DEPUTY DIRECTOR-GENERAL ALAN WM. WOLFF
Mr. Wamkele Mene, Secretary General, AfCFTA Secretariat,
H.E. Mr. Ali Gido Adam Bashr, Minister of Trade and Supply of the Republic of the Sudan,
Ambassador Mr. Albert Muchanga, Commissioner for Trade and Industry, African Union
Ladies and gentlemen,
First, I would like to thank the Government of Egypt and the Cairo International Center for Conflict Resolution, Peacekeeping and Peacebuilding for inviting me on behalf of the WTO to take part in the Second Annual Meeting of the Aswan Forum for Sustainable Peace and Development. I am very pleased to be with all of you virtually for this session on “From Rapid Economic Recovery to Structural Transformation: Harnessing Trade for a Peaceful and Prosperous Africa”. I wish that it were an occasion to return to Egypt in person.
The multilateral trading system — with its over seventy years of history — is at a critical juncture. The outbreak of COVID-19 is exacerbating existing insecurities around the world. African countries have been especially hard hit by the economic impact of the crisis which has increased social tensions and the likelihood of conflict. Relief from the pandemic, its challenges to health, as well as to African economies is far from assured. Home to many fragile and conflict affected countries, the continent is under extreme pressure to find the means for stimulating post-COVID-19 recovery.
Economic stability has been hampered by political instability, structural challenges, such as lack of institutional and legal mechanisms, recurrent external trade and climate shocks and balance of payments problems. Africa must not only meet the challenge presented by the COVID-19 pandemic but also overcome the structural issues that long pre-dated it. Tackling these challenges will allow countries to transition from fragility to stability.
The World Trade Organization, with its 164 Members, is the only international organization regulating the rules of trade between the nations of all continents. Since 1995, it has served as a forum for negotiating trade agreements, settling trade disputes, and supporting the development needs of its developing and Least Developed Members. Through the pillars of trade openness, nondiscrimination, rule of law, and predictability and transparency, the WTO has been essential to assuring freer and fairer trade.
Last month, the WTO concluded an historic selection process for its new Director-General. For the first time, three outstanding candidates from African countries were nominated by their respective governments to lead the multilateral trading system. The energy, ideas, and commitment brought by these individuals, with the full support of African members, energized the WTO membership with a strong sense of optimism that the future of the multilateral trading system would be more responsive to the diversity of its members and their needs. We are lucky to have a strong advocate of regional and multilateral integration from the continent now leading our organization — Director-General Dr. Ngozi Okonjo-Iweala.
In parallel this year there is the very positive creation of the African Continental Free Trade Agreement (AfCFTA), a milestone in the quest of regional development. The WTO and AfCFTA are intertwined, as are all regional trade agreements since they all rest upon the rules of the multilateral trading system. A challenge for African leaders and the 164 Members of the WTO is how best to harness the new energy from the AfCFTA and the re-dedication of the WTO under new leadership to recover the ground lost to development on the African continent during the pandemic. The time is overdue for Africa to gain solid benefit from both regional and global economic integration. This must remain a major objective for both Africa and the multilateral trading system in which Africa has a strong voice. All 44 African WTO members and nine WTO observers are signatories to AfCFTA; and of the 24 countries seeking to join the WTO, nine are from Africa.
In this new chapter for the world trading system and intra-African trade, the WTO, through its Trade for Peace Program, seeks to harness trade to alleviate the economic and social consequences of conflict and crises, such as the recent pandemic, by promoting an interdisciplinary understanding of trade, peace and humanitarian approaches.
Trade and peace cannot be pursued separately — they are intertwined and mutually re-enforcing. This is not a new idea; it was championed by Woodrow Wilson — a President of the US who a century ago linked the two. He posited 14 points to countries seeking to sustain the peace after the First World War(1)(2). The one that is most relevant for our conversation today called for the removal of all economic barriers and the establishment of equal trading conditions among all nations, as far as possible. His approach, adopted but not implemented in 1919, inspired the post-Second World War leaders to establish the multilateral trading system and agree in 1947 to a broad set of fundamental rules in the form of the General Agreement on Tariffs and Trade (GATT).
Today, the WTO, which encompasses the GATT, co-sponsors a Trade for Peace Program which aims to build upon the use of the linkages between peace, prosperity and strong economic interconnectedness between nations.
In 2017, a group of fragile and conflict-affected Least Developed Countries in the process of accession to the WTO — Comoros, Sao Tomé and Principe, Somalia, South Sudan and Timor-Leste — came together with recently acceded LDCs — Afghanistan, Liberia and Yemen — and made the case that trade and economic integration can be employed to promote inclusive and sustainable peace, particularly for their countries.
During the WTO’s 11th Ministerial Conference in Buenos Aires in December 2017, Ministers from these countries established the g7+ WTO Accessions Group. This group captures the original raison d'être of the WTO — to contribute to global peace and stability — which they understand remains critical today.
