TRADE-AFRICA: WTO at 50, Africa Not Smiling

By IPS Correspondents Reprint | | Print |

Lewis Machipisa

GENEVA, May 20 1998 (IPS) - The 50 years that have passed since the General Agreement on Tariffs and Trade (GATT) came into force in 1948 have seen the dismantling of barriers to world trade, but for people in some parts of the world, there is little to smile about.

This is especially true of Africa, according to African delegates at the Second Ministerial Meeting of the World Trade Organisation (WTO) the institution that has succeeded GATT. They commented that celebrations marking the 50th anniversary of the global multilateral trading system should have been declared a private party for rich nations.

Of the roughly 14 state leaders who attended the May 18-20 ministerial conference/50th anniversary celebration, just two were from Africa — South Africa’s Nelson Mandela and Henri Konan Bedie of Cote d’Ivoire — and only three other developing nations – Cuba, Brazil and Singapore – were represented by their heads.

“That African leaders have not bothered to attend is a big indication of how dissatisfied they are with the events of the past 50 years,” commented an African diplomat here.

Said Nathan Shamuyarira, Zimbabwe’s Industry and Commerce minister: “For many decades, the GATT has had a legacy of treating developing countries like second class members of a rich men’s exclusive club.” As a result, the GATT-based multilateral trading system could not address — and in many ways contributed to — the difficulties faced by developing countries, he said.

Some here said the best way Africa could have celebrated the GATT/WTO 50th anniversary was to boycott the event so as to drum home the point that the field is uneven and heavily tilted in favour of richer countries.

While WTO and Western officials have touted the global system’s contribution to free trade and economic growth, recent research suggests that it is mainly at the service of transnational corporations. The WTO’s 132 member countries are responsible for decision-making within the institution, but critics say it is the private sector — which conducts the actual trade — that is increasingly influencing policy positions of member countries.

More than two-thirds of world trade involves at least one transnational and half of it occurs between branches of the same transnational around the world.

“There is little to celebrate” said Myriam Vander Stichele, author of a new report ‘Towards a Transnational’s Organisation’. “All over the world people experience that they cannot benefit from a trade system dominated by multinationals.”

But the blame needs to be shared, some analysts charge. According to Patrick Low, Director of Economic Research in the WTO Secretariat, Africa has been its own worst enemy.

While he conceded that the multilateral trading system needed to take African and other developing nations on board, he took a swipe at Africa’s poor trade polices.

“I have not seen any rendition of the argument that globalisation is causing poverty,” Low told IPS. “The problem of exclusion has to be understood in other terms. From work that has been done on African economies, it has been demonstrated in very clear correlations between high growth and good trade reforms and a degree of openness of one’s economy.

“The question of relative success of different economies in a globalised world has a lot to do with the policies that the developing countries themselves pursue and I think there is increasing recognition of this in Africa too.”

U.S President Bill Clinton reflected a position that appears to dominate the thinking in most of the world’s capitals when he told delegates at the meeting: “… globalistion is not a policy choice. It is a fact.”

“But all of us face a choice,” he added in his address, delivered on Monday. “We can work to shape these powerful forces of change to the benefit of our people. Or can we retreat behind walls of protectionism and get left behind in the global economy.”

“At a moment when, for the first time in human history, a majority of the world’s people live under government of their own choosing, when the argument over which is better – free enterprise or state socialism – has been won … when people on every continent seek to join the free market system, those of us who have benefited from that system and led it cannot turn our backs,” Clinton stressed.

According to the WTO, the global trade system has contributed to an extraordinary period of economic growth and increased prosperity. Trade has expanded faster than production by a significant margin over the last five decades: on an annual average basis, trade has multiplied 15-fold while output has risen six fold, the WTO has reported.

However, according to Shamuyarira, that system has produced 32 of the poorest countries in Africa, which has 53 nations, and even those not listed as dirt poor are heavily indebted. And things could get worse: UN Development Programme (UNDP) figures show that Sub-Saharan African countries stand to lose up to 1.2 billion dollars a year from trade liberalisation.

“Africa considers that there is not much to celebrate,” said Shamuyarira. “As stated in the founding provisions, the paramount objective underlying the establishment of GATT and its successor, WTO, was to raise living standards worldwide. After 50 years of existence, the GATT/WTO system cannot claim to have achieved this objective for many of the developing and especially African countries.”

He is not the only African official who feels that way. His South African counterpart, Alec Irwin, noted that while 50 years of any organisation is worth commemorating, “Africa definitely isn’t celebrating.”