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Assessment of Impact of the WTO Provisions on Africa's Agricultural Exports

Written by: African Development Bank

Article Overview: Bold as the 1994 Uruguay Round initiatives were, scholars are not convinced that the real motive behind them is actually the revitalization of the developing countries' agricultural export trade. Most

Assessment of Impact of the WTO Provisions on Africa's Agricultural Exports

Bold as the 1994 Uruguay Round initiatives were, scholars are not convinced that the real
motive behind them is actually the revitalization of the developing countries' agricultural
export trade. Most of the developing countries are of no significant consequence in their
trade relations with the developed countries to whom their total trade is largely oriented.
Indeed, despite the changes in the WTO, developing countries will continue to have a
relatively weak bargaining position, as trade liberalization in the WTO remains dependent
upon developed countries’ willingness to reduce tariffs and domestic support in areas of
interest to developing countries. Moreover, trade in commodities has over the years been
governed by Commodity Trade Agreements. There is no reference in the WTO of what will
become of these Agreements. Their sustained use in the determination of commodity
bargains side by side with the WTO Agreements will continue to impoverish commodity
producers.
Aside from the observed internal weakness of the WTO, other factors contribute to Africa's
poor competitiveness, and might hinder her ability to truly exploit opportunities presented
by the WTO though the new system is expected to be problem free. These include:
· unfavourable supply conditions for cash crops,1
· poor and unreliable infrastructure (energy, water supply, transportation),
· poor access to credit and foreign exchange, resulting in major supply problems,
· lower labour productivity in relation to most Asian countries,
· rural-urban migration away from agriculture to industrial and white-collar
employment,
· pervasive poverty and poor health, and
· cumbersome export procedures.
All in all, the Uruguay Round of multilateral trade negotiations was not particularly
favourable to African countries. This is to some extent related to the low level of
participation by African countries in the negotiations. Also, the unfavourable results to
some extent reflect imbalances whose overall effect penalized African countries. In
particular, issues of great interest to African countries were not adequately covered in the
Uruguay Round negotiations. Worse still, African countries accepted many binding
obligations in exchange for non-binding promises from the developed countries of the
North. Also, in retrospect, African countries did not fully understand the implications of
many of the Uruguay Round agreements that they supported. Not surprisingly therefore, African countries have been faced with difficult administrative, institutional and financial
problems in trying to meet the obligations which form integral parts of the WTO
agreements. Many African countries have also encountered problems in trying to realize
the benefits which the WTO agreements promised. A new round of negotiations, the
Doha Round has been presented to developing countries as a means to redress the
demonstrated imbalances and inequities of the Uruguay Round. The Doha Round has
also been presented to developing countries as an opportunity to place more
development-oriented issues and proposals on the negotiating agenda.
Note that expanding market access for its exports is particularly critical for Africa since it
depends more on external trade than do other developing regions. In 2001, exports of
goods and services accounted for 34% of the GDP of developing countries but they
amounted to 40% of the GDP of sub-Saharan African countries. ECA (2003, p.20)

African Development Bank
Economic Research Working Paper Series
Enhancing Africa’s Trade: From Marginalization
to an Export-Led Approach to Development
Milton A. Iyoha
Professor, Department of Economics & Statistics
University of Benin, Nigeria
Economic Research Working Paper
No 77 (August 2005)

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  Export Promotion Strategies for Primary Products: New Approaches to Trade Development in Africa
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  Why Africa’s oil riches don’t make Africans richer
  2.2 Sectoral performance I: Economic Report on Africa 2007

Article Tags: african countries, agricultural export, asian countries, cash crops, commodity producers, commodity trade, developed countries, developing countries, export procedures, export trade, labour productivity, multilateral trade negotiations, pervasive poverty, poor health, revitalization, supply transportation, trade agreements, trade liberalization, urban migration, wto agreements



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