According to the UNIDO discussion paper “The Industrial Challenge Facing Africa in the Global Trading System” Africa’s merchandise exports are skewed towards fuels and mining products (59.1%), proceeded by manufactures (25.1%) and lowest in agricultural products (12.1%). Taking fuels, mining and agricultural commodities collectively, unprocessed goods accounted for over 70% of Africa’s merchandise exports; indicative of an asymmetry which needs to be corrected in the continent.
For as long as the WTO Non Agricultural Market Access (NAMA) negotiations disproportionately focus on the reduction of tariffs for competitive suppliers, it will be difficult for African countries to reverse this asymmetry given that, in addition to non tariff barriers (NTBs) in Africa and overseas, export capabilities are intricately linked to productive capacities both of which are very low in the continent. According to the Doha Ministerial Declaration of November 2001,
"Market access for non-agricultural products
We agree to negotiations which shall aim, by modalities to be agreed, to reduce or as appropriate eliminate tariffs, including the reduction or elimination of tariff peaks, high tariffs, and tariff escalation, as well as non-tariff barriers, in particular on products of export interest to developing countries. Product coverage shall be comprehensive and without a priori exclusions. The negotiations shall take fully into account the special needs and interests of developing and least-developed country participants, including through less than full reciprocity in reduction commitments, in accordance with the relevant provisions of Article XXVIII bis of GATT 1994 and the provisions cited in paragraph 50 below. To this end, the modalities to be agreed will include appropriate studies and capacity-building measures to assist least-developed countries to participate effectively in the negotiations."
For many African countries, new market access negotiations as above are less important than preference erosion which could weaken competitiveness for key products and reduce investment incentives. In fact, the recent study by UNECA has indicated that while an ambitious Swiss formula could increase Africa’s industrial market access opportunities, fundamentally for products Africa does not generally produce, it could also erode preferential margins for products currently exported to lucrative markets. Additionally, the application of the formula by the 8 African countries could in fact accelerate de-industrialization and lead to intensification of agro-industrial trade while diminishing the traditional industrial sectors. In light of the challenges facing the continent, it is important therefore for African countries to take stock of the development content arising from the NAMA negotiations, given that the finalization of modalities may take place shortly.
"Market access for non-agricultural products
We agree to negotiations which shall aim, by modalities to be agreed, to reduce or as appropriate eliminate tariffs, including the reduction or elimination of tariff peaks, high tariffs, and tariff escalation, as well as non-tariff barriers, in particular on products of export interest to developing countries. Product coverage shall be comprehensive and without a priori exclusions. The negotiations shall take fully into account the special needs and interests of developing and least-developed country participants, including through less than full reciprocity in reduction commitments, in accordance with the relevant provisions of Article XXVIII bis of GATT 1994 and the provisions cited in paragraph 50 below. To this end, the modalities to be agreed will include appropriate studies and capacity-building measures to assist least-developed countries to participate effectively in the negotiations."
For many African countries, new market access negotiations as above are less important than preference erosion which could weaken competitiveness for key products and reduce investment incentives. In fact, the recent study by UNECA has indicated that while an ambitious Swiss formula could increase Africa’s industrial market access opportunities, fundamentally for products Africa does not generally produce, it could also erode preferential margins for products currently exported to lucrative markets. Additionally, the application of the formula by the 8 African countries could in fact accelerate de-industrialization and lead to intensification of agro-industrial trade while diminishing the traditional industrial sectors. In light of the challenges facing the continent, it is important therefore for African countries to take stock of the development content arising from the NAMA negotiations, given that the finalization of modalities may take place shortly.
Similarly, since most African countries in the WTO (except eight), will not be applying the NAMA tariff reduction formula, the negotiations aimed at reducing or eliminating NTBs on products of export interest to African countries, such as fish, textiles and leather, should be even more importunate if development is to ensue. Additionally, to enhance Africa’s supply side capabilities, following the anticipated conclusion of the Doha Round, a comprehensive approach could require interventions in various negotiating groups including Services, Trade Facilitation, TRIPS and Aid for Trade. It is important to note that less than a handful of African countries, have made NTB notifications in the NAMA negotiations and there have been almost no negotiating proposals from African countries on NTBs. Given the open-ended nature of NTBs, including a lack of definition, it is likely that some issues could be addressed in the NAMA NTB negotiations with the appropriate technical assistance and coalitions.
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