• WTO and SDT

WTO and SDT

Developing countries, and especially Least Developed Countries, were promised a World Trade Organisation (WTO) ‘Development Round’ at Doha in 2001, but Sub-Saharan African countries have gained little so far, seeing the discussions as irrelevant to them. This paper explores the reasons for this and argues that, if the Round is revived, Africa could benefit from the Round through a more aggressive stance on preferences.

Some of the key points raised in the paper are:

• many of the major impediments to African trade, such as macroeconomic instability, poor infrastructure and low and skewed foreign investment, are outside the scope of the WTO
• some of the probable outcomes of the Doha Round are likely to hurt rather than help Africa’s global economic integration. Preference erosion, for instance, is a real threat to Africa -for example, the end of the Multifibre Agreement has had significant negative impacts on African exports
• lowering Most Favoured Nation (MFN) rates will increase the competition that Africa faces, especially in the EU market, and might lead to competitive middle-income exporters such as Brazil replacing African ones

The author argues that African countries need to push for more concessions through Special and Differential Treatment and for Aid for Trade. He suggests three ways to improve preferences: withdrawing the time limitations that apply to almost all schemes; consolidating and deepening all existing preference schemes aimed at Africa, in a way that generalises access at the most favourable level; and extending preferences into areas of trade where they are currently non-existent.

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