A couple of weeks ago I was in Lagos (Nigeria) talking to a business group about world trade and the WTO. I suggested that the decision of the African-Caribbean and Least Developed Countries group at the WTO’s Cancún Ministerial meeting to walk away from the negotiations on issues such as trade facilitation and investment was a strategic error that I hoped African business would try to correct. The next speaker at the seminar—a Nigerian trade consultant—said I was wrong: the Cancún walk-out was an effective blow that the developing countries of the South had delivered to the industrialized North. He got a round of applause from the business people present. Others in Africa, however, share my view. Here’s a comment from ‘The Nation’ (Kenya) this week: bq. There are some political leaders and other observers who falsely portray WTO issues as a simplistic North / South conflict. The reality is that the African economies (which account for less than five percent of world trade) are not viewed as a threat by developed countries. bq. Ironically, at Cancun, some very protectionist states were allowed to hide behind the rhetoric of “Third World solidarity,” while truly struggling economies like Kenya are in fact far more hurt by the trade-distorting policies of other developing economies (via “AllAfrica.com”:http://allafrica.com/stories/200403020021.html) Developing countries might repeat the Cancún mistake unless their business communities start taking the WTO talks seriously and insist that their governments stop playing politics with real market opportunities. This means understanding why the refusal to negotiate at Cancún was a strategic error: # You can play the ‘walk-out’ card just once or it loses it’s impact. Experienced negotiators know that when you walk out you must make it very clear what you want as the price of your return—or you waste the play. The African etc. group at Cancún walked out saying they didn’t want something (negotiations on the ‘Singapore issues’ to which they had agreed at Doha). This negative was the weakest possible strategic objective when much stronger objectives were on offer such as, for example, the elimination of export subsidies that were undermining their agricultural economies
# The ‘negative condition’ was, in fact, a profound mistake. African etc. economies (Nigeria, perhaps most of all) desperately need progress on trade facilitation and investment. Partly at the urging of global NGOs, the Africans at Cancún walked out on precisely the wrong issues. What did Africa get out of Cancún? In my view, nothing but delay on matters that they really need to progress. They let the industrialized countries off the hook, so they could face elections (USA), and the extension of agricultural subsidies to 10 new countries (EU) in 2004 without outside pressure on the protectionist aspects of their trade policies.
Peter Gallagher is student of piano and photography. He was formerly a senior trade official of the Australian government. For some years after leaving government, he consulted to international organizations, governments and business groups on trade and public policy.
He teaches graduate classes at the University of Adelaide on trade research methods and the role of firms in trade and growth and tweets trade (and other) stuff from @pwgallagher