Emerging Markets, Frontier Markets

What Africa Should Be Pushing For In The WTO Talks

By Anzetse Were

200px-Africa_orthographic_projection.svg_1The World Trade Organisation (WTO) Ministerial Summit due to be held in Nairobi this week is important to Kenya for two reasons. Firstly, it’s the first WTO Summit to be held in Africa and secondly, it’s the first time the Summit is happened after what is largely considered to the failure that was the Doha round back in 2008. So what should Kenya, and indeed Africa, be pushing for during this round?

Africa should firstly, use this round to push for the reclassification of countries such as India, China and Brazil that still fall under the docket of ‘developing’ countries. Currently, such countries essentially are lumped together with Africa in negotiations despite the fact that over the past seven years these countries have significantly ramped up their presence and role in global trade. China’s share of global trade stands at about 12 percent, India stands at 2 percent and Brazil stands at 1.2 percent. Although Africa’s share of global trade is 3.5 percent that is a share at continental level; Kenya’s share of global trade is 0.03 percent. Therefore, Africa as a bloc should use this Summit as an opportunity to push for a more sophisticated classification of countries where the percentage of contribution to world trade preponderates rather that GDP per capita.

Secondly, Africa should continue to build pressure with regards to agricultural concerns. The main issue of contention African countries, Kenya included, have with current trade realities is that governments of developed economies still grant substantial subsidies to their farmers creating trade barriers to agricultural products from Kenya and other African countries. It is important that Africa continue to push for the removal of tariff and non-tariff barriers for agricultural commodities as these are a significant forex source for many African countries. Another issue pertinent to Africa is the issue of bolstering returns from natural resources in relevant exporting countries. Bear in mind that according to WTO the merchandise trade values in 2014 revealed a paucity of trade flows in natural resource commodities (such as fuels and metals) from exporting regions such as Africa. In fact the continent experienced a 7.6% decline in natural resource exports as lower commodity prices cut into export revenues. Thus again here the story is an old one; Africa has to push for a greater role in producing finished goods from raw materials as finished goods are not as susceptible to commodity price fluctuations.

The final point really has more to do with the work that Kenya and East Africa in general should implement if the region’s economy is to have a larger share of global trade. Firstly, the region should, together, devise a strategy through which they can bolster their share of exports globally. Secondly, although East Africa is one of the fastest growing regions in the world, tariff and non- tariff barriers such as over-stretched ports and time consuming customs and border operations hamper the ability of the region to play a strong role in global exports. Finally, there is a need for the region to hone into compliance to global technical standards as doing so will ease the region’s access to global markets.

This article first appeared in my weekly column with the Business Daily on December 13, 2015.

Anzetse Were is a development economist based in Kenya and a weekly columnist for the Business Daily.  Twitter: @anzetse, email: anzetsew@gmail.com

About Anzetse Were

I'm an optimistic cynic. Born in Africa, raised all over the world, I have a passion to see Africa take its rightful place in the world. Long weary of the Africa bashing, continental character assassination and negative branding I am determined to ask: What can Africa do right particularly with regards to economic development? Most of my pieces will be on Africa's economies. Some pieces will be more formal than others but the guiding thrust is to become one of the growing voices that believe in Africa...We're here to stay. Follow me on twitter: @anzetse

Discussion

One thought on “What Africa Should Be Pushing For In The WTO Talks

  1. Reblogged this on World Peace Forum.

    Like

    Posted by daveyone1 | December 14, 2015, 8:48 pm

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