Zhen Kun Wang
University of Sussex – Sussex European Institute
L. Alan Winters
University of Sussex; Institute for the Study of Labor (IZA); Centre for Economic Policy Research (CEPR)
World Bank Policy Research Working Paper No. 1846
Countries in Sub-Saharan Africa won fewer concessions on their exports in the Uruguay Round than did other developing countries, but they still emerged facing fewer or lower restrictions than others. They should be more active in the next Round, focusing negotiations not on trade preferences but on bound most-favored-nation tariff reductions.
Openness and liberal trade policies are associated with higher exports and economic growth. Sub-Saharan African countries are mostly still relatively closed, and one of their top priorities should be to open up. With some important, identifiable, exceptions African exports are not disproportionately restricted in OECD markets. Because of Sub-Saharan Africa’s small economic size and because its decline in competitiveness has been spread over nearly all sectors, improvements in its performance should not unduly disturb other members of the world economy and should not encounter major resistance among trading partners.
Sub-Saharan African countries won fewer concessions on their exports in the Uruguay Round than did other developing countries – possibly because they offered fewer concessions on imports. Nonetheless, because they started the Round with more favorable treatment, they still emerged from it facing fewer or lower restrictions than other developing countries.
In the next Round of trade negotiations, Sub-Saharan countries have some rights to negotiate (according to the GATT/WTO principal suppliers traditions) and a little leverage. They should be active in this Round, both giving and requesting concessions, and economists should help them prepare the ground.
Trade preferences are not the route to integrating with the world economy. In terms of access to partners’ markets, trade preferences are no substitute for bound most-favored-nation tariff reductions, and they also encourage shortsighted and distortionary behavior within the recipients’ economy. Africa should focus its negotiating efforts on most-favored-nation reductions rather than trade preferences.
This paper – a joint product of the New Products and Outreach Division, Economic Development Institute, and Development Research Group – was prepared for the African Economic Research Consortium`s Biannual Research Workshop, Nairobi, May 24-29, 1997.