What the Commission for Africa said about Trade
Trade has been a key driver of growth in many developing countries over the last 50 years. But, as the More Trade and Fairer Trade chapter of the Commission for Africa report highlighted, Africa’s share of trade is very low and trade amongst African countries had stagnated in the preceding three decades.
The report argued that Africa needed to increase its share of world trade, as well as promoting inter-African trade, to achieve sustainable growth and poverty reduction – but faced huge challenges in doing so.
The chapter focused on three areas for action in improving trade: the promotion of regional trade; the removal of the global barriers that hamper trade by developing countries; and the support that needed to be given to sub-Saharan African countries to help them take the opportunities that would be brought about by the removal of global trade barriers.
Building the infrastructure needed to trade across the continent was one of the key issues highlighted by the chapter. To increase regional trade, the report also recommended reform of cumbersome customs procedures and a reduction in the corruption and excessive bureaucracy that increase the cost and time of trading between one African country and another. The removal of internal tariffs and the creation of free trade areas across the continent, it argues, would also boost the continent’s internal trading performance.
A key external factor hampering Africa’s ability to trade globally, argues the report, is the payment of subsidies by richer countries to their own agribusinesses. These, it argues, put African farmers at an unfair competitive disadvantage and the report recommends they be abolished to allow a more level playing field.
To improve African producers’ access to markets in the developed world, the report recommends rich nations reduce their high tariffs and reform their quota barriers on the goods that are most important to African countries such as sugar and cotton.
The chapter recommended that many of these reforms be achieved through putting development at the centre of the Doha round of world trade talks and completing them swiftly – no later than the end of 2006.
The chapter also argued that developed countries should re-examine the ‘non-tariff’ barriers – such as some of the standards that they impose on imports – that close their markets to African goods. It also called upon developed countries to extend special schemes that allow low income sub-Saharan African countries to access developed country markets, which could have an immediate positive effect to their economies.
Finally, the report recommended increased financial support to help improve Africa’s capacity to produce and trade.
What progress has been made since 2005 on these recommendations? Find out in our forthcoming report to be published in September.