Session of the OAU/AEC Conference of African Ministers of Trade
Honourable Trade Ministers of Africa,
H.E. Amara Essy, Secretary General of the Organization of African Unity,
Two years ago, exactly on 23 September 1999, just three weeks after taking up my new function in Geneva as Director-General of the World Trade Organization, I had the honour to address your gathering in Algiers. My presence today in Abuja serves to illustrate once again my strong commitment towards Africa and for the integration of developing countries into the multilateral trading system.
I am honoured to have this opportunity personally to address the 4th Ordinary Session of the OAU/AEC Conference of African Ministers of Trade, and I thank the Government and the people of the Federal Republic of Nigeria, and the General Secretariat of the Organization of African Unity, for hosting this important meeting and for kindly extending to me an invitation to attend.
Allow me, first of all, to congratulate the new Secretary General of the OAU, H.E. Amara Essy, a knowledgeable diplomat on the multilateral trading system and WTO matters. Mr. Secretary General, I would like to assure you of my availability and commitment to work closely with you and to strengthen the cooperation between our two Secretariats that your predecessor, Dr Salim Ahmed Salim, and myself had already established.
Distinguished Trade Ministers of Africa,
This year is crucial for the multilateral trading system, and it is obvious that the World Trade Organization is entering a critical phase that will determine, in the coming years, the contribution of this organization to global peace, security, and development, and in particular the integration of developing countries and African countries into the multilateral trading system. A decision will be taken in November this year, as to whether a new round of trade negotiations will be launched. Your Conference is timely, taking place just 48 days before the 4th WTO Ministerial Conference is due to be held in Doha, Qatar, from 9 to 13 November 2001.
I would like to offer a few words on the preparatory process for the Doha Ministerial Conference, which appears to be one of the most intensive in the history of the GATT/WTO. The preparations began immediately after the setback at Seattle, and since then, substantive work has been undertaken in Geneva on the full range of issues facing the multilateral trading system. In early 2000, a comprehensive set of confidence-building measures were announced. These measures included: specific initiatives to identify the difficulties facing LDCs in the WTO, a comprehensive reassessment of technical cooperation and capacity-building activities, a separate mechanism to deal with implementation-related issues and concerns, and a dedicated process to seek improvements in the area of internal transparency and effective participation of all Members.
In addition to the confidence-building measures, we were able to launch the mandated negotiations on agriculture and services, which, when combined, account for over two-thirds of the world's economic output. At the end of March 2001, both negotiating processes had reached a stocktaking point at which there was broad agreement among Members that the work done so far had been both very constructive and provided a solid foundation for entering into the more detailed work of phase two.
So far, the preparatory process conducted by the Chairman of the General Council, Ambassador Stuart Harbinson, the Permanent Representative of Hong Kong, China, and my team, has largely been on the basis of informal open-ended General Council meetings, supplemented by other consultations as required. This “bottom-up” approach has been widely welcomed by Members, and the Chairman has urged delegations to show a maximum of flexibility when seeking common ground among their established positions.
In this context, the General Council Informal Meeting of 30 and 31 July 2001 gave the opportunity to delegations to have a “Reality check” before the summer break. At this meeting, the Chairman of the General Council and myself made available to members a joint report dealing with the full range of issues currently on the WTO agenda, stressing that, despite the constructive tone of consultations in Geneva and elsewhere, substantial differences of view remain among Members concerning the scope of the agenda for Doha.
I must report to you that the “tone” of the “Reality check” meeting was like the report, sober but not at all pessimistic, and a large number of delegations agreed that the time had come for each Member to show flexibility. There was also a broad consensus that progress on implementation-related issues remained important to unlocking other issues of a possible Doha agenda.
The preparatory process for the Ministerial Conference in Doha has recently received attention from international gatherings outside Geneva and around the world. However, while the arguments in favour of launching a new round of market-opening negotiations appear to be gaining ground, such political rhetoric has yet to translate into concrete progress. In order to complement the Geneva process, and build momentum for a positive outcome at Doha, I have pursued a large number of contacts with Ministers, both bilaterally and in international meetings like yours today at the continental level.