WTO Accession and african countries
Through the Trade for Peace Program, the WTO remains committed to fostering peace through trade using WTO accession. WTO accession represents a tool to strengthen the rule of law, ensure policy predictability and transparency, and promote international trade cooperation. It emphasizes the presence of necessary frameworks and practices that are required to create an environment, that foster economic development, that raises the standard of living for all, that attract foreign investment, and that establish the conditions for these countries to move out of a state of fragility or conflict into a state of stability, peace and economic well-being.
WTO accession can be a lengthy process. It requires high level political commitment coupled with deep domestic economic reforms. Market access and rules-based commitments are made in the process of years of negotiations. These commitments reflect the current commercial interest of both existing Members and the acceding country. This continuing updating of the rules creates deeper and more comprehensive commitments, suited to the world of today and not just to the times before the WTO was founded, now over a quarter century ago. As a result, this is one part of the WTO where WTO reform continuously takes place.
This process of updating should be recognized as a major benefit for the countries that are seeking to accede. Their domestic reforms will consequently be deeper than those who acceded earlier and original Members (those who were GATT Contracting Parties). It must also be recognized that this can be a substantial burden for those who may be least likely to have the capability to undertake what is asked of them. Care must be taken to phase in obligations paired with capabilities, and to provide appropriate assistance for their efforts. If the average time for an accession is still very long even where there has not been an interruption due to domestic strife, change of governments or other factors beyond reasonable control of the acceding government, it has been suggested that consideration should be given to improve in the accession process. This includes the idea of “provisional Membership” that is right-sized in terms of both obligations and rights, comporting with capabilities of the acceding country. Another idea is to empower the Secretariat to be of greater active assistance to all acceding countries who require it.
WTO Members should consider whether an intermediate stage of “provisional Membership” should be considered, right-sized in terms of both obligations and rights, comporting with capabilities of the acceding country. In addition, the Secretariat should be empowered to be of greater active assistance to all acceding countries who require it.
A larger question relates to the rights and obligations of the countries that have acceded since the WTO was founded. This is an issue often brought up in WTO discussions, namely whether the so-called original Members will “true up”, that is adopting a similar level of obligations as the acceding (Article XII countries) have taken on. The issue is broader, the entire organization has to revisit the question of balance for the WTO. There needs to be a recognition that change is continually needed to ensure a future less troubled by balances struck in the past under very different circumstances. Members' fortunes are not static in international trade. They are always changing. Sometimes countries become much stronger, more prominent in trade, and sometimes their share declines. A frozen set of relationships creates a lack of fairness in what should have been an institution built upon ongoing negotiations. In the world of industrial materials, flexibility is required when the materials are subjected to stress or they will fracture. Any international framework, as is the case with private contracts, must have some flexibility built in to recognize and deal with new conditions.
For a truly inclusive multilateral trading system that can meet increasingly globalized challenges, the WTO must represent the needs and interests of all members of the international community. The efforts of the 24 ongoing accessions signal progress towards that goal. In this context, the WTO seeks to support the accession of African countries that remain outside the Organization.
There are nine African countries now in the process of acceding to the WTO.(3) Countries from the Horn of Africa are currently the most active:
- Early last year, Ethiopia resumed its accession process after nearly 8 years of dormancy by holding its 4th Working Party Meeting.
- Following the signature of the Juba Peace Agreement and the removal of Sudan from the United States list of Countries Sponsoring Terrorism last year, that country has renewed its commitment to advancing its accession process. With the appointment of a new Trade Minister last month, Sudan is taking decisive steps to reap the full benefits of trade integration through WTO membership, including the holding of an Informal Working Party meeting next week at the WTO.
- South Sudan is also engaged in its accession process. Its first Working Party meeting was held in 2019.
- Somalia hopes to hold its first Working Party Meeting this year.
- To the south of the Horn, in the Indian Ocean, Comoros represents one of the most advanced among all on-going accessions.
Moreover, representatives of Members from the region are keen to chair the working parties of African acceding governments, Egypt in the case of South Sudan and Morocco in the case of Comoros.
In spite of many hurdles, the status of accession of fragile and conflict affected countries to the WTO remains hopeful. This outlook is only made possible by the fresh momentum that is building from all stakeholders.
SYNERGIES BETWEEN AFCFTA AND WTO
Notwithstanding the structural and recent challenges facing fragile and conflict affected countries in Africa, a strong commitment is expressed by many African leaders to deliver the timely implementation of the African Continental Free Trade Area (AfCFTA), a process that began in January of this year. The AfCFTA is expected to boost intra-African trade through the elimination of tariffs. This can be a vital contributor to driving the post-pandemic economic recovery as well as longer-term growth and value addition to trade, both within the continent and with the rest of the world. It also has the potential to address the issues of unemployment of youth and women. This is critical to promote peace, stability, and development for the continent.
