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8-9 June 2005, Cairo, Egypt

Third Ordinary Session of the Conference of the African Union Ministers of Trade

Statement By Dr. Kipkorir Aly Azad RANA
Deputy Director-General
World Trade Organization

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Honourable Rachid, Minister of Trade and Industry of the Arab Republic of Egypt
AU Trade and Industry Commissioner, Mrs. Elisabeth Tankeu
Distinguished African Trade Ministers,
Excellencies,
Ladies and Gentlemen,

1.    Thank you for this opportunity to meet with you.

2.    On behalf of the Director-General, the WTO Secretariat would like to commend the Egyptian authorities for their consistently strong leadership on Africa's trade policy priorities. The Secretariat is grateful for Egypt's generous hospitality and excellent arrangements.

3.    African Trade Ministers have worked hard and constructively to provide the needed leadership to reach agreement on the 2004 July Package. Africa's commitment to the multilateral trading system and your close personal involvement were instrumental in putting the Doha Development Agenda (DDA) back on track. The July Decision would not have been possible without the political will of all Members to engage and compromise. Africa played a critical and decisive leadership role. I firmly believe that the July Package shows that the WTO can deliver and that a strengthened and dynamic multilateral trading system, sensitive to the development needs of Africa, will benefit all WTO Members. But beyond the progress reflected in the 2004 July Package, the challenge this year is greater.

4.    The Secretariat of the WTO is pleased that Africa itself in spite of its enormous challenges is responding with sure leadership. The Mini-Ministerial hosted by Kenya in Mombasa advanced the Doha Agenda on key aspects of the negotiations. Recently also, the Nigerian Trade Minister addressed the WTO African Group of Ambassadors, delivering important messages on behalf of President Obasanjo as Chairman of the African Union. Together, the outcome from Mombasa and President Obasanjo's messages underline the critical importance for a decisive push in the Doha negotiations, to ensure an ambitious outcome with meaningful development benefits for Africa.

5.    The outcome of this Ministerial meeting will be instrumental in determining the success of the 6th WTO Ministerial Conference in Hong Kong in December and in setting the stage for the conclusion of the Doha Development Round in 2006. Africa also has a rare chance to advance its trade and development goals by seizing the opportunity that will be presented by the G8 Summit at Gleneagles next month.

6.    African countries have a big stake in these multilateral trade negotiations and in building a stronger multilateral trading system. The DDA is vital to Africa's efforts to unlock the continent's economic potential. Enhanced trade will provide the needed acceleration and growth rates, income and welfare gains, necessary for the implementation of development programmes, poverty reduction strategies, and lock-in domestic economic reforms.

7.    A few weeks ago, African Ministers of Finance, Planning and Economic Development met in Abuja, Nigeria under the conference theme “Achieving the Millennium Development Goals in Africa”. The “Ministerial Statement” underscored the importance for the Continent, of a fair, non-discriminatory, predictable, multilateral trading system. It also called for the early conclusion and success of the DDA. I believe that the statement by Finance Ministers sets the foundations on which we, as a Continent, should build.

8.    I am hopeful that this meeting will contribute towards the efforts that are now being made by Members to meet the July “First Approximation” deadline and inject much-needed political impetus for a positive and meaningful outcome at Hong Kong. I seize this opportunity to reconfirm for Ministers that the WTO Secretariat stands ready to offer every possible assistance on technical requirements and any sound trade policy advice.

9.    Current negotiations in Geneva have entered a new, critical, interactive bargaining phase. We are now primarily focused on both technical work and issues requiring political engagement by Ministers. I call on Ministers to stay engaged between now and Hong Kong.

10.    Agriculture is central to the performance of African economies. On market access, while agreement was reached that reductions would be made through a tiered formula, we still need to negotiate the number of bands and the actual reductions to be made in each tier by both developed and developing countries. Following an informal Mini-Ministerial meeting in Paris, one major gateway issue is resolved, for the most part, namely, an understanding for the conversion of specific duties into their ad valorem equivalents (AVE). But beyond this, there are yet other issues to be addressed such as the designation and treatment of “sensitive” and “special” products, and the issue of preferences. On domestic support, while it is accepted that countries with higher levels of trade-distorting support will reduce much more than those with lower levels, the actual level of commitments to be assumed still needs to be carefully negotiated. On the last pillar, export competition, despite the important commitment to eliminating export subsidies, we still need to fix an end date. It is noteworthy to mention that LDCs are not required to undertake any reduction commitments during this round of agriculture negotiations.

11.    The WTO African Group in Geneva has made it clear that cotton, which is being treated within the framework of Agriculture negotiations, is a test of the development credentials of the Multilateral Trading System. The Group considers that the treatment of cotton will be a predictor of the ability of the Doha negotiations to produce concrete developmental outcomes through substantial trade reforms. Progress has been made on the trade and development aspects of the cotton issue, but much more remains to be done. The trade-related aspect is currently being addressed as part of the work on agriculture modalities. Progress has been made. A Cotton Sub-Committee, prioritizing the issue, has been established and is functioning. In this Sub-Committee, the African Group has proposed modalities for the treatment of cotton. Members remain committed to an “ambitious, expeditious and specific” treatment of the trade aspect of the cotton issue and are discussing the proposals. On the development aspect, as reported by the Director-General to the December 2004 General Council and in two subsequent updates by the Secretariat.

