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Tuesday, 02 May 2017

New study into implications of WTO for African trade

The National Agricultural Marketing Council of South Africa, together with tralac, an NGO studying trade law, has released a study on African agricultural trade as it plays out on the world stage. The conclusion of ‘WTO: Agricultural issues for Africa’ by Prof Ron Sandrey and his fellow authors, is that there are few agricultural sectors where Africa would benefit from WTO intervention and that the continent couldn’t do better than its current preferential access to the European Union. For South Africa, which is designated a developed nation under WTO rules (apparently a self-selected designation), the situation is more complex. The WTO’s main value for Africa might lie in the area of trade with China, although it is blisteringly expensive to take a case to the WTO. A major limiting factor to trade in Africa, as has often been said, is the poor state of the infrastructure. Prof Sandrey refers to an African country that had to be alerted to the woeful state of its national port by a WTO report, instead of seeing themselves what was right outside the window. According to Prof Sandrey, who was an economist for the New Zealand Ministry of Foreign Affairs before turning his focus on African trade: “Perversely, with respect to African access into the EU with the Economic Partnership Agreements (EPAs) the African interest is to limit a WTO agreement that would dilute the value of preferential access.” However, he emphasises that the value brought by a rules-based trading system is very large and that Africa – which comprises a third of the WTO – should support the organisation for its wider benefits. South Africa is the main African agricultural exporter, followed by Côte d’Ivoire, Morocco, Egypt, Ethiopia and Ghana. Africa’s export contribution to agricultural world trade has consistently been between 3.6% and 3.8% over the past few years. The European Union is still the main trading partner of Africa with 39.8% of Africa’s exports going there and a further 17.2% is intra-African trade, although mostly flowing to South Africa. There is very limited intra-African trade but the rest of Africa is becoming an increasingly important export destination for South Africa.

Source: Freshplaza