African Countries and the New Generation of Non-Tariff Barriers: "Standard-takers", "Standard-Compliers" and "Standard-Victims"

Nkuepo, Henri, J., "African Countries and the New Generation of Non-Tariff Barriers: "Standard-takers", "Standard-Compliers" and "Standard-Victims"", WTO, Research and Analysis, Geneva, 15/03/2012

Africa needs to wake up from its long slumber and starts using all its resources, including human, to take what belongs to the continent. While countries benefit from international trade, African countries lose. A recent World Bank research found that Africa loses billions of dollars because it does not trade with itself.(1) Similarly, the continent loses millions of dollars because of high standards in the export market and because of the continent’s increased reliance on resources export.(2) African trade policy-makers are known for their inactiveness in the multilateral trading negotiations and their non-use of the multilateral dispute resolution mechanism. Further, African countries do not participate in the setting of international standards and regulations and, therefore, they do not protect their industries which are generally forced to accept those standards and regulations (standard-takers(3)), must try to comply with those standards and regulations (standard-compliers)(4); and because they have difficulties meeting those standards, they are generally called to face the ‘new generation’(5) of non-tariff barriers (NTB) to trade (standard-victims) resulting from those standards and implemented in Developed countries. Thus, there are two principal reasons why Africa benefits less from international trade. First, Africa trades less with itself(6) and second, its industries, mostly underdeveloped, face high non-tariff barriers from developed countries.

Industrialized countries make it quasi impossible for African countries to trade with them. They set the standards very high and African countries exporters have difficulties in complying with those standards. Over the years, developed countries have designed some new forms of non-tariff barriers, new generation of import controls, to limit the flow of goods, mainly agricultural, from African countries and the preferential trade agreements in place between Africa and those countries (i.e. EU’s everything But Arms and US’s African Growth and Opportunity) are not really helping. These new generation NTBs are the phytosanitary control and product standard (quality), the antidumping rules, the labor and environmental controls, and strong rules of origin. These measures, although based on WTO’s objective to further trade while protecting the consumers and the environment, are mostly more restrictive; over the standard set by the organization. These standard-PLUS measures are generally designed by experts who are mainly from the corporate sectors and who protect themselves from international competitions.

In response to these standard-PLUS measures, African countries generally adopt trade restrictive measures which also affect their African neighbors. This negative competition (countries’ negative response to trade restrictive policies) is an important challenge to intra-African trade (NTBs and tariffs are important challenges to intra-African Trade(7)) and, therefore, costs the continent a lot of money. Further, Africa’s Economy is dominated by resources exports and the continent’s manufacturing sector is underdeveloped. Instead of negotiating with developed countries to modernize its technologies and develop its infrastructures, Africa focuses more on reacting to NTBs implemented by those countries. Result, the continent’s manufacturing sector is the least developed in the world, its service sector is archaic and Africa is the only continent where inventions remain a luxury. That is, it can be said that Africa is the biggest loser of the negative completion.

Questions: how can African and other developing countries go from being losers to winners? How can the WTO help since it is the number one priority of African Countries,(8) the only place where negotiations can help them to effectively and possibly deal with issues such as trade distorting subsidies, negative competitions, and standard-Plus measures? How can these standard-Plus measures be addressed through negotiations or the WTO dispute settlement body?

These are important questions that the WTO should always consider because the organization is losing credibility due to multiplied trade restrictive measures and practices by industrialized countries. Many detractors of the organization continue to believe that the organization is there to serve the interest of developed countries and to impoverish poor African countries. While this is not the case, the fact that African countries continue lose millions of dollars, decades after the establishment of the Organization, because of developed countries members’ standard-Plus measures can be used as a perfect argument against the WTO’s commitment to design positive efforts ‘…to ensure that developing countries, and especially the least developed among them, secure a share in the growth in international trade commensurate with the needs of their economic development’.(9)

So far, developing countries, and mostly African ones, have shown that the WTO dispute settlement mechanism is not their thing and even when their rights (as WTO members) are violated by industrialized countries, they do not usually bring the case to the organization’s panel. For transparency purposes and, in order to meet its objective of helping developing countries ‘…to secure a share in the growth in international trade…’, the WTO has to allow, in its provisions which give developing countries special and differential treatment, other countries or International organizations to bring an action to the WTO panel, on behalf of a developing country, against a developed state that implements trade restrictive measures. A consequence of this is that there will be more work for the panel and in order to address this, there can be a form of decentralization, creation of regional WTO panel with the current one being the Appellate body (last recourse).

Notes:

1. See World Bank Defragmenting Africa: Deepening Regional Trade Integration in Goods and Services, World Bank (2012) Bajar documento de la Biblioteca de FICBC

2. See Andrew Mold Non-Tariff Barriers: Their Prevalence and Relevance for African Countries, Work in Progress N.25, African Trade Policy Center (2005)Bajar documento de la Biblioteca de FICBC

3. See Andrew Mold (2005).

4. World Bank Standards and Global Trade: A Voice for Africa, The International Bank for Reconstruction and Development, (2003) Bajar documento de la Biblioteca de FICBC

5. See Andrew Mold (2005).

6. This reason will not be developed here. See the World Bank Report Supra.

7. See African Union Action Plan For Boosting Intra-African Trade, adopted in Addis Ababa in January 2012 during the 18Th AU Summit.

8. See Henri J. Nkuepo Africa’s Continental Free Trade Area: A Closer Look at the 2012 African Union’s Action Plan for Boosting Intra-African Trade, Africa’s Trade Law Newsletter, Issue Bajar documento de la Biblioteca de FICBC

9. See the Preamble of the Marrakesh Agreement establishing the WTO.