, India or China while small vulnerable economies, and particularly African countries, would lose out. This argument broadly follows the assumption that African countries do not have the capacities to benefit from broad tariff cuts on the export side but would see their export preferences eroded. On the import side they would become more vulnerable when further reducing tariffs.
Based on the latest draft modalities for agriculture and NAMA (non-agricultural market access), how would small vulnerable economies in Africa and elsewhere be affected? What are African interests at WTO and is there a joint African position? What is the role of South Africa and to what extent do South Africa’s interests mirror those of other African countries? This meeting investigated these issues.