Will Africa get its fair share under new WTO leadership?

This week, Ngozi Okonjo-Iweala, was formally appointed as the seventh director-general of the World Trade Organisation (WTO), becoming the first African and the first woman to lead the organsation. With the new position comes expectations from African countries not only because of her African origin but also from long-standing challenges with regard to trade that the continent has been battling. For years, WTO has been said to have little interest in Africa and other developing economies and largely seen as working to promote interests of developed countries such as the United States. For instance, in October last year, private sector players from across the continent under the umbrella body Pan-African Private Sector Trade and Investment Committee (PAFTRAC) and Afreximbank highlighted a list of grievances and concerns which they noted should be on the to-do list of the new leadership of WTO. A survey conducted last year of over 200 African Chief Executives (Large firms, start-ups, and emerging businesses) noted that the private sector was calling for reform of the WTO with many adding that unfair trade practices severely constrain their companies’ expansion. Ngozi Okonjo-Iweala, the new Director-General of the World Trade Organisation. / Photo: Net Among the challenges that were noted by Afreximbank President Benedict Oramah included the continued exclusion from global trade development despite the continent’s key role. This, he said, had seen Africa’s global share of trade fall from 4.4 per cent in 1970 to 2.5 per cent today, whilst the share of Asia has risen from 7.7 per cent to 20 per cent over that same period. The African continent has rarely featured in ongoing discussions of reforms aimed at making the body more fit for purpose. “Whilst this is the result of numerous factors, including fragmented markets and persistent supply-side constraints, tariff escalations and stringent standards on final goods in developed economies have limited Africa’s potential to move up value chains,” he said of the factors that have led to the exclusion of Africa. Among requests by the continent’s private sector was consideration and support that will allow flexibilities and sufficient policy space to support local industries and advance development. “With the African Continental Free Trade Agreement (AfCFTA) coming into effect in 2021, we request that African integration under the AfCFTA and the establishment of an African Common Market is not undermined by multilateral negotiations,” the private sectors had urged. As a trade enthusiast, the Nigeria-born Ngozi is probably aware of the reservations and uncertainty by most African stakeholders with regard to WTO largely informed by their experience over the years. Andrew Mold the chief, regional integration and the AfCFTA cluster at the UN Economic Commission for Africa told The New Times that a key expectation from many African countries is addressing the lack of liberalization in high-income countries of their agricultural sectors, leaving little opportunities for export growth for African countries with a comparative advantage in agriculture. Mold figured that a major awaiting task also includes reenergizing multilateral processes and addressing trade disputes such as those between China and US, and the US and Europe have really damaged confidence in the global trading system. WTO’s trade dispute resolution mechanism, Appellate Body has been rendered inefficient as it has not had judges appointed to it. The Appellate Body which originally had seven judges now has only three judges leaving operations stalled. “The Trump administration blocked the appointment of new members. Fortunately, the Biden administration is abandoning the obstructionist approach of the previous administration, and I understand wants to reinvigorate the multilateral system. So there may be more political will to support the work of DG Ngozi Okonjo,” Mold said. In an op-ed piece published on Project Syndicate, Hippolyte Fofack the Chief Economist at the African Export-Import Bank (Afreximbank) called on the WTO to remove the artificial barriers and prejudicial hindrances that prevent Africans from unleashing their creative and productive energies. “A fairer, more equal, and more accessible global trade system must be at the top of the next director-general’s reform agenda. A WTO that is fit for purpose will also allow governments of smaller developing countries to act on behalf of their private sectors without fear or favour,” the economist wrote. African countries will also be looking to the WTO leadership for solutions to correct the current global trade regime which has also been mentioned as a cause for African countries’ structural balance-of-payments deficits and increasing external debt.

News

Will Africa get its fair share under new WTO leadership?