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Director-General Roberto Azevêdo delivered the keynote address on Day 2 of the Public Forum on “why trade matters to Africa”. Reiterating the key messages from UN Secretary-General Ban Ki-moon and Deputy President of Kenya, William Ruto, on Day 1 of the Forum, DG Azevêdo highlighted Africa’s potential for growth and the role that trade can play in realizing this.
Mr Azevêdo emphasized that the very existence of an international trading system creates a stable, predictable and transparent business environment which supports growth and development in Africa. The WTO’s Aid for Trade initiative can play an important role, given that Africa is its largest beneficiary, and the full implementation of the Trade Facilitation Agreement can help to integrate Africa and cut the costs of trading significantly. His full speech is available here.
Plenary debate: What trade means for Africa
The moderator, Julie Gichuru, opened the debate with a short account of African history. She pointed out that a newly independent continent had started out rather optimistically on the basis of a regional integration and trade agenda in the 1950s but somewhere down the line countries had faltered and lost their way. She encouraged the panel to analyse what had gone wrong and what needed to be done to bring Africa back to a new growth trajectory.
Axel Addy, Liberia’s Minister of Commerce and Industry, said that economic transformation in Africa was inevitable but would take time. He insisted that there is a misplaced pessimism with respect to the continent’s speed of development and compared it to the growth witnessed in western countries, where it took centuries for people to build the nations they currently inhabit. He highlighted the new respect for the culture of governance that the continent has acquired, and stated that peace and development would not be reversed in Africa, and that economic development was only a matter of time.
Paul Brenton, Lead Economist at the World Bank, said he saw enormous potential for trade and integration in the region and that its realization was the Bank’s priority. While there was particular potential for trade in agriculture, an emerging trade in the manufacturing sector was generating a lot of jobs. In terms of trade-related infrastructure, he said that more liberalization and predictability were required. Building capacity for trade is important, as is the implementation of trade facilitating measures. He observed that the main beneficiaries would be small and medium-sized enterprises (SMEs) and the poorest people in the region.
Frank Matsaert, CEO of Trademark East Africa, said that farmers were producing sufficient quantities but were not aware of how or where to sell their produce. To this end, technological innovation is of immense importance to the poorest and most marginalized of producers. He observed that the reality on the ground is quite different to what is portrayed in the media. While people speak of Africa as a market for extractives, the continent has been riding on the wave of a services and construction boom.
Issam Chleuh, Founder and CEO of Africa Impact Group, said that investment was of particular importance to Africa. Investment in businesses could also have social benefits. He added that there was a need to further integrate the continent, to form regional partnerships and to create value chains to realize maximum economic gains.
Razia Khan, Managing Director of Africa Macro Global Research at Standard Chartered, said that African economies had grown considerably. She praised the above-average economic performance of the region compared with global growth. However, she recognized that while trade had been successful in addressing poverty in Asia, African countries had not benefited from inclusive growth. She said that a focus on SMEs must be renewed so that high economic growth is translated into better outcomes for society.
Closing the discussion, DG Azevêdo said that stability is extremely important for Africa as it would help to attract investment and lead to greater economic growth. Infrastructure, both physical and institutional, needs to be strengthened. He said that Africa has an important voice in global issues and that it is sure to achieve growth and become more competitive.
Summaries of other sessions on Day 2 coming soon
Séance de travail No. 13: Quand tout le monde peut faire du commerce avec tout le monde
The session focused on new trends in the global market in labour skills, trade in value-added terms, the way we trade, the products we trade, the new platforms that are emerging and the implications for the various stakeholders involved.
Sherry M. Stephenson from the International Centre for Trade and Sustainable Development (ICTSD) focused on the new challenges that global actors face in global markets. She said that when considering change, commercial services are the most dynamic and the area that grows the fastest. She asked what factors make this possible and what implications result from these changes to trade.
Ms Stephenson gave examples of countries that have succeeded in adjusting to global trade trends in the services area. These include Senegal, which has moved from being an agricultural exporter to a services exporter. Costa Rica has transformed its economy through participation in higher-value exports in global value chains (GVCs). The Philippines has become the largest exporter of business process outsourcing (BPO) services in the world, achieved by entering into GVCs. Service exports from Bangladesh, led by the information and communications technology sector, account for 45 per cent of its GDP. Finally, she pointed out that developing countries participating in GVCs grow faster.
Marcelo Olarreaga from the University of Geneva opened the debate about income inequality. He compared the evolution of income inequality with the evolution of globalization. He explained that although both follow the same pattern, there is no theory that could explain this evolution. His conclusions were that as online trade grows, it leads to democratization of trade and the reduction of inequality within countries because more firms would benefit from global markets.
Agustin Manirakiza from InterCafé, Burundi, talked about the coffee sector in Burundi and how InterCafé has helped in its growth. He explained that the coffee sector emerged after the liberalization and privatization of the institutions concerned. New emerging, smaller players arose in the sector and needed to face the challenges of entering into very competitive markets.
Kjetil Olson from International Elance talked about the reinvention of work within a global, online labour market. He posed questions about how work has become more global and said that the labour market is evolving constantly through telecommuting, outsourcing and online working.