Our experience in Seattle, two years ago, has shown that Ministers cannot, and should not, be expected to resolve, in a few days, issues of fundamental difference that Members have been unable to resolve in months of intensive work in Geneva. We, therefore, have a crucially important collective responsibility before us, and I know that you are as mindful as I am of the repercussions that a failure to reach agreement at Doha will have for the WTO and the multilateral trading system.
The questions you will be facing at Doha will be the same as at Seattle, although the context is not the same. Are Ministers ready to launch a wider process of negotiations – a new round - and if so, what should its content be? My conviction that a new round is necessary is well known to all of you. There is no better way in which we can effectively address the problems of economic slowdown, or prevent the further marginalization of many developing countries, and particularly of African countries, than by the strengthening of the multilateral trading system. There is no better way in which we can make sure that the legal system embodied in the WTO responds to economic reality.
Let me emphasize the fact that in the multilateral trading system, all of the rules have been negotiated. That is their strength and the source of their legitimacy. But, by the same token, these rules can only be changed by negotiation. It is true to say that some inequities exist in the system. But they can only be removed by negotiation. Therefore, not to negotiate means accepting the status quo, the compromise of yesterday. Before all of you today, I feel I must repeat that opting for the status quo would not stop further trade negotiations taking place next year. They would take place, but outside the WTO, with those not included bearing the costs of exclusion.
In contemplating a new round, we should look at the figures. One study by the Tinbergen Institute estimates that developing countries would gain $155 billion a year from further trade liberalization. That is over three times the $43 billion they get annually in overseas aid. OECD agricultural subsidies in dollar terms are two-thirds of Africa's total GDP. Think of the gains to the global economy and Africa if these subsidies were removed. Mr. Annan wants $10 billion to fight Aids; that is just 12 days of subsidies in dollar terms.
The time before us is short, and the task ahead of us is urgent. It is my hope that the WTO will be able to complete in the next days a draft text of elements for a Ministerial Declaration to be submitted to the Doha Meeting. I need your support now, and in the upcoming weeks, to ensure that the Doha Ministerial Conference is successful and that a new round with “development” at its core, is launched for the benefit of developing countries in general, and African countries in particular. A new round with a balanced agenda, reflecting the interests of all members is obtainable, and Africa has its own responsibility for contributing to that success. It would maintain the momentum for trade liberalization, and hence, growth, development and higher living standards of our people.
Africa is a great Continent with infinite opportunities and boundless potential. However, the latest African Development Report by the African Development Bank shows that its performance in the world economy remains very poor. For year 2000, the share of Africa in the world economy is as follows: 12.2 per cent of the Population, 3.2 per cent of GDP (purchasing power parity), 2.1 per cent of Trade (goods and services) and 0.7 per cent of Foreign Direct Investment (inward flows).
Africa, excluding South Africa, witnessed a decline in its share of world exports from 2 per cent during 1990-95 to 1.7 per cent in 2000. This was the same pattern with respect to their share of imports which decreased from 3 per cent during 1990-95 to 1.8 per cent in 2000. During the last decade, the economic growth rate of the continent was at an average of 2.1 per cent while the population growth was 2.8 per cent. This rate is far less than the 7 per cent of growth required to reduce the poverty by half by 2015. The prospects for sustainable development become more and more uncertain, and the challenge for poverty eradication being faced by African countries, becomes more than urgent. The number of people facing food shortage is estimated to have risen from 19 million in 1999 to 28 million in 2000.
