At the commemoration of the 50th anniversary of the origin of the international trading system in 1998 in Geneva, Nelson Mandela in his speech said: “Developing countries must accept that we want to be fully part of the WTO, and that includes improving the management of the world system trade to ensure our economies grow.”
This was an important message. The World Trade Organization (WTO) had evolved from the General Agreement on Trade and Tariffs (GATT) β on African soil, in 1994 in Marrakesh. Mandela’s view remains relevant at the 30-year-old WTO’s 13th biennial ministerial conference in Abu Dhabi, UAE, from February 26 to 29.
Currently, 44 African countries are members of the WTO, with a further nine countries holding ‘observer status’. only two are not linked to the WTO at all. African countries currently account for 27% of full membership. Notably, the vast majority of these countries joined the WTO before China, which joined in 2001.
Despite this, not much has changed for Africa in the global trading system over the past 30 years. If anything, it has gotten worse. In 2023, the African continent accounted for 2.7% of global exports. In 1973, this share was 4.8%. Meanwhile, the continent’s share of world imports is higher than exports today at 2.9%, but in 1973 it was lower at 3.9%.
In the decades since global trade rules were introduced, the continent has fallen into a persistent trade deficit with the rest of the world. An important reason for this is the nature of the rules. The WTO is very similar to its predecessor, the GATT. This was drawn up and agreed to by 23 countries in 1947, none of which were African β at that time most African countries were still colonies.
Admirable goals, on paper
On paper, the ambitions of the GATT and now the WTO are admirable: to expand market access by reducing explicit and implicit trade barriers. to provide a platform for the resolution of trade disputes; and to provide technical assistance and capacity building to support market access.
In practice, the rules are designed in a way that limits the ability of Africans to improve the global trading system in the way Mandela hoped.
For example, the WTO does not vote. It seeks to negotiate through one country, one voice: but the negotiating powers are incredibly unbalanced. Many African countries β responsibly β limit their delegations, due to low budgets.
Standard WTO practices such as holding “informal” meetings and “green rooms” leave smaller economies out. Negotiated agreements on issues important to African development β ββsuch as the degree of agricultural subsidies allowed in rich countries β can, and often do, run counter to African interests, or at best, de-prioritize them.
Another example is the dispute system. This is expected to be a major and contentious issue at the Abu Dhabi ministerial conference.
In the 27-year history of the WTO dispute settlement system, African countries have acted as defendants or complainants in only 13 cases β just over 2% of all cases. Even fewer have been resolved. There is no doubt that most African countries would make more complaints, especially regarding protectionist measures imposed by high-income economies, if they had the power, support and financial resources to do so.
A further example is found in the intellectual property (IP) rules promoted by the WTO. These are based on the theory that innovation requires strong intellectual property protection, for example through long-term patents and copyrights β often attributed to a 1962 paper by the American economist Kenneth Arrow. The WTO promotes these rules uniformly across countries, with some concessions on the substance and timing of obligations for developing and least developed countries.
But this theory has been challenged. Instead, open innovation has been proposed β where different groups participate in product development and innovation.
In addition, the WTO promotes certain policies ostensibly to protect people from food hazards β known as sanitary and phytosanitary measures β or to protect health β such as compulsory drug licensing. It has been well documented β especially during the experience of the Covid-19 pandemic β that these policies prevent many countries from accessing essential goods.
Outlook for the meeting in Abu Dhabi
So the question is: can this 13th WTO Ministerial Conference make a difference? Can it help Africa double or even triple its share of world trade, as WTO Director-General β former Nigerian finance minister Ngozi Okonjo-Iweala β has said must happen? He has spoken, for example, of encouraging a new approach to world trade β βre-globalisationβ, β for example of diversifying supply chains, including those in Africa.
Indeed, both agricultural subsidies and reform of the dispute settlement system are expected to be the main topics on the negotiating tables in Abu Dhabi.
But even when the WTO has proclaimed itself a great success, as it did in 2015 in Nairobi, promising to “especially benefit the poorest members of the organization,” the reality is a bit murkier.
In the past, the WTO secretariat and chief negotiators have tried to protect its reputation by focusing on less controversial areas. The EU and the US had already reduced to almost zero a narrow range of agricultural subsidies that were eventually banned in the Nairobi text. This made it easier for them to register. Meanwhile, they continue to use other types of agricultural subsidies, safe in the knowledge that their inclusion on the agenda will be considered “very difficult”.
AfCFTA is not a sanctuary
Now that African countries have the African Continental Free Trade Area (AfCFTA), effective from 2021, readers may think that Africa should not worry about the WTO or reforming trade with others. Can Africa not rely on its own trade and just let the WTO continue?
I would humbly suggest that this is a naive approach. Today, Africa has two options alongside the promotion of the AfCFTA. either it leaves the WTO because it is not working for Africa β or, as Mandela encouraged, it pushes hard and creatively to reshape the global trading system to its advantage.
The latter may work, starting from Abu Dhabi. The revival of the WTO’s dispute settlement mechanism is being discussed there, after it has been suppressed by the US since 2016. In the negotiation rooms, African negotiators could collectively extract a change in the composition of this so far useless body, in exchange for its return to Zoe.
In negotiating rooms where food and fertilizer export bans are proposed as the key problems to be solved in agricultural markets, African negotiators could work to take it off the table.
They could be replaced by proposals to ban “carbon border taxes”. It is estimated that the EU border tax could cost the African continent $25 billion a year from 2026 β an amount similar to what all OECD countries spent on humanitarian aid in 2022.
It is clear that the WTO needs a major overhaul in its 30th year of operation. Growing intra-African trade will not solve the distortions of market forces that have led to Africa’s growing trade deficit with the world. If the WTO and its supporters want African support, they need to start proving that it can work for Africa. And as Africans, we must demand and suggest ways to do this.