The Africa Commission – Comment

Image: Flickr, Biblioteca Nacional de España
Image: Flickr, Biblioteca Nacional de España

CLASSICFM: People say the way to empower Africa is to increase trade by bringing down trade barriers. Trade with Africa has actually fallen – as a share of international trade – over the last few years – at a time when it should be increasing. Commentary from Peter Draper at the SA Institute of International Affairs.

LINDSAY WILLIAMS: What is your impression of the Commission for Africa from a trade point of view – do you think it can make a difference?

PETER DRAPER: I think it’s going to be a very slow process, simply because there are huge obstacles in the way of Britain achieving much. If one looks at the WTO negotiations – which is really the centerpiece of global trade reform – the barriers to achieving an overall agreement are vast, I would say. So the question is what kind of role could this commission play in bringing about such an agreement? There, I’m a bit of a sceptic.

LINDSAY WILLIAMS: It says here ‘part of the plan understood to be in the commission’s report will be for developing countries to be allowed to sequence their own trade barrier reduction so as not to hurt their own poverty alleviation efforts.’ I don’t quite understand what that means, but I think what it is basically saying is that people like France want to stick their barriers up – their agricultural barriers in order to protect those poor little farmers in the Loire valley etc. – then they can do so. Is that your understanding?

PETER DRAPER: In that case it refers to developing countries – and there is quite a well established precedent in the WTO called ‘special and differential treatment.’ The idea is to allow developing countries more space to protect their economies, and to phase out tariffs – in this case, more slowly. Whether that’s in the interest of the developed nations is a highly contested issue. I would tend to argue that greater unilateral liberalisation is in a country’s best interests – provided it’s properly managed. So I worry a little bit about statements like that. Then, on the other hand, this is not something new – it is very much part of the Doha round of negotiations.

LINDSAY WILLIAMS: Can trade really empower Africa? Our performance, I think, was 0.6% of world trade about six or seven years ago – Africa’s now down to 0.2%. Are those figures right?

PETER DRAPER: If you look at the post Second World War situation – Africa as a whole accounted for about 7% or 8% of global trade. That’s down to about 2% now. It’s been a pretty consistent decline. Clearly, trade has an important role to play in Africa’s regeneration. I would just say, though, that of course there are big problems in the developed world’s subsidies – we all know the stories there. There’s an interesting dimension to this – which not many people understand – African countries actually have very good access, relative to other developing countries, into the markets of the north through a range of preference schemes. One thinks of Agoa, for example, or the ‘everything but arms’ agreement with the EU. Now if those subsidies are removed, and developed country tariffs come down – African producers would suddenly find themselves competing on a much more level playing field. This is one of the hot issues in the WTO. So what African countries are arguing for in the WTO is to actually maintain those preferences, which implies two things – one, that subsidies should be maintained in some form, and two, that tariff reductions in the north should not be too quick otherwise they might prejudice African exports.

LINDSAY WILLIAMS: So with all these advantages – why has Africa performed so badly? Is it because we rely on raw materials and commodities as our exports?

PETER DRAPER: There’s definitely that dimension. The WTO secretariat did an analysis of this some years ago – they showed that about 70% of Africa’s exports are commodities, and basically the countries export two or three, and they clearly are locked into commodity-dependent export paths, and the preferential arrangements play a role in that. But I would say if you take the focus away from the market access problems – which we all know – and look at supply-side problems on the continent, there you find a host of issues which have to be addressed and those don’t have much to do with what countries in the north are doing with their own trade policies. Things like putting infrastructure in place, building up financial systems, good governance. I think Jonathan Katzenellenbogen mentioned that there are good moves in this direction, but it’s a long slog.

LINDSAY WILLIAMS: South Africa’s role – once all the people from Europe and other African nations have flown out of Cape Town? Does South Africa now hold the initiative to keep the process going?

PETER DRAPER: The Commission for Africa is a UK initiative – whilst Africans are involved, it is really being driven from the UK. It’s actually not quite clear whether it’s the UK treasury, or Downing Street that’s driving it. So I don’t think South Africa would carry the can – Britain must now take it up… the recommendations.

17 Jan 2005