José Manuel Salazar-Xirinachs from the International Labour Organization focused on the implications of online work. He noted that it has changed the way we trade. However, along with the new opportunities, we must also face risks such as the future of the workforce, changes in wages, the distribution effect and the quality of jobs. In addition, he asked if this is a network creator or disruptor. He referred to the critical importance of filling the education gap and monitoring the distribution of opportunities.
Harsha V. Singh, former Deputy Director-General of the WTO, focused on today's global trade reality, the challenges and the future of international trade. He talked about the challenges that policy makers and society must face when dealing with shifting patterns and competitiveness. He also considered the fact that there is a difference between what governments do domestically and what they agree to do at a multilateral level. He concluded that policy makers face a new paradigm of intervention, consisting of smart and inclusive interventions that should take into account not only the manufacturing sector but also services and investment areas.
The panel said that the collapse of a garment factory in Bangladesh in April 2013, resulting in the death of 1,129 people, focused attention on the sometimes sub-standard, unsafe and dangerous working conditions in the country's factories. Inadequate inspection capabilities and the pressures on a sector that provides 80 per cent of exports and 12 per cent of the country's GDP make it difficult to enforce improvements if they mean higher costs of production.
The Institute of Developing Economies – Japan External Trade Organization (IDE-JETRO) is launching a "happy workers initiative" based on a certification programme that would value safety and inform consumers through a sticker on the product. The panel said that fair trade and ethical trade are concepts that are attracting growing awareness among consumers. The scheme would try to increase the "social education" of consumers and popularize the idea of "labour-friendly" labelling in the same way that "eco" and "organic" labelling have seen growing acceptance.
Questions from the audience focused on the practical difficulties of achieving results and the probability that it would be a slow process. The root of the problem, according to an intervention by a Bangladesh labour non-governmental organization (NGO), is that factories have moved to countries such as Bangladesh to minimize costs and maximize profits. Small and medium-sized enterprises would perhaps find it easier than large brands to abide by the scheme.
The panel said that China’s accession to the WTO has brought great prosperity to the Chinese economy. The proliferating mega-regional trade agreements pose uncertainties in China’s trade and investment climate. China set up the Shanghai Free Trade Zone (FTZ) in 2013 as a testing ground for reform measures contained in many regional trade or investment agreements.
Investment liberalization in the Shanghai FTZ uses a “pre-establishment” and “negative list” approach. Under this approach, if an industry or activity is not explicitly restricted or prohibited by its inclusion in the negative list, foreign investors will enjoy national treatment in the same way as Chinese investors. The registration procedure for foreign investment is made simpler and more efficient. The negative list sets higher standards for government practices and requires higher transparency. The negative list approach is widely used in US-led free trade agreements. Testing the negative list model in the Shanghai FTZ signals China’s political wish to conclude the China-US and EU-China bilateral agreements.
Via the Shanghai FTZ, China intends to adopt large-scale domestic reforms in areas such as competition, state-owned enterprises, expedited customs clearance, government procurement, social and environmental standards, etc. China has also reformed approval procedures for overseas investment to encourage Chinese investment abroad.
The new round of reforms put emphasis on the financial sector. A single, unified financial regulator would help serve the real economy and promote the internationalization of the renminbi while keeping risks under control.
Séance de travail No. 16: Le commerce des ressources naturelles – Comprendre la dynamique, libérer le potentiel
The session explored the underpinnings of trade in natural resources, recent trends and policy challenges. It also looked at the role of international trading companies.
Alexander Keck from the WTO Secretariat described the major changes that have taken place over the past 20 years: a doubling of commodity prices since 2000, high price volatility, and a correlated upward trend of prices across all commodities. These changes have been driven by a strong and rising demand for commodities from emerging markets, increased systemic linkages between the various commodity markets (one-third of the cost of an agricultural product is linked to energy), an increasingly inelastic supply of commodities, and the "financialization" of commodities. Greater international coordination and public-private dialogue would be desirable to facilitate supply, remove obstacles to investment, and better understand the role of speculators.
Craig Pirrong from the University of Houston spoke about commodity trading firms, their role, and functions. Andrew Gowers from Trafigura presented his company, which is the third-largest in oil trading and the second-largest in metal trading. He described the company's efforts to increase transparency and sustainability, and the role that Trafigura plays in improving infrastructure in developing countries.
Edward Harris from the Africa Progress Panel stressed the need to tackle tax evasion more effectively and to improve transparency in commodity trading and company ownership in order to ensure that natural resources benefit Africa's citizens. Several panellists noted the importance of implementing the Trade Facilitation Agreement to help improve transparency in this field. They highlighted the importance of fighting corruption, improving transparency and infrastructure, and ensuring that natural resources benefit the population.
Séance de travail No. 17: Perspectives pour le commerce, le développement et la réduction des inégalités: le Programme de Doha, l’après-Bali et les objectifs de développement durable pour l’après-2015
Sylvester Bagooro from Africa Trade Network focused on the lack of investment capital in Africa. In his view, Africa is in a stage of transformation, facing major issues regarding inequality and poverty while being ruled by a few big corporations and the elite. He said that the existing economic growth in Africa is not the kind of growth that Africa wants and needs since it does not create sufficient jobs. Unemployment is still the main problem. The link between trade and investment is where trade policies should start to develop a new approach. In Africa, there is the need for the WTO to develop more coherence in giving more national policy space to direct investment to where it is required.