12.    The Non-Agricultural Market Access (NAMA) negotiations have intensified. The challenge in these negotiations is to reconcile divergent objectives. While some Members seek an ambitious outcome through substantial tariff cuts, others have stressed the need to take fully into account the concepts of S&D and less than full reciprocity in reduction commitments. Current efforts in the negotiations are focused on the possible coefficients in a “Swiss-like” formula to be used in the negotiations. Sectoral negotiations are now focusing on the possibility of using a critical mass approach. Major efforts are being made in Geneva from all sides to move towards convergence on these issues. The challenge is considerable.

13.    I know the discussions amongst senior officials in the past few days have underlined the importance of preferences. The July Package already instructs Members to take into account the particular needs of non-reciprocal preference receiving countries. The African Group and the ACP Group have submitted proposals which seem to be complementary in nature. While the African Group proposed the application of a correction coefficient to allow for lesser MFN cuts and longer implementation periods for products in which Africa enjoys non-reciprocal preferential access, the ACP Group has been very busy working on this list. This issue is a sensitive one as there are other developing countries who are seeking MFN tariff reductions on those same products. There will be a need to reconcile these two conflicting objectives.

14.    The services sector offers an enormous potential for development. There has been progress. But the drawback is that the number and quality of initial offers remain low. Only 61 offers have been received. Only six African countries have submitted offers. Similarly, few African countries made market-opening requests to their trading partners. Given the importance of services as an engine for growth, however, Africa urgently needs to engage seriously in these negotiations. None engagement will deny influence and marginalize. How could we miss this opportunity? This is the first development-focused trade round in the history of the Multilateral Trading System. Services trade offers prospects for a huge development dividend. Secretariat staff stand ready to provide any needed assistance for African countries to prepare their offers. The target date which was set in the July Package was last month (May 2005). At this stage, I can only urge you to table your offers as soon as possible.

15.    The focus of the Doha Trade Round is development. We must, therefore, work hard to ensure that the DDA produces a pro-development outcome. Discussions of the development dimensions of the DDA have been too narrowly focused on Special and Differential Treatment. The S&D negotiations are vital and there is a negotiating mandate. But surely, development must be more than Special and Differential Treatment. Nonetheless, the negotiations continue. Not much progress has been made. But we are seeing a new approach in the discussions. Further progress will only be possible with greater realism and flexibility. We need to keep in mind next month's (July 2005) deadline.

16.    Africa played a positive role in helping to launch the trade facilitation negotiations. Africa needs to maintain this positive attitude, and to actively take part in the process. The African Group in Geneva has recently tabled a proposal on identification of needs and priorities; technical assistance and capacity building; and special and differential treatment in the area of trade facilitation. Trade facilitation may seem a challenging task. It is nevertheless essential. Red tape, intransparency and low levels of governance, impede trade and increase transaction cost. Enhancement of trade facilitation drives growth and is a strong engine for development. Experience shows that small and medium enterprises and traders from developing countries are particularly affected by inefficient and cumbersome trade procedures. The domestic, economic and commercial value of reforming and modernizing border rules and procedures of African countries should no longer be delayed. Africa stands to benefit greatly from advancing work on trade facilitation.

17.    Many African countries are confronted by significant supply-side challenges. This is why the July Package acknowledges the value of technical assistance and support for capacity building in the area of trade facilitation. The World Bank and other relevant agencies will have critical and decisive roles to play in support of enhanced trade facilitation in Africa. I would continue to urge you to table any proposals as soon as possible before the compilation of a progress report for the Membership in July.

Honourable Ministers,

18.    This is a snapshot of where we are in Geneva in some but not all of the areas for negotiation. The road ahead remains replete with challenges. The DDA is behind schedule. Every new delay weakens the credibility and the value of the DDA. We need to approach our work over the coming months with a sense of urgency and determination. Ministers are well-placed to provide decisive leadership.

19.    Our greatest challenge in Africa today is to eliminate poverty. This is possible. However the indispensable starting point is to overcome the current insufficient growth rates in Africa, and to achieve high and sustainable growth rates that will generate sufficient resources for poverty reduction. This is why, an ambitious outcome from the Doha negotiations must be our fundamental objective. Protection will never be the answer.

20.    The WTO Secretariat attaches great importance to building institutional and human capacity on multilateral trade issues. I have been privileged to have supervised the Secretariat's technical assistance programmes over the last three years. I know that we have made progress, although much more remains to be done. I also know that Africa receives the most WTO technical assistance activities, in comparison with any other region in the world. The WTO cannot, however, handle the job of capacity building on its own. We have developed a coherent strategy with development agencies and bilateral donors to ensure that resources are allocated to tackling the supply-side constraints that are preventing African countries from fully utilising market access opportunities. In this regard, the Integrated Framework (IF), the Joint Integrated Technical Assistance Programme (JITAP) and the Standards Trade and Development Facility (STDF) are vital instruments for addressing these challenges. We will continue to improve on implementation.

In conclusion Mr. Chairman,

21.    2005 provides Africa with a rare opportunity. Following our meeting here in Cairo, three crucial meetings will convene in the next few months, which will have an important impact on Africa's development plans. In July, the Gleneagles G8 Summit will discuss the UK Commission for Africa Report (CFA) and the three-year review of the Africa Action Plan. In September, the Millennium Review Summit will take place in New York, and last but not least the WTO will hold its 6th Ministerial Meeting in Hong Kong. Today, we can send a message of hope for Africa and the world. African countries, comprise 41 out of the 148 Members of the WTO and are active players in the negotiations. Africa has a significant and growing stake in the negotiations and must remain engaged so as to highlight its interests and concerns. With your goodwill, this year should mark the “Year for Africa”. Africa can send out a message of reform and liberalization, ambition and development.

Thank you.

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