Most African economies are still dominated by agriculture, employing about two-thirds of the region's total labour force, and accounting for about one-third of GDP and one half of exports. African economies are largely dependant on a narrow range of exports crops, since two-thirds of agricultural export earnings are derived from only six commodities, namely, cocoa, coffee, cotton, sugar, tobacco and tea. One of the significant problems facing African economies remains the difficulty of increasing the share of manufacturing output in overall growth. Estimates indicate that growth in manufacturing value-added slowed from 5.7 per cent in 1998 to 2.7 per cent in 2000.
Africa needs higher growth rates in the medium and long term. It will require increased domestic investment, the promotion of broad-based growth through mobilizing domestic and foreign resources for development, and tackling issues related to human development, particularly HIV/AIDS. I am convinced that initiatives such as the post-Lomé Convention Partnership Agreement between the EU and the ACP, as well as improved African Access to the US market through the African Growth and Opportunity Act (AGOA), should boost regional export expansion.
Globalization is a fact, whether we like it or not. We all have the task of controlling it and putting it to the service of people. The pursuit of an equitable, liberal and open rules-based multilateral trading system is the contribution by the WTO in support of African countries in order to achieve sustainable development. Of course, the first responsibility for solving the problems of African countries rests with Africans themselves. In this regard I commend actions such as the New African Initiative in which African leaders have pledged to eradicate poverty and place their countries on a path of sustainable growth and development. But international institutions such as the WTO can also make a significant contribution.
For my part, I would like once again to reiterate my total commitment to your continent. It is painfully obvious that many African countries still have difficulty participating in the WTO, in pursuit of their national interests. Resource constraints and scarcity of human capital are acute problems for all your countries. This was an issue in Seattle; it continues to be an issue today. We simply must do more to enable all WTO Members to share in the benefits and responsibilities of the multilateral trading system. No new round can begin or conclude without the active participation of all Members.
In my two years of tenure in office as Director-General of the WTO, I have been able to visit many African Countries, namely, Algeria, Egypt, Ethiopia, Gabon, Mauritius, Lesotho, South Africa, Togo and, since yesterday, Nigeria. In meeting with your Leaders in their countries, or in the various Summits I have personally participated in, including the OAU Summit of 2000 in Lomé, I have benefitted from their advice and guidance, and I have become more conversant, and more familiar, with your concerns and preoccupations. It is obvious that your countries are struggling to participate effectively in the multilateral trading system because of a lack of capacity in human resources as well as production.
In order to respond to these difficulties, and to contribute to capacity-building, the WTO Secretariat, in addition to the ongoing technical cooperation and training activities, has, over the course of the last two years, also developed new initiatives to increase the capacity of African countries to participate in the work of our Organization. Your historic and successful meeting in Libreville in November 2000, thanks to President Bongo and Minister Mabika, is one of these initiatives.
Please note also, that in the course of the preparations for Doha, I have offered to organize for Africa technical and informative workshops aimed at providing the decisions makers with full detailed reports of the current state of play in the preparatory process. I thought that these technical workshops on WTO matters could be useful for the better understanding and knowledge of all African countries, of which 19 are still without resident missions in Geneva.
Despite the scarcity of financial resources to satisfy the numerous requests for technical assistance expressed by the various members, my commitment for the integration of developing countries, starting with African countries, remains. I am committed to providing further technical assistance and workshops in the period ahead and I have moved already to lock in these commitments in 2002. With the vision and efficient support I have been receiving from my Deputy and friend, Ablassé Ouedraogo, and other colleagues in the Secretariat, I shall fulfill my commitment. We, in the Secretariat, stand in the hands of our owners, the Members. More leadership, more flexibility and generosity must be shown, so that all can be accommodated.
My concluding comment is simple and often repeated. If we are happy with the status quo, which is just yesterday's compromise, and comfortable with the injustices brought by these compromises, then let us continue to nibble at the edges of change. But if we want real change, then let us start a balanced, wider set of negotiations. Ministers must ask just one simple question: in your heart, do you think you can get more out of the present system, bit by bit, or, more from a wider negotiation with a balanced agenda, with proper capacity-building and technical assistance? There is only one answer.
I thank you.