Gopa Kumar from Third World Network stressed the role of technology for development and the role of international intellectual property rights regimes in preventing development. There are certain goals to be achieved through technology: availability and accessibility. Also, even if the technology is available and accessible, the main issue is that it is not accessible in terms of developing countries. This is due to intellectual property rights and the Trade-related Aspects of Intellectual Property Rights (TRIPS) Agreement. If developing countries try to circumvent restrictions on technological products resulting from IP rights, they face massive international political pressure.
Deborah James from the Center for Economic and Policy Research discussed agricultural subsidies, focusing on export subsidies. She said that the WTO allows developed countries to benefit from subsidies in agriculture but does not do the same for developing countries. Reducing developed country agricultural subsidies while allowing developing countries more investment into agriculture could be the core solution for the current shortcomings of the system, she said. This could be done by a change of index for subsidies, which must be based on current market prices.
Georgios Altintzis from the International Trade Union Confederation identified development-oriented policies for job creation, full employment and the protection of labour rights. Stressing that trade and employment are clearly linked, he said that fair labour standards are necessary for productive trade. Unions, fair wages, social protection and vacation time are important aspects in strengthening economies as unions decrease income inequality.
Sanya Reid Smith from Third World Network focused on sustainable development goals in relation to existing disciplines of the multilateral trading system. She said that while the main problem is a lack of coherence, the existing trade rules in the multilateral trading system substantially restrict developing countries.
Brendan McGivern from White & Case LLP introduced the session and focused on Article XIV ("General Exceptions") of the General Agreement on Trade in Services (GATS) as the relevant provision in the WTO agreements for this discussion.
Ashley Winton from White & Case LLP said that the economic value of data, including personal data, has undergone a vast change in the past two decades. There are various ways to calculate the value, to assess the systems that protect it and to prevent its loss.
Nicholas Hodac from IBM Governmental Programs Europe said there cannot be a "one size fits all" solution or regulation for dealing with the issue of data privacy. It is important to balance the interests of different constituents: those in favour of the free flow of information and those highlighting privacy concerns. The free flow of data is particularly important for small and medium-sized enterprises (SMEs). The WTO can play a crucial role as trade agreements can serve as a means of establishing rules for the free flow of data.
Professor Weber from the University of Zurich explored the link between data management and the relevant GATS provision. He raised concerns about data protection regulations being viewed as trade restrictions. Under GATS Article VI ("Domestic Regulation"), autonomous domestic regulations on data protection might not meet the proportionality or necessity test. He suggested that for standards in this area, inspiration could be drawn from the Sanitary and Phytosanitary Measures Agreement and the Technical Barriers to Trade Agreement and if found to be in contradiction, a justification could be made under GATS Article XIV(b) ("Secuirty Exceptions").
Duane Layton from Mayer Brown asked if cyber attacks and the threat they pose to government and businesses could be raised at the WTO's Dispute Settlement Body as a violation of Article 3.10 of the Dispute Settlement Understanding - i.e. "good faith". The WTO is a rules-based trading system and the players must play by the rules. Still, under these rules, cyber attacks remain a threat.
Jerome Bunyi from the Permanent Mission of the Philippines to the WTO highlighted that the example of the Philippines shows that further liberalization of an already liberalized agricultural sector could create job dislocations and food insecurity. He said that there is a need to focus on labour-intensive manufacturing in agriculture to employ farmers who cannot go to other high-skilled labour sectors.
Jennifer Clapp from the University of Waterloo stressed the importance of running a "reality check" on the theory of comparative advantage as assumptions do not hold for agriculture nowadays. Thus, the notion that liberalization of trade supports food security is rather weak; food security is not about supplies but about availability, access, stability and utilization. The very important factors in ensuring food security in the context of policy making include hunger and access to food, ecological conditions and extraterritorial impact.
Morrison Rwakakamba Twesigye from Agency for Transformation underlined that food is not a commodity but a livelihood. He disagreed with the necessity of having WTO rules and restrictions, and pointed to the fact that many local farmers in Uganda have over time been transformed into monocrop farmers due to the promotion of cash crops. Due to monocultivation for exports, families now have to rely on supermarkets as a source of food security. Families are using their own land to feed into global value chains. The future of Africa is dependent on investment.
This session looked at why trade matters to everyone: both consumers and producers. It looked at consumer welfare gains from trade liberalization and how consumer interests can be better represented in trade policy matters in order to realize such gains. It identified the larger political benefits associated with economic cooperation, good governance and their impact on consumer welfare.Speakers emphasized that consumers are generally interested in high-quality products which can be obtained quickly, and that this is best achieved by dropping trade barriers through trade agreements. However, the problem with trade agreements is that producer interests tend to dominate, and thus, consumers are not represented in trade. In Africa, the representation of consumer interests is very weak, due to lack of capacity. Consumer welfare can be enhanced through trade negotiations.
