The 10th Ministerial Conference of the World Trade Organisation (WTO) was held in Kenya from December 15 to 18, 2015. The event was attended by trade negotiators of the 161 WTO Members States including Ghana’s Ekwow Spio-Garbrah (PhD), Minister of Trade & Industry, and even delegates from non-member countries.
Development practitioners from around the world, those for “Long live WTO”, and those with “Death to WTO” placards, flocked to Nairobi, though rumour had it that the latter would have been fenced off at a nearby park.
WTO is a multilateral trading system firmly rooted in the principle of non-discrimination, that is, if a country, for instance, decides to make tariff concessions to its favourite country, it will have to extend these concessions to all other WTO Member States. Contrary to this principle though, the multilateral trading system allows countries to organise themselves in regional trading blocs and offer concessions amongst each other, as long as trade is not more restrictive to non-members after the formation of the arrangement.
Multilateral trading rules on goods, services and intellectual property are set on consensus, while the system has procedures for settling disputes. Though decisions are not made by voting, the WTO agreement allows for voting when consensus is not possible, on the basis of “one country, one vote”. Whether consensus or voting, decision making at the WTO allows small economies like Togo and Haiti to have equal say as US and Japan, however negligible the formers’ share is in world trade.
Qatar had hosted a similar event in 2001, the Fourth Ministeral Conference that led to the Doha Development Agenda, which has not been completed until now. On the basis of improving the trade prospects of developing countries, the Doha Round aimed to achieve major reforms in the global trading system through lower trade barriers and revised trade rules on about 20 areas of trade.
The single undertaking rule, in which is nothing is agreed until everything is agreed; the global financial crisis; the emergence of powerful developing countries like India and China; and new generation issues, among others are all reasons for failure to conclude the Doha Round in the last 14 years and subsequent 7 ministerial meetings.
Mainly disenchantment with the pace of negotiations has led many developed and developing countries to go the regionalism way. Europe and US have formed a trading bloc comprising 29 countries; US is already in a preferential trading arrangement with Australia, Singapore, New Zealand and eight other countries; whereas India and China together with 14 developing and developed countries are in a trade bloc as well. Perhaps what seems to be the saving grace of the WTO in the face of this wave of regionalism, is that none of the emerging countries are in a regional trade arrangement with the EU and US, a perfect reflection of what is happening at the WTO.
In preparation for the 10th Ministerial Conference of the World Trade Organization (WTO), the African Union (AU) held a Meeting of Trade Ministers on July 20, 2015, in Nairobi. During the deliberations, the AU Ministers were unanimous in reaffirming the strategic objectives for an African Trade Policy, which should be based on Africa’s industrialization in order to achieve the structural transformation of African economies.
During the meeting, Ekwow Spio-Garbrah advocated the setting up of an unprecedented “African Trade Information Sharing Portal to boost trade and investment ties between African countries”.
The Minister’s proposal should enable Africa – an emerging market – to be aggressively offensive and ambitious, to promote the private sector by developing the capacity of the Small and Medium Enterprises (SMEs). With this direction SMEs would improve their competitiveness in an export-led growth policy framework in the domestic market to compete in the prevailing global market place, which is governed by the rules-based multilateral trading system of the World Trade Organization (WTO).
Africans have not failed to note the mad rush towards regionalism by heavyweights in the trade world and not a single one of them is part of the game. Evidence is emerging that the formation of these mega blocs is poised to erode preferences and benefits African nations enjoy in some of the markets.
It is not lost on anyone that Africa is better off within the multilateral trading system where our exporters enjoy special and differential treatment provisions and exemptions and our negotiators have a say in global trade governance.
One can only hope the WTO Director-General, Roberto Azevedo, and Cabinet Secretary Amina Mohamed will make the Nairobi Round successful in terms of tangible benefits to Africa.
It remains to be seen if the Nairobi Round will deliver on most issues of interest to Africa; restore the faith of many of the countries currently pursuing regionalism; and come out with stronger and dynamic work programmes.
Martha Getachew works with CUTS International, a policy think tank based in Accra, Ghana. This commentary first appeared on Modern Ghana.
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