Africa in the Doha Round

Pages81-91

Page 81

Africa's two key objectives in the World Trade Organization's current Doha Round of trade negotiations have been to increase access to industrial country markets and continue to benefit from preferential treatment. A new IMF Policy Discussion Paper argues, however, that African negotiators should not overlook the potential market access gains in developing countries, where trade barriers remain relatively high and demand for African imports has expanded substantially over the past decades.

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Africa in the Doha Round: Dealing with preference erosion and beyond

Many African countries face a dilemma in the World Trade Organization's (WTO) current Doha Round of trade negotiations. On the one hand, they want industrial countries to open their markets further, and, on the other, they are apprehensive about losing preferential access to these markets as a result of multilateral liberalization.

How can African countries deal with preference erosion and pursue their interests under the Doha Round? A new IMF Policy Discussion Paper argues that they should seek greater market access-not only in industrial countries but also in developing countries-and strengthen their commitment to liberalization.

Where should Africa seek greater market access and for which products? Part of the answer lies in the continent's pattern of trade, which has shifted over the past 25 years. While industrial countries have remained the continent's dominant export market and intra-African exports have remained low, developing countries, especially those in Asia, have become the continent's fastest-growing export market. Equally significant is the increasing share of Africa's imports that come from developing countries (see chart). Moreover, these countries have become an important source of foreign direct investment and technology transfer, which are closely linked to Africa's export industries, such as commodities and clothing.

Assuming that these trends continue, Africa has an everincreasing interest in trade reform in these countries.

Africa's export composition, dominated by primary commodities, also has a bearing on the continent's negotiation strategy in the Doha Round. Agricultural products account for over one-fourth of its total exports. This implies, first, that because most-favored-nation tariffs on most industrial goods...

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