Séance de travail No. 19: Commerce et emplois dans une économie verte
The panel said that since the Rio+20 climate change summit, consensus has emerged on the importance of trade in the green economy for achieving sustainable development. Trade can bring positive opportunities to the environment and to job creation, particularly trade in renewable energy products. This is particularly important in a gloomy worldwide employment scenario. According to the International Labour Organization (ILO), almost 202 million people are unemployed worldwide, a number expected to increase by 2015.
From 2004 to 2011, trade in renewable energy has grown by 25 per cent while trade in manufactured goods has increased by 10 per cent, according to the United Nations Environment Programme (UNEP). The participation of developing countries is growing: since 2007, they have become net exporters of renewable energy products. South-South trade in bio-based and hydro power-based production accounts for 45 per cent of the total growth of these products.
In India, about 3 million jobs were created for organic cotton, according to ILO figures. A transition to a green economy needs to be accompanied by adequate and proactive green economy policies that ensure job creation based on decent work criteria and that advance social inclusion – for example, by reducing subsidies for fossil-based activities. The public sector needs to take the lead. Globally, the national skills structure needs to be adapted to meet the skills demand.
In Peru, the International Trade Centre (ITC) is helping small and medium-sized enterprises to export “sacha inchi”, a plant used to make oil and for which the global demand is rising. Some 95 per cent of its production is intended to be exported and it is facing many trade barriers. The opportunity for job creation and income distribution in this sector is huge.
The panel said that many African countries are facing a proliferation of private standards in OECD countries, on organic farming for example. This is the so-called “green protectionism”. Companies are finding it technically difficult and costly to comply with standards which are not always based on international agreed science or technology. Investment in capacity building in this area is needed.
Séance de travail No. 20: Commerce et emploi – Le processus de développement de la Chine
The panel said that China’s economic growth has been a great success and the labour market structure has evolved, responding to a shrinking agriculture sector and a growing services sector. The labour market also features vast migration from rural to urban areas. Rising wages and matching skills to industrial needs are new challenges for the Chinese economy.
Labour market adjustments are not unique to China, said the panellists. In the European Union, integration has created more jobs but many jobs have been lost due to offshoring and the financial crisis. The quality of jobs has also been affected.
Researchers have found that China’s openness to foreign trade has created more jobs for women than for men. The industrial upgrading in China could cause more gender discrimination, requiring more social security and employment services by the government. The effect of foreign trade on employment varies greatly across China. The employment benefits of foreign trade are mostly concentrated in eastern regions.
Séance de travail No. 21: Commerce et agriculture familiale: possibilités et défis
Dino Sozzi from Syngenta said that the key for small farms aiming to be more competitive is sustainability. Mr Sozzi gave some specific examples of projects that Syngenta has carried out in Africa to support small farms in this regard. These include teaching farmers new technology directly or indirectly through non-governmental organizations (NGOs), and cooperating with global commodity distributors such as Cargill to make sure farmers have access to markets. Considering one-third of global food supply is produced by small farms, Mr Sozzi said that support is crucial.
Luis Miguel Etchevehere from the World Farmers’ Organization cited Argentina’s experience in supporting family farming. In his view, integrating into value chains is a significant precondition to having access to markets and thus farmers should be provided with more capacity and technology to achieve this objective. He also highlighted other means to promote family farming, such as reducing barriers to trade and streamlining bureaucratic procedures. He emphasized the role of government in this regard.
Isolda Agazzi from Alliance Sud said that for small farms, priority should be given to local production rather than international trade because if food sovereignty were achieved, international trade would seem less important. She criticized the heavy distorting subsidies imposed by developed countries which subsequently allow them to dump food in developing countries and jeopardize the agricultural sector, especially family farming. She called for the Doha Round to be completed, particularly the elimination of export subsidies, the reduction of domestic support, and a permanent solution to public food stockholding for food security purposes.
Ron Bonnett, a board member of the World Farmers’ Organization, said that when examining the influence of trade on family farming, no definition of family farming should be sought as it depends on various factors and the definition differs among countries. Trade comprises an important component in the income of family farms but other factors also matter such as commodity trading, political issues and weather conditions. Mr Bonnet said that family farms are vulnerable compared with commercial farms as they are small players in trade. He pointed out three ways of increase competitiveness: more training to improve productivity and management techniques; an organizational role for farmers; and a regulatory framework for family farming.
The panel discussed the impact on developing countries and family farming of bilateral trade agreements between large economies, such as the recently negotiated EU-Canada Comprehensive Trade and Economic Agreement. Mr Bonnett said there are valid concerns and underlined the importance of achieving trade agreements at the multilateral level. He pointed out, however, that certain products produced in developing countries, such as tropical products, are not affected by these bilateral agreements. Mr Sozzi underscored the benefits of developing a processing industry in developing countries. Mr Bonnett said that examining the supply and management chain to ensure domestic production meets local demands could alleviate the negative impacts.Following conflicting views expressed by a farmer from New Zealand, who claimed she was fully dependent on trade, and a Swiss farmer, who called for more protectionism, the panellists were asked how this dilemma could be resolved. In the panellists’ view, this issue should be resolved at a multilateral level by involving every country but allowing each country enough policy space to make its own decision on food security and sovereignty.
