WTO MEETING IN NAIROBI HANDS AFRICA SOME HOPE FOR FAIRER TRADE
(Posted 20th December 2015)
An estimated 7.000 delegates, accompanying spouses and of course the global media streamed into Nairobi ahead of the 10th WTO Ministerial Conference which Kenya hosted between the 15th and 19th of December – a first also for the African continent.
While the visitors gave a much needed shot in the arm to the Kenyan hospitality and tourism industry – many delegates arrived early to take advantage of going on safari and many others stayed on to take a vacation over the festive season before returning home – were hopes for Africa high that a fairer trade deal could be accomplished.
Many African countries of course have embraced tourism as a major source of foreign exchange earnings and to attract Foreign Direct Investment in the sector. But more African economies still depend on the export of agricultural produce and even manufactured goods and it is here that the first two days brought out the worst between the great economic powers in the East and the West, at the expense of Africa.
It can perhaps be attributed to the Kenyan chairmanship of the conference, or more like chairwomanship, that in the end a compromise agreement was reached which will give Africa a foot in the door of global trade and an opportunity to take advantage of the opening of markets. Here, like on few prior occasions, was the saying true that Africa needs more Trade instead of more Aid and being in one of the continent’s major capitals may have swayed the opinions of delegation leaders to give in to some of Africa’s demands, but of course not all.
The main accomplishments now are that the European Union and the United States will half their agricultural export subsidies at the end of 2017 and will completely remove them completely during the period from 2020 to 2023. This will allow Africa to finally trade more competitively while farmers in the West will have to find ways and means to inject productivity increases to make up for the loss of subsidies.
Added to this came a change towards a quota free and duty free trade regime, which will benefit African exporters.
Improved Rules of Origin also mean that the local content can now be as low as 25 percent, down from previously 35 percent, without impacting on market access of manufactured goods. This move is crucial to bring additional manufacturing businesses to Africa and assemble goods for re-export, towards which end many countries have already established export processing zones.
Equally important is the agreement that countries now can exercise their discretion to grant preferential access of goods and services from the group of Least Developed Countries, in short LDC’s which however requires bilateral agreements. Those however no longer require sanction from the World Trade Organization as was the case before. Among the LDC’s in Eastern Africa are Uganda, Rwanda, Tanzania and Ethiopia, now able to capitalize on the various changes agreed at the 10th WTO Ministerial Conference which ended yesterday in Nairobi.
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