WTO and SDT
Africa in the Doha Round: dealing with preference erosion and beyond
The Doha round as an opportunity for building African competitiveness
Authors:
Y. Yang
Publisher:
International Monetary Fund , 2005
Improving market access in industrial countries and retaining preferences have been Africa’s two key objectives in the Doha Round trade negotiations. This paper argues that African negotiators may have overlooked the potential market access gains in developing countries, where trade barriers remain relatively high and demand for African imports has expanded substantially over the past decades.
The paper highlights that:
- a firm and ambitious commitment by African countries to bind and reduce all tariffs, which would lead to significant cuts on applied rates, would help create a more favourable investment climate that is desperately needed in many African countries
- a firm commitment would also help industries to adjust to changing trade conditions by anchoring business expectations
- an ambitious commitment to bind and reduce tariffs in Africa would also help open developing and industrial country markets
- less ambitious liberalisation in industrial countries would, in turn, reduce developing countries’ incentives to open their markets
- where needed, African countries could use special and differential treatment to reduce the adjustment costs arising from preference erosion and from their own liberalisation
- the erosion of Africa’s preferences will be an inevitable result of Doha Round liberalisation, but the adoption of a defensive strategy to minimise such erosion will not provide a lasting solution to Africa’s problems.
The paper concludes that seen this way, the Doha Round provides a unique opportunity to shift Africa’s negotiation strategy from retaining preferences to demanding reciprocity and from seeking special and differential treatment to building competitiveness.