Séance de travail No. 22: Le rôle du commerce dans le programme de développement pour l’après-2015: diffuser les solutions pour une croissance plus écologique – Une initiative de Green Economies Dialogue
The panel discussed how international trade can contribute to achieving the balance between economic growth and environmental conservation. The discussions covered various international and regional platforms, with an emphasis on the Post-2015 Development Agenda currently under construction. The role of the WTO was recognized as a forum for dialogue. However, because of the failure of the WTO membership to sustain the momentum achieved at the Bali Ministerial Conference in December 2013, an impasse has been created in the negotiating wing of the WTO.
The panel said that the negotiating process on the Environmental Goods Agreement (EGA) is the only area of discussion that is currently pushing the trade liberalization agenda. Should the agreement be finalized, it would count as a triple win: first, it would revive the WTO’s mission of trade liberalization by effective negotiation; secondly, it would address the issue of climate change and environmental degradation; and thirdly, it would establish common ground between trade and sustainable development objectives.
The panellists said that while pursuing trade liberalization through comparative advantage is an effective tool for growth, the benefits are not evenly distributed. They stressed the need for effective domestic policies for redistribution of gains. By putting forward their positions on energy security, food security and industrial development, governments were essentially instigating protectionist measures, said the panel.
To illustrate the futility of such protectionist measures, the panellists cited the example of heavy industry, an area where it said virtually all governments were instituting protectionist policies, resulting in artificial comparative advantages, over-supply and therefore lower prices. This outcome was neither beneficial for the global markets nor for the employees engaged in these industries.
The panel emphasized that business groups greatly valued the multilateral trading system and its mandate of sustainable development. They highlighted, however, that many separate discussions were taking place across different agencies. They said that business groups did not see the institutional boundaries between trade, environment and sustainable development and urged these organizations to deliver coherent outcomes on these issues.
The speakers debated whether the WTO can remain an effective forum for trade negotiations, given the current impasse on trade facilitation, and whether plurilateral agreements concluded among a smaller group of countries are the answer to the deadlock. Several participants commented that the WTO is still doing important work despite the lack of results from the negotiating arm of the organization, citing the success of its technical committees in resolving some potential disputes.
There was general support among the speakers – but some resistance from members of the audience – to the idea of bringing negotiations on investment into the WTO. Predictability was cited as a key concern among business representatives. An example was the need to establish harmonized rules of origin in the “mega-regionals”, or large regional trade agreements, currently under negotiation.
The session focused on the role of digital economies in creating jobs and how the WTO could further support this segment.
Representing major players and associations, the panellists stated that a significant part of the global economy will soon be digital. Digital ventures have changed the way global value chains are built. The digital revolution has democratized access to innovation, provided people with the tools to innovate, encouraged research and development and enabled the creation of a wide network of service providers.
The panel highlighted that through this interconnectedness many jobs have been created. As big companies and small and medium-sized enterprises (SMEs) are created and as they expand into new markets, they demand a greater labour force both for technological development and production. However, special attention needs to be paid to the education of these workers.
The session also looked into the role of the internet. The panel said that the internet has transformed the world. As far as trade is concerned, it has reduced the significance of distance and allowed for the accumulation of value though data, offering benefits for both small and big businesses. However, the panel asked to what extent data privacy should be respected or limited.
The panel asked how the WTO could assist the development of the digital sector. The existence of the Information Technology Agreement and the proposed expansion of the products covered by it were praised but the panel said that this is not enough to curb protectionism in data flows. The panel noted that the framework of the WTO was established some time ago and that it does not encompass digital matters properly. It welcomed the negotiations in the Doha Round but criticized the slow progress. The panel noted that countries could look for other bilateral and plurilateral means of addressing digital and data matters. The panellists called for a more robust approach to digital issues within trade negotiations.
Atelier No. 12: Le dialogue multipartite sur le commerce et les obstacles non tarifaires pour mieux comprendre les différents points de vue sur les moyens d’offrir aux consommateurs un plus large choix de produits de meilleure qualité à un prix plus bas et de promouvoir des modes de consommation durables
The workshop highlighted that social, economic and environmental issues are best dealt with in a multi-stakeholder and multi-sectoral dialogue involving governments, civil society and the private sector. Regarding sustainable consumption as part of the post-2015 development agenda, the workshop looked at how trades operate in this context (i.e. the regulation of sustainable consumption).
The panellists said that the rules of the WTO offer policy space for domestic regulation (e.g. Article XX of the General Agreement on Tariffs and Trade) but protect against veiled protectionism and arbitrary or unjustifiable discrimination. The relationship between development and sustainable consumption is a positive nexus.
The panel said that exporters from developing countries are faced with a growing number of differing and complex sustainable consumption standards. Difficulties arise regarding expensive conformity assessment procedures and multiple private and public standards. Some private standards promote good performance for developing country producers but others may raise costs and exclude exporters. Regarding standards in services, there is less available information but potentially they can have more impact (e.g. for professional qualifications).
There is a need for standards to be harmonized, said the panel. They need to be better elaborated in order to efficiently achieve their stated objectives and they need to be more science-based. There is a need for capacity building in developing countries so as to enable production processes to adapt.
The panel said that there needs to be a new way of looking at society – maybe bigger is not better and present consumption patterns may not be sustainable. It said that malnutrition is a market failure and that there are difficulties in trading fortified food due to differing national standards. Trade needs to address market failures, especially the effect on smallholder farms.
