12 December 2005

Africa: Hong Kong WTO Ministerial Conference: Africa Wants Access to Northern Market

The interest of Africa in the Hong Kong Ministerial Conference of the World Trade Organization (WTO), which would begin on Tuesday, is to have access to the Northern markets for tropical products, and to safeguard African markets from heavily subsidized exports dumped onto their markets.

"Africa will also like some of their agricultural products to be designated as special products for promotion and protection from unfair competition."

Speaking at an Australian High Commission media briefing on WTO and development on the subject, "What the Doha Round means to Ghana" in Accra on Tuesday, the National Advocacy Officer, Oxfam Baba Tuahiru, said the reaction of rich countries from EU and US is that acceptance is conditional to Africa opening up their markets to non - agricultural imports from the North.

On domestic support, the proposal is for rich countries to cut down their support to local farmers and to gradually phase it out. Africa is demanding cuts in subsidies for agriculture products that are exported and dumped onto African markets.

The EU and US have promised cuts but it appears this is more on aggregate support and not on products that are of relevance to Africa.

There is also a sort of box shifting where subsidies in the Amber and blue boxes are pushed over to the Green box just to legitimise the payments.

With the export competition where a lot of money is paid out as export subsidy, the EU and US have agreed to end it without specifying the end date.

With these three scenarios, it appears Africa would not benefit much from the outcome of the Round. This is because the kind of market access that may be given to developing countries will not be based on relevance, and so wouldn't have any impact.

Secondly, if the proposed EPA between EU and ACP is endorsed, Ghana will seize to continue to gain its current preference treatment into the EU market by the end of 2007 and would have to compete on a level playing field in the EU market. There is also no guarantee that the current tariff levels on some processed or value added products such as chocolate will not be maintained or even increased, using the rules of standards.

On the other hand, heavily subsidised agricultural exports from EU and US such as rice and possibly poultry will continue to be dumped into the Ghanaian market provided these are designated as special products to the rich nations and so legitimate for special treatment under WTO rules.

However, Ghana will still have space under her agricultural tariff schedule to increase tariffs to protect local producers.

Under the non - agricultural market access negotiations, if developing countries including Ghana succumb to lowering tariffs as a condition for agricultural reforms in rich countries, it would mean having their markets flooded with industrial imports and that would spell an end to the quest to industrialise.

This is because Ghanaian industries are in their infant stage and need protective support as happened in today's developed world when they were developing. Meanwhile, industrial products from Ghana will continue to face tariffs if they are the sensitive types to the EU and US.

There are also negotiations going on around General Agreement on Trade in Services (GATS). This has to do with the commercialisation of services namely finance and basic services.

Of relevance to Ghana, is the issue of water, education and health. From current events, Ghana seems to be threading on the line of public / private partnership in water management which is a form of privatisation and captured by the GATS, since there is both commercial interest and participation of the private sector.

The fear and danger here is that to satisfy their profit motive, the private entity irrespective of the regulatory measures put in place would always try to jump rules to maximise profits, and water is a kind of utility that should not be subjected to private management, for it is life.

In a nutshell according to Mr. Tuahiru, what the Doha Round means to Ghana from the scenarios given are as follows: About 60% of Ghanaians are dependent on agriculture and related activities for their livelihood, and so the continuous influx of food products, agro - processed products is a threat to employment, food and livelihood security.

Already, about 59% of food crop farmers fall below the poverty line and this is very likely to increase, as their produce would be crowded out of the market with imports. Ghana needs to move away from its current short term food relief measures and to get serious at long term food security plans of growing her agriculture through promotional and protective support.

Ghana is trying to grow an export-oriented economy and the EU is the biggest market for Ghana's export.

In line with WTO compatibility, the preference enjoyed by Ghanaian under the EU / ACP trade relation ends in December 2007 and so Ghana will be competing on equal playing field for EU market. Meanwhile there is no guarantee that the Doha Round will make up for this loss. The likely effect therefore is that Ghana's export revenue would be affected and this could go a long way to retard social and infrastructural development.

There is no guarantee that the Doha Round would change anything on value additional exports affected by tariff escalation. The only thing that we can be assured of is that the fierce competition that will now come from the rest of the world will affect our local industries such as those producing chocolate and fruit juices for export. Our industrialisation drive may slow down.

All these have direct bearing on food and income security, poverty reduction, rural development, employment, access to safe drinking water, and Ghana's export drive. In short, he said Ghana's desire to grow an export-oriented economy to meet the millennium development goals and to become a middle income country by the year 2015 is under serious threat, given the trend of events in the on-going Doha negotiations.

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