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    Trade Talks: African Businesses Raise Their Voices

     

     
     
    © International Trade Centre, International Trade Forum - Issue 2/2004

    African countries stand to gain from completing the current round of WTO negotiations. ITC is helping developing countries re-engage in world trade talks through a series of regional workshops that bring business and government together to assess their gains and sharpen negotiating strategies.

    Business in developing countries is advocating strongly for a return to the negotiating table, but it is an often-neglected voice in trade talks. ITC's Business for Development workshops help business leaders make their case with government negotiators and contribute to more targeted national negotiating positions. The series got off to a successful start in Nairobi (30-31 March), where participants from eastern and southern Africa discussed their expectations from the Doha Development Round of global trade talks, due to be completed by January 2005.

    Defending Africa's interests

    In Nairobi, business and government representatives from 12 countries - Botswana, Kenya, Lesotho, Malawi, Mozambique, Rwanda, South Africa, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe - exchanged views.

    "Africa, if it wants its interests to be taken on board at the WTO, has no choice but to remain engaged in the negotiations," declared Mukhisa Kituyi, Kenya's Minister of Trade and Industry.

    "But we must be equipped with the necessary information in order to be effective. Governments negotiate for their businesses. Governments do not know everything. Therefore they have to form a strong partnership with business in order to be effective… Businesses are part and parcel of the negotiations."

    ITC's Executive Director, J. Denis Bélisle, told the opening session that the goal of the meeting was "to help business people and governments come together in a strong public-private sector team to defend the interests of Africa in the trade negotiations being resumed in Geneva".

    Also attending the meeting were Kenya's Minister of Planning and National Development, Peter Anyang' Nyong'o, and the Chargé d'Affaires of the United States embassy in Nairobi, Leslie Rowe. Participants from the region's private sector included heads of chambers of commerce, leading exporters, commodity producers and consumer protection advocates. Participants heard presentations from African and ITC experts on the current state of the negotiations in Geneva on agriculture and market access for industrial products, and on the future of the textiles trade.

    Ms Rowe reasserted the US's commitment to the multilateral trading system and its willingness to reduce and eventually eliminate support to agriculture. "The challenge for each [WTO] member state is to take hard decisions about what concessions you are willing and able to make in order to make gains on other fronts. The business community's contributions to the formulation of a national negotiating agenda are vitally important to the success of the multilateral trade discussions," she added.

    Business must speak out

    "Successful negotiations for the Doha Development Agenda [Round] depend, to a large degree, on the quality of collaboration between national trade negotiators and business leaders," said Mr. Bélisle. The problem is that often the two sides do not talk to each other.

    He also commented that business in developing countries, particularly those where it was only beginning to build confidence in its capacities, must make its voice heard in government circles before talks start moving towards agreement. "It is no good waiting till the negotiators come home and then complaining that they failed to get the agreements the private sector needed," he said.

    Ramamurti Badrinath, ITC's Director of Trade Support Services, in promoting the concept of "business advocacy", said that the private sector in most developing countries - after years of keeping aloof from trade talks in the belief that they were best left to government negotiators - is now clamouring to be consulted, just as their counterparts in the North are regularly consulted by their governments.

    Peter Naray, ITC's Senior Adviser on the Multilateral Trading System, pointed out that he and his colleagues had ample evidence that African businesses were dismayed at the hiatus in talks in Cancún and wanted a meaningful return to the negotiating table as soon as possible.

    An important consequence of Cancún is the proliferation of bilateral and regional deals, which adds to the complexity of international trade and does not favour countries with smaller bargaining power. There is also uncertainty about the future of multilateral trade negotiations. "Uncertainty is the biggest enemy of business," said Mr. Bélisle. "Business people need to know what lies ahead to make decisions, including investment decisions."

    With the Nairobi seminar, ITC aimed at bringing the region's private sector and governments to a closer understanding and enable them to work out a coherent programme to continue the Doha Round negotiations.

    Meeting challenges ahead

    Speakers agreed that any delay in resuming negotiations in the Round will translate into lost opportunities for business as well as lost development opportunities for African economies.
    • Textiles. The problems facing the world's smaller textile producers - in the face of the coming challenge from China when the sector is absorbed into WTO rules from next year - emerged as a major theme at the meeting. Martin Viljoen, Executive Director of the South African Textile Industry Export Council, suggested that sub-Saharan countries come together under the banner "Brand Africa" to market their products. Jeremy Musgrave, Chief Executive Officer of National Blankets Textile, Zimbabwe, said African producers could ensure a small but sustainable part of the world textile and clothing market by uniting as "an honest player, Africa Incorporated".
    • Agriculture. While agriculture may be the most important trade issue for Africa, of all business groups, the continent's farmers are the least informed and involved in negotiations and other trade development measures, said Angela A. Wauye, an economist in Kenya's Ministry of Agriculture and Rural Development. "They need to form associations and consortia to benefit from synergy effects, economies of scale and technical efficiencies," she declared.
    • Regional trade agreements. "African countries can be served better by the multilateral trading system than by bilateral or any other type of trade agreements," said Kipkorir Aly Azad Rana, WTO's Deputy Director-General. Some participants argued that creating regional groupings both in Africa and with other developing countries could help the continent to promote its interests better in the Doha Round. Rosalind H. Thomas of the SADC (Southern African Development Community) Development Finance Resource Centre said this strategy was flawed as the interests of the players in such wide-ranging pacts "often differ fundamentally".
    Kenyan participant Job K. Kihumba, Executive Director of the Association of Professional Societies in East Africa, said, thanks to ITC, key business and government players understand what is happening in the region and can see the opportunities that the global trading system offers. "Above all it has become clear that it is vital for business to engage in trade negotiations. After all, at the end of the day it is business that knows what pinches."

    Participants also said that ITC should continue to provide business-focused analysis and updates on trade talks, including greater access to its tools and services on the issue, particularly Market Access Maps.

    The 2004 Business for Development series builds on the accomplishments of the seven Business for Cancún meetings, held in the first half of 2003. These regional gatherings resulted in 49 business participants joining national delegations at the trade talks. Both series have been funded by a range of donors, including Germany, the Netherlands, Sweden, Switzerland and the United States.


    ITC at UNCTAD XI

    • Business for Development - 8-9 June. This workshop, which ITC is organizing during UNCTAD's Rio Trade Week in Rio de Janeiro, is primarily for Latin American and Caribbean countries.


    Business advocacy on the agenda

    The seven regional Business for Cancún workshops in 2003 involved more than 300 business leaders and government negotiators from 87 countries. The objective was to promote closer partnership and intensify dialogue. The Business for Development meeting in Nairobi brought together 60 public and private sector participants from 12 eastern and southern African nations. The initiatives help clarify negotiating positions and boost business advocacy for trade.

    Other 2004 workshops include:
    • Transition economy countries: Sofia, Bulgaria, 18-21 May.
    • Latin American and Caribbean countries: Rio de Janeiro, Brazil, 10-11 June (in conjunction with UNCTAD XI, São Paulo).
    • Asian countries: (venue to be confirmed), September or October.
    • Central and western African countries: (venue to be confirmed), November or December.
    Papers and conclusions of the Nairobi meeting are available at http://www.intracen.org/worldtradenet



    For more information, contact Peter Naray, ITC Senior Adviser on the Multilateral Trade System, at naray@intracen.org