The panel provided many examples. These included Gambian ground nut producers who are not able to meet conformity assessment procedures due to lack of appropriate test labs, leather hide traceability requirements which exclude in practice most producers in Africa, and difficulties in trading fortified wheat between Switzerland and France due to different regulatory regimes. They also cited fruit producers who might improve their production by better "patching" techniques (a third of fruit can be lost due to improper transportation or storage) and quoted the example of non-governmental organizations working with the private sector to ensure that production is primarily bought from small producers in Africa rather than big plantations.
Mahesh Sugathan from the International Centre for Trade and Sustainable Development opened the discussion by highlighting the challenges and opportunities for sustainable energy access in Africa. While there are technologies that give easy access to sustainable energy, such as solar panels, such technologies suffer from high tariffs. By looking at exports of solar panels and solar lanterns, a steady growth of South-South trade can be observed. Yet, a number of non-tariff measures, such as taxes and subsidies, create barriers to trade in environmental energy goods.
Mr Sugathan said that taxes on components prevalent in many countries increase the final product price. Therefore, a focus on supply chain management is important to increase the availability of environmental energy goods. Other issues in developing countries that need to be resolved include updating customs officials on new tariff schemes. In many African countries, imports of pre-assembled lanterns are subject to high VAT. Even if taxes are removed, many non-tariff barriers are still in place. Looking ahead to what can be improved, he said that all trade policies must encompass access to energy. South-South trade dynamics must be taken into account when expanding access to energy. By focusing on manufacturing and servicing of environmental energy products, such development can lead to domestic job creation.
Steivan Defilla introduced the contribution of the Energy Charter Secretariat (ECT) to the Sustainable Energy for All (SE4All) initiative. He said that the challenges mainly involve global carbon decoupling. The Davos Statement, adopted in 2014 by 14 signatory states, has the goal of raising awareness of upcoming negotiations in the renewable energy sector. The ECT also appreciates applications of non-WTO members under the Environmental Goods Agreement (EGA). The World Energy Council has proposed a list of goods for inclusion under the EGA.
Mr Defilla said that the controversial investment protection provisions of the ECT are very important as a good faith clause for the huge investments necessary in the energy sector. As the public sector can often not provide the investment to make new energy technology possible, private sector investments need enabling conditions, such as predictability through investment protection clauses. There is also a need for greater transparency and clear conditions are needed to protect the public and the private sector from abuses. Thus, the ECT looks forward to the transparency rules of the United Nations Commission on International Trade Law (UNCITRAL) for investment protection to hopefully be applied to the ECT. Multilateral jurisprudence needs to be improved overall.
Issa Abdullahi from Swiss African Forum focused on “the diaspora in Africa”, which is a consequence of the energy problems in Africa. As energy is central to sustainable development and poverty reduction, it affects all aspects of development. As well as having access to safe drinking water and health care, the population is dependent on sufficient energy supply. She asked what should therefore be done to achieve sustainable energy development in Africa. The answers include involving international organizations, providing more opportunities for foreign direct investment and the higher taxation of businesses while allowing the private sector more participation.
Mr Issa Abdullahi said that Africa should make better use of its domestic energy sources as it could be the world’s leading energy continent. In order to catch up, Africa must collaborate with regional organizations. It also needs more financing and experts in the field of energy cooperation, and sustainability must be on every governmental policy agenda.
Pradeep Monga of the United Nations Industrial Development Organization (UNIDO) mainly talked about energy systems and climate change, including sufficient food and water supply. He introduced UNIDO’s core agenda in regards to energy security. He said that energy poverty/security addresses the need for energy security through reliable and affordable as well as sustainable forms of energy. Climate security addresses the shift to the need for cleaner, greener and more efficient energy production and consumption. As one in five people lacks access to electricity, SE4ALL needs to be taken as a chance for change.
Mr Monga said that UNIDO supports SE4ALL and welcomes strategic approaches that include industrial energy efficiency while focusing on the country and regional level. As the energy-water-food-health nexus is central, regional centres focusing on capacity building are needed. As a way forward, partnerships have to be created to create a more inclusive trade environment by supporting clean energy technologies, regional policies and standards in Africa.
Ludivine Tamiotti from the WTO’s Trade and Environment Division highlighted the WTO framework for advancing sustainable development in environmental goods. The system of rules in place, both in terms of the key provisions in the agreements and exceptions for the environment, provides a broad policy space for WTO members, such as in protection of the environment. In terms of institutions and mechanisms, WTO rules ensure predictability and enable action to be taken if measures have an impact on trade. The WTO’s dispute settlement system confirms the balance between members’ rights to take trade-related environmental measures and the rights of other members to be protected.
Ms Tamiotti said that when we speak about any kind of environmental measure, it is important to put possible measures within the right framework within the WTO. These include the Technical Barriers to Trade (TBT) Agreement, the General Agreement on Tariffs and Trade (GATT) and the Subsidies and Countervailing Measures (SCM) Agreement, which provide rules on technical requirements, price and market mechanisms and support programmes respectively. The harmonization requirement of the TBT Agreement is most important for creating better environmental trade. WTO case law confirms that WTO rules do not trump environmental rules as long as several carefully created conditions are respected. These seek to ensure that green measures are not applied arbitrarily and not used as protectionism.
