The program, “Trade for Development: the Stakes for African Economies in the Current WTO Trade Round,” brought together key decision-makers in Brussels, Ethiopia, Ghana, Tanzania and Uganda to explore both opportunities and obstacles for Africa as negotiators approach critical trade talks in Cancun, Mexico in September.

The dialogue touched on the need for greater market access in industrialized countries, but in the context of a two-way street, in which developing countries create an enabling environment for expanded trade.

According to Frannie Léautier, Vice President of World Bank Institute, who opened the session, trade is one of the issues that are critical to the Bank's mission. “The poor have a huge stake in the decisions that will emerge from the current round of global trade negotiations,” she said.

The discussion focused on trade as an engine for growth and poverty alleviation in developing countries. But the participants agreed that for the engine to move the train the track must be cleared of obstacles. They called for a greater level playing field in global trade. To get there, they said, industrialized countries would need to lower farm subsidies and open markets to products developing nations can export. Meanwhile, African countries will need to strengthen their negotiating power, improve roads and ports, and make export-oriented industries more productive.

EU Commissioner for Trade Pascal Lamy conceded that the EU and the US maintain costly subsidy systems that “distort” trade in agriculture, and harm many farmers in developing countries. He said that the EU would continue providing support for its 11 million farmers, but in ways that do not distort world prices and damage African farmers. “What we can do, and what we must do, is to make sure that the way we support our agriculture is not harmful to developing countries; for instance, in providing total market access,” said Lamy. African participants strongly objected to current systems that increase tariffs when exporters process or add value to basic materials. They maintained that these measures hamper efforts to diversify African economies and create employment opportunities.

Ghana Trade Minister Alan Kyeremateng called for a “new paradigm” for development assistance, in which donors focus aid and technical assistance on helping countries take advantage of opportunities for freer global trade. He and other African trade ministers underscored the need for capacity-building in trade-related management. They called for improved negotiating capacity, better formulation of trade policies within countries, and new strategies to alleviate supply-chain bottlenecks that prevent African economies from capitalizing on greater access to developed-country markets.

“The only way we can take advantage of opportunities offered by trade is to be able to export, and then build up capacity to produce. And even if we are able to build that capacity, the other big challenge is supply-chain management, which is: what moves products from your country to the recipient country,” Kyeremateng said. The need for capacity building was expressed by all participants especially to access markets, even within the constraints of the existing trade system. Infrastructure constraints were repeatedly cited as critical to countries' ability to make expanded trade into an engine for growth and development. Ethiopia Minister of Trade and Industry Girma Birru, speaking about his country, pointed out that “in a country, where about 65 percent of the population lives half a day away from roads and basic infrastructure, whatever type of access may be given to the other side may not help.”

Juma Ngasongwa and Edward Rugumaya, trade ministers for Tanzania and Uganda, echoed sentiments expressed by the 100-odd participants in the four African sites in calling for a “level playing field” for global trade. Ngasongwa said that amidst economic powers such as the EU and the US, the situation could be likened to a contest of elephants and rabbits. He said: “We have to devise a mechanism where the rabbits can really compete in that kind of a situation.” One way to lessen that disparity, it was suggested, could be more unified positions among African countries. One participant in Ghana put it this way: “We should see each other as a continent, as a group of countries that can make an impact.”

Uri Dadush, director of the International Trade Department at the World Bank, urged participants not to ignore the importance of South-South trade where tariffs remain comparatively high. He also stressed that progress in opening trade barriers must go hand in hand with improved domestic policies, and enhanced capacity that help countries take advantage of trade opportunities.

Ian Goldin, Vice President for External Affairs at the World Bank, summed up the discussion by indicating that the dialogue had shown that all the participants were committed to making Cancun a real “development round.”

This videoconference, organized by WBI and the World Bank's Brussels Office, was part of the Global Dialogue series, intended to be a companion product to the release of the magazine Development Outreach.

Useful links: Click here. Development Outreach featuring a special report on Trade for Development. Click here to access the Global Dialogue on B-SPAN.

From left: Frannie Leautier, Vice President, WBI, and Timothy Carrington, Sr
Public Information Officer, World Bank

Alan Kyeremateng, Minister for Trade, Ghana

Girma Birru Minister of Trade & Industry, Ethiopia

Juma Ngasongwa, Minister for Trade, Tanzania

Ian Goldin, Vice President for External Affairs at the World Bank