Global Policy Forum

By Thompson Ayodele

"Many African countries opened their markets and ended farm subsidies in response to advice and pressure... Burkina Faso does not need charity, it just wants World Trade Organization members to live up to the organization's principles." President Campore of Burkina Faso made this heart-rending statement expressing his frustration at the unfair trade system which African countries have been subjected. He together with other African leaders is demanding the developed world members of WTO to do what they preach about free trade.

African presidents in various fora have continued to favour more increased trade as the way out of their economic woes. When the Fifth WTO Ministerial Conference comes up in Cancun, Mexico, between September 10 and 14, the items slated for negotiation are important to African countries. Coming shortly after the war in Iraq and President Bush's $15 billion package to fight the scourge of AIDS in Africa, the meeting would be a test case for developed world leaders who still advocate free trade as the panacea for the continent to escape the mire of poverty and combat HIV/AIDS.

One central issue has been market access for developing countries. At Doha, WTO Ministers committed themselves to the new round of trade negotiations that would take cognizance of the concerns of developing countries with respect to agricultural products. It is a misnomer to call the Doha Round a development round when both the U.S. and the E.U are doing the exact opposite of what they are telling the African countries about free trade and market access. The attitude of some developed nations has put a question mark on their commitments to free trade.

African countries were cajoled to participate in the Doha Round. They were assured that there would be trade concessions in agriculture. Instead of getting the developed countries to dismantle their agricultural subsidies and open their markets despite such promises, there are no visible signs of progress at least for now. There have been restrictions on products from Africa. Following the Doha round, trade negotiators were expected to conclude negotiations by March 31, 2003. From all indications, negotiations have been halted with respect to agriculture. Since the prospect for reform in agriculture appears bleak, the faith of many African countries in WTO continues to wane. The agreement is tacitly seen to promote the interests of rich countries member of WTO.

There was a pledge to improve market access of all WTO members during the last G.8 Summit in Evian. This could merely be to entice African countries to ensure their participation in Cancun. African countries should read between the lines. The tone for Cancun had been set in Evian. Commitment to agriculture reform was swept under the carpet while a strong fillip for more overseas development assistance became more strident. It might be futile for the continent to participate in Cancun unless there are concrete signs that various trade roadblocks would honestly be eased.

To throw a spanner in the works of agriculture reforms, it should not be a surprise if African nations again are told to embrace more foreign aid in lieu of trade reforms and market access. This diversionary strategy was employed in Doha when the EU supported the right of African countries to manufacture and use patent drugs without the agreement of the patent holders during emergencies thereby downplaying agriculture policy reform. Poverty in Africa is caused largely by lack of access to rich countries markets. This in turn is the cause of the horrible devastation caused by HIV/AIDS.

Rich country members of WTO might again be tempted to force Africa to open its market while protecting theirs. The real losers are, of course, farmers in poor communities in Africa where agriculture is the main source of income for millions of people. African Presidents such as Olusegun Obasanjo of Nigeria, John Kuffor of Ghana, Yoweri Museveni of Uganda and Abdoulaye Wade of Senegal understand that economic advancement in Africa can only be realized through free trade and policies that promote free market. But free trade can only contribute and make impact in Africa's march to economic advancement when trade distortions and trade hypocrisy cease.

Africans are predominantly farmers. Their agricultural products should have access to developed countries markets. Despite promises to end subsidies, farmers in developed worlds continue to enjoy subsidies amounting to over $300 billion yearly. This is responsible for over-production and export dumping. Export dumping displaces local producers who cannot compete with artificially depressed prices of the subsidized imports. It also undermines the livelihood of farmers in Africa. Subsidies distort prices and keep Africa exports out of rich members' markets. Aside from undercutting African farmers in their domestic markets, price-distortion policies drive hordes of African farmers off their lands and make them urban refugees. This makes Africa to be import dependent which destroy Africa capacity to export.

President Obasanjo has been globetrotting seeking partners in trade. President Museveni of Uganda said real money would come from trade. President Wade of Senegal also observes: "I have not seen a country develop itself through aid or credit." The late Peter Bauer, a renowned development economist, also argued that throughout history countries both in the West and Third World moved from poverty to prosperity without external donations. The lesson of foreign aid in Africa is not lost on the current leaders. The continent received $83 billion in aid between 1980 and 1988. These failed to spur economic growth and cushion Africa's economic woes. Interestingly in the same period the standard of living plummeted by 1.2% a year.

African leaders have seen the miracle which trade can perform and discovered the futility of foreign aid. They can learn useful lessons from the take-off into sustained economic growth, first in Western Europe and North America, then in Japan and East Asia. It is a futile attempt to dangle more aid to this crop of African leaders. They instead want the continent products to compete favourably in the world market. In this unfair trade regime, Africa is on the debit side. For instance, US cotton subsidies have depressed cotton industries in West Africa and Central Africa. Had free trade indeed free, Burkina Faso, Benin and Mali would be major players in the world cotton trade.

The World Bank has estimated that West Africa lost over $250 million as a direct result of subsidies. According to Oxfam, the amount spends on cotton farmers in the US is more than the entire GDP of Burkina Faso. Because cotton farmers in the US enjoy advantages in terms of subsidies which keep cotton price low, Burkina Faso loses 1 % of its GDP and 12 per cent of its earnings. Mali lost $43 million in 2001 due to lower export earnings as a result of competition from subsidized US cotton. During the same period, it received $37 million from overseas development assistance. As a direct result of this unfair trade, 80 per cent of farmers in Mali would continue to wallow in poverty. Also EU dairy subsidies continue to impoverish dairy farmers in East Africa.

The world trade is far from being free or fair. The records clearly show that rich country members of WTO continue to speak with both sides of their mouths. While African countries are ready to further open their markets, rich countries should reciprocate by giving them access to their markets and ending trade-distorting subsidies. Following a pressure from the US, the EU in the last one week promised to reform its agriculture policies. Declaration of intent is higher than actual implementation among the EU members. Until something concrete is done, African countries would see the whole WTO agreement as being skewed against the continent.

The primary aim of the WTO is to liberalize world trade and place it on a secure basis, thereby advancing the economic growth and development of both rich and poor countries. This is the time to reassure African countries that promise, trade concession and agreements would indeed be kept. It is height of hypocrisy to slam other barriers either on health grounds or under the guise of protecting the environment.

These specific interests' protections are inconsistent with WTO's rules and meant to keep Africa perpetually poor. Africa's concerns and frustrations should be specifically addressed during the Fifth WTO Ministerial. If they are not anti-globalization activists, who have dubbed WTO agreement as a well-orchestrated ploy by rich countries to subjugate and further keep poor countries poorer, might have public opinion on their sides. This would definitely becloud the gains of globalization.

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