Monika Hencsey from the European Commission discussed available technologies for clean and renewable energy and her direct involvement in the negotiations on the EGA. As energy technologies still face considerable tariffs, green goods and services are expensive to trade. While the EGA needs to be completed fast, it is surprising that it has no members from Africa yet. The EGA will increase investment into Africa, and this trend is already happening. More and more projects are available for solar and hydropower in countries such as Ethiopia, Kenya and South Africa.
Orit Frenkel from General Electric Company described the efforts of General Electric in reducing greenhouse gas emissions. He said that many WTO members currently apply an inefficient mix of tariffs and non-tariff barriers on renewable technologies. While there are many hurdles to overcome on tariffs on energy products in certain countries, such as on solar panels and wind turbines, the EGA can be a solution. As the EGA can stimulate the world economy, it will help nations to achieve their carbon reduction goals. The EGA will help reduce the difference in cost between fossil fuel energy and renewable technologies by eliminating tariffs and non-tariff barriers on environmental goods. Reaching a broad agreement that includes a diverse range of green technologies is critical to create a level playing field for global energy markets.
Séance de travail No. 24: Cohérence dans le cadre d’un programme de développement pour l’après-2015
Friedrich Soltau from the United Nations Department of Economic and Social Affairs (UNDESA) highlighted that the stakeholders approach - involving civil society and the business sector in creating the post-2015 agenda – and universality (involving all countries, thus treating the developing world as an equal player) are the two key differences in formulating Sustainable Development Goals (SDGs) as opposed to Millennium Development Goals (MDGs). The main challenge in implementing the SDGs lies in bringing the capacity of the private sector into this process.
Ricardo Melendez-Ortiz from the International Centre for Trade and Sustainable Development (ICTSD) highlighted the capacity of different countries in terms of reaching global markets as a major challenge in taking full advantage of the multilateral trading system. He stressed the difficulty in creating a system where non-discrimination can be preserved and the need to assist countries with lower capacity in their integration into the global trading system, through Aid for Trade for example.
Lara Birkes from the World Business Council for Sustainable Development focused on the means needed to implement SDGs, such as finance and technology, which require cross-sector collaboration. She said: “Neither public nor private sectors alone can fully realize the implementation of SDGs”.
Guillermo Valles Galmés from the United Nations Conference on Trade and Development (UNCTAD) spoke about the trade policy review mechanisms needed to see where the objectives are reached and where they are not. He stressed the importance of understanding what partnership really means, going beyond the partnerships established under the MDGs.
Séance de travail No. 25: Pourquoi l’OMC est importante pour les pays émergents
The session sought to outline the characteristics of emerging countries, with a focus on the BRICS (Brazil, Russia, India, China and South Africa) and the importance of the WTO to these countries.
Vera Thorstensen from Fundaçâo Getulio Vargas discussed the proliferation of preferential trade arrangements and mega-regional free trade agreements (FTAs), such as the Transatlantic Trade and Investment Partnership (TTIP) and the Trans-Pacific Partnership (TPP). She highlighted that the BRICS are not included in many of these arrangements, which are moving from traditional discussions on tariffs towards other regulatory issues, such as sanitary and phytosanitary standards (SPS), technical barriers to trade (TBTs) and private standards. She emphasized the importance of bringing these discussions back to the WTO as the only venue in which the vast majority of countries are given a voice as opposed to mega-regional trade agreements, which exclude about 160 countries from the negotiating table.
Baihua Gong from the Shanghai WTO Affairs Consultation Centre gave an overview of different opinions regarding the impact on China of mega-regional trade agreements. On the one hand, US support for initiatives such as the TPP could be seen as the biggest threat to the multilateral trading system. Another approach would be to consider the TPP as an opportunity for China, especially if it is made more inclusive and transparent. Mr Gong conceded, however, that there is much more of a consensus regarding the TTIP, which is expected to produce a negative impact overall on the domestic economy by diverting trade away from China. He ended his contribution with an open question, asking what the BRICS can do to address the issues arising from mega-regional FTAs.
Memory Dube from the South African Institute for International Affairs broached the topic of African responses to mega-regional FTAs. She stressed that South African officials have largely been dismissive of mega-regional FTAs, portraying them as attempts to circumvent the WTO or as a means to create rules between like-minded countries that could then be “brought back” to the WTO. She advised against the African tendency of treating trade as secondary to industrialization and called for leaders’ full engagement in the topic of the multilateral trading system. She also focused on China, which she claimed is preparing itself for a “post-TPP” world, and warned that if China and the Association of Southeast Asian Nations (ASEAN) join the TPP and TTIP initiatives, these groups would be responsible for more than 70 per cent of world trade and would therefore wield extraordinary influence on the world scene. She concluded by recommending that the WTO continue to play a central role in the multilateral trading system.
