MANY developing countries, especially those classified by United Nations as the Least Developed Countries (LDCs), fail to compete in international markets for various reasons including unfair trading rules.
Failure to access international markets deny poor nations the opportunity to boost their economies ending up recording low growth and perpertual poverty and squalour. Insufficient investment resources coupled with poor technology are among the hurdles haunting developing nations to enhance the capacity of the manufacturing sector to produce high quality goods which could compete in the world market.
Despite the setbacks, Tanzania is said to have a better chance of securing unique share to participate competitively in the global trade provided the right development course of action is in place. This was revealed over the weekend by the candidate for the post of World Trade Organisation (WTO) Director General, Mr Roberto Azevedo, at a news conference in Dar es Salaam.
Mr Azevedo had earlier met the Minister for Foreign Affairs and International Co-operation, Mr Bernard Membe, in a tour aimed at presenting to Tanzania his candidature for the top job in global trading watchdog. “Most developing countries including Tanzania possess vast resources which could be transformed into valuable goods and services with competitive nature in the world markets,” he said in an exclusive interview with the ‘Daily News’.
Tanzania, he said, has extensive opportunities of developing tourism, agricultural and mining sectors which could place the country in a distinctive position of participating competitively in the global trade. WTO is an organisation that intends to supervise and liberalise international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade (GATT), which commenced in 1948.
Tanzania is among WTO member countries. The organisation deals with regulation of trade between participating countries; provides a framework for negotiating and formalising trade agreements, and a dispute resolution process aimed at enforcing participants’ adherence to WTO agreements, which are signed by representatives of member governments and ratified by their parliaments.
Most of the issues that the WTO focuses on derive from previous trade negotiations, especially from the Uruguay Round (1986 - 1994). The organization is attempting to complete negotiations on the Doha Development Round, which was launched in 2001 with an explicit focus on addressing the needs of developing countries. As of June 2012, the future of the Doha Round remains uncertain: the work programme lists 21 subjects in which the original deadline of January 1, 2005 was missed, and the round is still incomplete.
The conflict between free trade on industrial goods and services but retention of protectionism on farm subsidies to domestic agricultural sector (requested by developed countries) and the substantiation of the international liberalisation of fair trade on agricultural products (requested by developing countries) remain the major obstacles. These points of contention have hindered any progress to launch new WTO negotiations beyond the Doha Development Round.
As a result of this impasse, there has been an increasing number of bilateral free trade agreements signed. As of July 2012, there are various negotiation groups in the WTO system for the current agricultural trade negotiation which is in the condition of stalemate. In the annual World Economic Forum (WEF) competitiveness study for travel and tourism (2011), the country scores a second position, after Brazil, in the field of natural resources, but out of 139 countries studied, Tanzania’s overall position, however, dropped 12 places from 98 to 110.
Lacking the right course of action which could put clear direction of the development agenda is among factors haunting small economies apart from possessing abundant resources. “It is high time for developing nations to increase investments in technical expertise and infrastructure which are necessary tools for setting development motion to be reflected into stable economic growth and improved living standards,” he added.
The WTO DG candidate expressed gratitude for the positive response and support for his move to vie for the post. The selection process will conclude with a decision by the General Council no later than May 31, this year where nine candidates will contest for the WTO post. Apart from Mr Azevedo from Brazil, others are Mr Alan John Kwadwo Kyerematen (Ghana) and Ms Anabel Gonzalez (Costa Rica).
Also in the list are Ms Mari Elka Pangestu (Indonesia), Mr Tim Groser (New Zealand), Ms Amina Mohamed (Kenya), Mr Ahmad Thougan Hindawi (Jordan), Mr Herminio Blanco (Mexico) and Mr Taeho Bark (Republic of Korea). If elected to the DG post, Mr Azevedo said would ensure that the Doha negotiations are implemented to make WTO systems more responsible for the developing countries especially the LDCs.
When they launched the Doha Round, ministers placed development at its centre. “We seek to place developing countries’ needs and interests at the heart of the Work Programme adopted in this Declaration,” the ministers said. They continued to say, “... We shall continue to make positive efforts designed to ensure that developing countries, and especially the least-developed among them, secure a share in the growth of world trade commensurate with the needs of their economic development.
“In this context, enhanced market access, balanced rules, and well targeted, sustainably financed technical assistance and capacity-building programmes have important roles to play”. The preamble of the Marrakesh agreement states that the activities by the WTO must aim to raise standards of living and ensure full employment.
Using resourcefully the scarce resources for the developing nations was fundamental to participate competitively in the global trade as way to end abject poverty. Highlighting the fact, the Brazilian ambassador to Tanzania, Mr Francisco Luz in his recent visit to the Tanzania Standard Newspapers (TSN) headquarters said investment in natural resources and the benefits accrued should be reflected in improved living standards of the people.
For example, he said Tanzania has a greater chance to boost its Gross Domestic Product (GDP) to above 20 per cent due to immense discoveries of gas in the Indian Ocean. “Economic growth must create social inclusion,” he said, adding that, “Clear transparency on the royalties and other gains from gas resources as well as how the benefits are shared will build public confidence particularly in Mtwara and surrounding areas.” The increased investments in gas consumptions could capacitate low income earners to make use of it as a source of energy in the first place but also as way of protecting the endangered environments.