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Removal of Barriers and Enhancement of Market Access: Barriers to African External Trade

Guest post by: African Development Bank

Article Overview: It is now widely believed that a major challenge to the expansion of trade by African countries is that of increasing access to developed country markets.

Removal of Barriers and Enhancement of Market Access: Barriers to African External Trade

It is now widely believed that a major challenge to the expansion of trade by African
countries is that of increasing access to developed country markets. In other words, if
Africa’s external trade is to be significantly expanded, ways must be found to remove the
external barriers to African trade, viz., lack of access to developed country markets,
reduction of tariff and non-tariff barriers to African agricultural exports, reduction or
elimination of trade-distorting domestic farm supports and elimination of export
subsidies in developed countries.

It had been hoped that the Doha Round of WTO would be used to solve the problem of
improving access for agricultural products exported. Unfortunately, the Doha virtually
collapsed as a result of the inability of Japan, EU, and the US to agree on tariff
reductions. However, there is no choice but to continue to negotiate to bring down tariffs
on agricultural products of developing countries and to reduce trade-distorting export
subsidies and domestic subsidy to farmers in developed countries. These issues will now
be addressed at the WTO meeting scheduled to hold in Hong Kong in December 2005.
An important initiative likely to improve market access for Africa is the US’ African
Growth and Opportunity Act (AGOA). This initiative was introduced in 2000 and is
designed to give most African countries preferential access to the US market for some
categories of products, mainly petroleum products, agricultural commodities, and
manufactured products such as textiles. Already, exports from Gabon, Lesotho,
Madagascar, Mauritius, Nigeria, South Africa, and Swaziland have increased as a result
of AGOA. More countries are expected to benefit in the future. While beneficial to
Africa since it gives African countries an advantage over other regions, its benefits are
rather limited as it does not cover all exports from Africa and there are some stringent
“rules of origin” requirements enshrined in the Act of Congress.
Also, the EU’s “Everything but Arms” initiative, approved in 2001 has the potential to
improve market access to the EU for African countries. The objective of the EU’s
initiative is the elimination of quotas and duties on all products except arms imported
from 49 least developed countries, most of which are in Africa. Proper implementation of
this initiative is likely to significantly increase Africa’s exports to the EU in the years
ahead.

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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Article Tags: african countries, african growth and opportunity act, agricultural commodities, agricultural exports, agricultural products, country markets, developed countries, developing countries, export subsidies, external barriers, farmers, lesotho, market access, petroleum products, rules of origin, stringent rules, subsidy, tariff barriers, tariff reductions, tariffs



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