Sandra Rios from the Centro de Estudos de Integração e Desenvolvimento (CINDES) honed in on the Brazilian economy and patterns of trade, singling out the importance of agriculture for Brazilian exports. She drew attention to Brazil’s vertically integrated industrial base and a recent pattern of spiralling costs and de-industrialization. She acknowledged the country’s non-participation in mega-regional FTAs but stressed the Brazilian regard for the multilateral trading system and the fact that its leaders are expected to engage with the WTO. In addition, she described changing patterns of world trade, pointing out two driving factors: the fragmentation of the production process, and consumer empowerment. The latter, in her view, was responsible for the increased importance of regulatory issues such as private standards, transparency, food safety, and labour and social regulations. The fragmentation of the production process, on the other hand, explains the fear of some emerging economies about “missing out” on global supply chains. She concluded that the WTO should consolidate and improve existing rules and incorporate new issues into the agenda.
Bipul Chatterjee from CUTS International pointed out a number of divergences in the responses of the panellists and attempted to identify the common characteristics of emerging economies. His suggestions included relatively high growth rates, reduced poverty rates and the diminishing contribution of agriculture to national incomes but he also highlighted the problem of unemployment, under-employment and inadequate employment quality and conditions. He suggested that India’s greatest challenge would be to provide adequate employment to its young population in order to reap the benefits of its demographic dividend. He suggested that in order to reap the benefits of increased trade, emerging countries would have to begin working towards higher standards, stronger institutions and increased investment in human resources so as to meet the criteria that would be established by mega-regional trade agreements such as the TPP. He also advocated the renewal of the WTO, claiming that one can no longer look at trade in goods and trade in services in isolation.
Séance de travail No. 26: L’avenir commercial de l’Afrique après 2015 – Analyse empirique de cinq scenarios: permutations et impacts possibles de Doha, des APE, de l’AGOA, et des accords commerciaux Chine-Afrique et Sud-Sud sur le développement de l’Afrique
Mwangi Kimenye from the Brookings Institution said that the US African Growth and Opportunity Act (AGOA) expires on 30 September 2015. He asked whether it will be renewed and whether it should be renewed. He also asked whether South Africa should be excluded from the AGOA. He pointed out that some people think it should be extended to include Cambodia or Bangladesh, for example. He said that the AGOA is grossly under-utilized; out of the 6,000 products covered by the AGOA only one-third are exported, with oil exports dominating.
Mr Kimenye presented five scenarios: 1) not extending the AGOA; 2) expanding product coverage; 3) revising the list of currently eligible countries; 4) restructuring the AGOA to resemble the Economic Partnership Agreement (EPA); 5) creating the Continental Free Trade Area, with the European Union and the United States combining their preference schemes. He concluded that if the AGOA is restructured to resemble the EPA, it would be a disaster. Equally, if Bangladesh and Cambodia were added, this would erode AGOA benefits for Africans.
Erja Askola from the European Commission said that 27 countries are embracing EPAs. These countries have either completed negotiations or have reached an interim agreement. She added that if negotiations with East African countries are finalized, the number would grow to 32 countries. She indicated that EPAs had been proposed because unilateral preferences had not delivered since 1975. She said that EPAs are trade and development agreements. She indicated that the alternatives to EPAs are not as attractive. These include equal footing with other developing countries, a standard Generalized System of Preferences (GSP), grouping all developing countries excluding upper middle-income countries, or GSP+ (meaning preferences linked to implementing 27 conventions on sustainable development including human rights, labour rights etc.)
Francis Matambalya from the Nordic Africa Institute said that Africa is the only continent where trade growth is not driven by manufacturing but by fuel. He added that overall trade is not transforming African economies.
Dan Machemba from the Tanzania Chamber of Commerce, Industry and Agriculture asked whether preferences are the problem or whether capacity is the real problem. He indicated that some non-tariff barriers to trade can be the real problem.
Jane Ngigje of the Kenya Flower Council said that 40 per cent of cut flowers exported to the European Union come from Kenya. This industry has an impact on almost 2 million Kenyans. She thinks non-tariff barriers have provided an opportunity to look into Kenya’s domestic rules and standards regarding the flower industry.
Agayo Ogambi from the Kenya National Chamber of Commerce and Industry said that you can call EPAs whatever you want; the most important issue is to end up with a trade agreement that addresses trade capacity constraints in addition to trade preferences. He indicated that raising alternatives such as GSP and GSP+ is not really a welcome argument.
The panel said that the WageIndicator Foundation is a non-profit organization established in Amsterdam in 2003. Its original aim was to help women negotiate higher salaries. It is active in 80 countries throughout Africa, Latin America and Asia, and has a strong presence in Germany, the Netherlands and Brazil.
Its aim is to make its wage data available to the public, free of charge. It targets employees and workers seeking access to better pay, small employers regarding their wage levels, trade unions, non-governmental organizations (NGOs), researchers and the media. It has created an online database on working conditions and wages by conducting web surveys as well as face-to-face surveys.
A large project that the WageIndicator Foundation has embarked on is the Cost of Living Survey, which provides global estimates of living wages (defined as a minimum wage which guarantees that employees can maintain a decent living standard) by country. Living wage has been calculated as cost of food + housing cost + transportation cost + 10 per cent margins. This living wage is subsequently compared with the country’s minimum wage. A country’s living wage tends to be much higher than its minimum wage.
The WageIndicator Foundation seeks to reduce the gap between the living wage and the minimum wage. It sees the living wage as an indicator of economic adequacy and would like to see it serve as a basis for governments to set minimum wages.