WTO rejects Africans’ request for study of SAP effects before more tariff cuts

17 January 2002

The proposal by seven African countries that the World Trade Organisation (WTO study the impacts of trade liberalisation measures imposed by structural adjustment programmes (SAPs) before launching another round of tariff-cutting negotiations has been ignored.

The revised Draft Ministerial Declaration for the Fourth WTO Ministerial Meeting in Doha, Qatar which begins today contains a clause committing developing countries to negotiations on ‘market-access for non-agricultural products’ or industrial tariffs (Paragraph 16). Negotiations should, according to the WTO, lead to agreements to eliminate tariffs on exports to developing countries.

This was in spite of requests by the African countries that a comprehensive study be made on the consequences of past tariff-cutting measures effected under the SAPs before further measures were implemented. The proposal – submitted by Kenya, Mozambique, Nigeria, Tanzania, Uganda, Zimbabwe and Zambia – was made in response to the original draft declaration issued by WTO General Council chair Stuart Harbinson in September.

A statement by the seven countries called for ‘a study process involving stock-taking, examination and analysis’ in order “to draw lessons form the experience of the past and make conclusions on the most appropriate manner in which to proceed on this matter”.

The countries pointed out that many developing countries were subjected to “an over-ambitious liberalisation programme” as a result of structural adjustment reform policies that did not offer much flexibility in their tariff-cutting exercises. Consequently, many businesses were shut down as uncontrolled imports flowed into the countries, resulting in widespread unemployment and the collapse of local industries.

Senegal, for example, experienced large job losses following a two-stage liberalisation programme that reduced the average effective rate of protection form 165 percent in 1985 to 90 percent in 1998. A third of all manufacturing jobs were eliminated by the early 1990s.

The reduction in customs tariffs, say the African countries, has also led to losses in government revenue leaving many countries with budget deficits and insufficient resources for development. This is compounded by declining aid flows, the fall in commodity prices and the continuation of debt servicing.

Aside from calling for a detailed study on the effects of tariff elimination in developing countries, the African group proposed that the Draft Declaration should clarify that exemptions from further liberalisation commitments shall be given to least developed countries and to developing countries that have been or will be adversely affected by the measures.

The Draft Declaration does not address any of these concerns save for a qualification that negotiations on tariff cuts “shall take fully into account the special needs and interests of developing and least-developed countries”.

This mandate, say Third World Network, is too wide in scope and such considerations (on special needs and interests) have been repeatedly ignored in WTO negotiations since before the Tokyo Round of talks.

See also: Bank and Fund watchers must watch WTO

Preparations for the WTO Fourth Ministerial Conference:Proposal on Market Access for Non-Agricultural Products, submitted by Kenya, Mozambique, Nigeria, Tanzania, Uganda, Zambia and Zimbabwe

Rapid Comment on Revised Doha Ministerial Declaration’.by Martin Khor of Third World Network

Harbinson’s Draft for Economic Talibanisation of WTO‘ by Chakravathi Raghavan of Third World Network

Draft Ministerial Declaration