Africa calls for principles of fairer world trade to be worked out by July, UN says

African government ministers in charge of their countries' economies, meeting under the auspices of the United Nations Economic Commission for Africa (ECA), have called on rich countries in the World Trade Organization (WTO) to remove their high tariffs on developing country exports, their distorting export subsidies and other obstacles to fair trade by July.

"Africa's share in world merchandise exports fell from 6.3 per cent in 1980 to 2.5 per cent in 2000. Africa has hardly benefited from the boom in manufactured exports, with Africa's share in world manufactured exports remaining unchanged at 0.8 per cent in two decades," the Ministers of Finance, Planning and Economic Development said Saturday in the final statement of their annual conference, held this year in Kampala, Uganda.

Africa's efforts at diversifying its economies by including manufactured exports have been blocked by rich country tariff escalation and tariff peaks on manufactures from developing countries, with some peaks as high as 900 per cent, they said. "We strongly recommend that our development partners should take action to correct this," the statement said.

The Ministers praised the United States legislation known as the African Growth and Opportunity Act (AGOA) for opening a window for African goods to be sold in that country. In this regard, they agreed to write to the US Congress to express their concern over delays in extending AGOA provisions from 2008 to 2015.

According to the World Bank, the May 2000 AGOA could have increased Africa's non-oil exports by 8 to 11 per cent. Medium-term gains could have been greater if AGOA had not imposed certain conditions, including the stringent rule-of-origin stipulating that exporters source certain inputs from either within Africa or in the United States, it said.

In addition, Africa's apparel exports would drop by over 30 per cent with the dismantling of the Multi-Fibre Arrangement (MFA) at the beginning of 2005, giving African exports to the United States competition from many other apparel manufacturers, the World Bank said. If AGOA had provided unrestricted access, the negative impact of the MFA's end could have been nearly fully offset.

In multilateral negotiations, the question of cotton is critical, the ministers said. "This sector is a key contributor to GDP and export earnings, and to employment, in many African countries. Policies in developed countries that have led to overproduction and glutting of world markets have driven down world prices, thus playing havoc with African economies."

The ministers also saw problems in their domestic trade policies and pledged to find new, predictable sources of trade financing and ways of maintaining fiscal stability while advancing trade liberalization in their countries. Intra-African trade accounted for only 10.5 per cent of total exports and 10.1 per cent of imports, they noted.