MAKING TRADE HELP DEVELOPMENT

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ARUSHA, Nov 7 2006 (IPS) - The link between export growth and poverty reduction is not automatic, writes Benjamin W. Mkapa, former President of Tanzania (1995-2005) and President of the South Center, an Inter-Governmental Organization based in Geneva, Switzerland. In this analysis, Mkapa writes that making international trade a more effective mechanism of poverty reduction for poor countries requires a development approach with three pillars: better national development strategies, improvements in the international trade regime, and increased and effective international financial and technical assistance for developing production and trade capacities. For the developing countries, the potential of Doha has turned into a broken dream and an unkept promise. Once again, the world has allowed the worst impulse of humanity –to take as much as possible while giving as little as possible– to triumph over the common sense of the wealth that comes from giving. Once again, our generation of leadership has allowed another opportunity to slip through our fingers. How much longer do we have to suffer civil strife and violence before accepting the reality that at the end of the day, peace can only be sustained when we allow all to share in the wealth that is being created?

But the link between export growth and poverty reduction is not automatic. As outlined by the UN Conference on Trade and Development in 2004, making international trade a more effective mechanism of poverty reduction for poor countries requires a development approach with three pillars: better national development strategies, improvements in the international trade regime, and increased and effective international financial and technical assistance for developing production and trade capacities.

Such capacities must be developed at the domestic and sub-regional level in order to ensure a long-term approach that is rooted in countries’ own development strategies. Tanzania’s founding President, Mwalimu Julius Nyerere, perhaps put it best: “It is only when the South realises and develops its own potential…that it will find an adequate response from the North.”

This ability has to be developed and nurtured at the national level because negotiating teams are mandated by individual countries. But serious effort must also be made to build regional ability. Individually, developing countries are too resource-poor to be able to bear the cost of effective negotiation, or indeed participation in global trade. National capacity must seek and integrate with regional capacity-building.

Over the past decade, our counties have become increasingly active participants in international trade fora, not only at the World Trade Organisation (WTO), but also in the context of EU-ACP (African, Caribbean, and Pacific) Economic Partnership Agreements, within our own regions, in bilateral arrangements, and in other trade-related groupings such as the Africa Group and the G-20.

All of these require expertise across a wide range of issue-areas. The number and knowledge base of our trade professionals has increased in an attempt to meet these demands, thanks in part to support from donors. However, we continue to lag far behind our developed-country counterparts, who enjoy ready access to top-level trade expertise across a number of negotiating fronts.

In all trade fora, we have consistently voiced the need for the international community to uphold fair trade practices. We have also called for developing countries to be given trade flexibility, including maintaining trade preferences. Along the way, we have met with occasional success, thanks in large part to our own capacity that has been developed. The Integrated Framework and Aid for Trade initiatives, for instance, are envisaged as instruments intended to reduce poverty that have been integrated into the WTO and other trading arrangements.

Over the first five years of this Millennium, the international community has had numerous opportunities to consider ways to reduce the suffering and misery that comes from the increasing incidence of poverty as the divide widens between rich and poor nations and rich and poor individuals within nations. The dynamic changes in technology and the increasing ease of capital flows across borders offer tremendous opportunities for developing countries to share in expanding global wealth.

When the world embarked on the Doha negotiations, the initial objective was to infuse dynamism into agricultural trade negotiations that had already begun in 2000 under the WTO’s built-in agenda. From the very beginning up to the suspension of talks, the basic approach of the developed industrialised countries was to link agricultural trade liberalisation with the objective of deep liberalisation in industrial tariffs and services in developing countries, particularly the more advanced of the latter, such as India and Brazil.

From the very beginning, we in the LDCs recognised the dangers of such a strategy and made a plea on behalf of the less privileged of the world’s citizens for trade negotiations to focus on the development dimension. We had repeatedly made it clear that a round aiming at deep and ambitious cuts in industrial and agricultural tariffs across the board for all countries may not be a realistic scenario before deliberate efforts are made to enable the majority of the WTO membership to benefit from such liberalisation.

Our inability to make effective use of preferential trade opportunities demonstrated this clearly. If the majority of the LDCs are unable to make effective use of de facto and unilateral preferences such as the African Growth and Opportunity Act, what is the point of negotiating liberalisation schemes that could even be more stunting in terms of industrial growth and exports?

For the developing countries, the potential of Doha has turned into a broken dream and an unkept promise. Once again, the world has allowed the worst impulse of humanity –to take as much as possible while giving as little as possible– to triumph over the common sense of the wealth that comes from giving. Once again, our generation of leadership has allowed another opportunity to slip through our fingers.

For what, then, are we going to be remembered by posterity? How much longer do we have to suffer civil strife and violence before accepting the reality that at the end of the day, peace can only be sustained when we allow all to share in the wealth that is being created? How much longer do we have to see suffering and misery from the direct effects of poverty from abject want and the indirect pain of poverty from dysfunctional states and the scramble for economic resources within and between nations wreak havoc upon the desire for peace? (END/COPYRIGHT IPS)