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Africa Economy: Africa calls for fair trade practices ahead of WTO meeting

Xinhua, December 15, 2015 Adjust font size:

South African Trade Minister Rob Davies said Monday that African countries were being ripped off their fair share of the proceeds from trade in raw agricultural commodities such as coffee due to its lack of representation at the world market.

Citing recent reports showing the worldwide coffee marketing value chain was worth 100 billion U.S. dollars while African coffee exporters earned a paltry 6 billion dollars, Davies said Africa will benefit from its share of the world trade only if it was facilitated to participate internationally.

Speaking at the 4th China Roundtable ahead of the WTO Ministerial Conference in Nairobi, Davies said the lack of industries in Africa was to blame for the continent's poor share of the world trade and its low returns from the global trade.

"The value chains have not benefited Africa. Africa needs assistance so that it can weather the next wave of the financial crisis. We must industrialise. We can only do this through proper trade policies. It is not the trade rule that is the problem, it is the lack of products to trade across," the minister said.

"We must create regional value chains. We must create space to slow down the importation of the finished goods and we must have space to industrialise," the minister said at a panel debate on Africa's perspectives on the future of the trading system after the roundtable.

The debate convened by China is part of a series of debates the WTO Secretariat intends to hold after signing an agreement with China to facilitate the trade participation of poor countries.

Lesotho's Minister of Trade Joshua Setipa said while the foreign multinational corporations mostly dominated the international value chains, a requirement for the decentralization of the trading system, especially in the textile sector, would benefit more African countries.

"The textile industry can play a role in industrialization in African countries because it requires more labour. It is central to manufacturing. This means it is also a platform for our countries to enter into new sectors like motor vehicle sector where we also provide services associated with the textile sector such as the provision of seats for new vehicles," Setipa said.

"We have improved on our volume of trade in Africa. We have also managed to integrate into the global market and the global value chain," the minister added.

The WTO is discussing further opening up of markets to produce from African countries.

"These global value chains are not a dream. They are already happening," said Aracha Gonzales, the Chief Executive of the International Trade Centre, a technical body created by the WTO.

She said to support trade, a new system to support local small and medium enterprises in poor countries was required to ensure these local companies benefit from international trade.

The ITC executive said the African region would only benefit from international trade if it manages to create local markets and regional trading blocs that would benefit locally produced goods. Endit