At the Trade for Peace Week organized by the WTO just over a year ago in Addis Ababa, Ambassador Albert Muchanga, Commissioner for Trade and Industry, African Union, stated, the AfCFTA can assist in “silencing the guns” in Africa. This is also true of the process of domestic reform on the road to acceding to the WTO. More open trade is designed to foster development and make more likely the maintenance of peace. It increases the costs of going to war, because there is far more to lose than to gain. Sustainable development requires durable peace. The benefits of the AfCFTA, include generating opportunities for the self-advancement of all Africans, stimulating investment and allowing African countries to get much greater benefit from the multilateral trading system. Both the multilateral trading system embodied in the WTO and the AfCFTA contribute to economic development and thereby fosters peace.
; Regional and multilateral integration, through AfCFTA and WTO Membership, can help to knit together an African continent that has been forever fragmented. They can help unify and amplify Africa's voice on the global stage in the pursuit of sustainable peace and development. The leaders in the region have embraced the reality that economic integration can bring peace and stability to Africa. This is reflected in their active participation in both, the AfCFTA and WTO accession, which are complementary to their regional integration agendas.
The AfCFTA makes an explicit link between trade and peace, as did the 1948 Havana Charter(4). The first of the general objectives set out in Article 3 of the Agreement of the AfCFTA, points the way:
“(a) create a single market for goods, services, facilitated by movement of persons in order to deepen the economic integration of the African continent and in accordance with the Pan African Vision of “An integrated, prosperous and peaceful Africa” enshrined in Agenda 2063.”(5)
It is clear that the AfCFTA and the WTO share a common goal and a common heritage — the use of trade for peace. To that end, we must work together. The WTO Secretariat is committed to expand and deepen collaboration with our partners in the continent, including the African Union, United Nations Economic Commission for Africa (UNECA) and the AfCFTA Secretariat, to make the most of the synergies and complementarities between the Continental Agreement and the WTO acquis. We also appreciate the work of the Aswan Forum as a high-level platform for sustainable peace and development in Africa. In this respect, we welcome the proposal requesting the WTO to become a knowledge partner of the Aswan Forum. This would greatly enhance the work of the Trade for Peace Program in the continent.
Steps forward for AfCFTA implementation and Trade for Peace
How can the discussion on Trade for Peace for Africa be moved forward?
Through the Trade for Peace Program, we aim to continue addressing the needs of Africa's fragile and conflict-affected countries which are in the process of accession. The problems facing these countries are not static. The trade, peace and humanitarian communities must continually engage and re-engage to ensure that our efforts are context-specific and bear fruit. To that end, the WTO has invested in several activities to bring together experts and practitioners from the trade, peace and humanitarian communities including:
- the organization of an Annual Trade for Peace Week;
- the creation of a platform and a Trade for Peace Network to meet on a regular basis;
- the development of a White Paper on Trade for Peace through WTO accessions;
- the development of training materials and modules on Trade for Peace; and, most recently,
- a Trade for Peace Podcast.(6)
During the recent Trade for Peace Week, there was a session specifically focused on the AfCFTA. This is important for Africa as the majority of acceding fragile and conflict affected countries are located in the continent. In addition, the third Regional Dialogue on WTO Accession for Africa was centered on AfCFTA implementation. In the future, we at the WTO plan to include the AfCFTA in our research and outreach activities, including featuring trade for peace advocates. One early activity will be speaking to the implementation of AfCFTA in an upcoming trade for peace Podcast. Through the Fourth Regional Dialogue on WTO Accessions for Africa, to be hosted by the Government of Sudan later this year, we aim to address the synergies between the AfCFTA, WTO Accession and trade for peace in a post-COVID-19 landscape.
Humanity is experiencing immense challenges as a result of multiple crises on a scale that was rarely experienced. There are the challenges to global health due to the pandemic, to the future well-being of all due to climate change, and the serious impact on the world economy from both.
Fortunately, within these challenges are also great opportunities. This is true especially for the African continent. New and sustained collaborative efforts from all sides, including the AfCFTA, hold the promise of substantial tangible progress in the near future in the pursuit of peace and economic stability for African countries.
As we enter the next phase for both the WTO and the AfCFTA, we can all benefit from conversations such as this one, enabled by the Aswan Forum. We can be thankful for the opportunity to listen and learn. But then we must act. It is our joint task to make a positive difference.
- Algeria, Comoros, Equatorial Guinea, Ethiopia, Libya, Sao Tomé and Principe, Somalia, South Sudan and Sudan. back to text
- See Point II of President Wilson's Fourteen Points. Available at http://www.nationalarchives.gov.uk back to text
- Algeria, Comoros, Equatorial Guinea, Ethiopia, Libya, Sao Tomé and Principe, Somalia, South Sudan and Sudan. back to text
- The Havana Charter for an International Trade Organization. Available at https://www.wto.org/english/docs_e/legal_e/havana_e.pdf back to text
- Agreement Establishing the African Continental Free Trade Area. Available at https://au.int back to text
- The Trade for Peace Programme: Past, Present and Future (podbean.com). back to text