Power of free trade can unshackle Africa
IPN Opinion article
Business Day (South Africa)
AS THE World Trade Organisation (WTO) meeting in Doha, Qatar, draws nearer, Africa seems not to expect much from it. Debate on free trade in Africa is on, with many dismissing the WTO as an agent out to create a market for developed countries.
Africa is seen as marginalised, participating only as a beggar. Barrack Muluka (Sunday Standard, October 28) said: "Rich nations will come to bargain through an assortment of exclusive elite haggling clubs. Africa will turn up as usual, as a fragmented collection of paupers, each with a begging bowl in hand."
In his article, Surprise Winners in WTO the poor (Nation, October 25), the WTO's director-general, Mike Moore, dismissed as myths a sweeping generalisation that Third World nations are marginalised.
He asserted that in the past 10 years developing nations consistently outperformed industrialised nations in terms of export growth an average of almost 10% a year compared with 5% for the latter countries.
Moore dismissed another claim: that rich country markets are more closed and protected while developing nations are forced to open up. More barriers existed in the developing countries. The average US barrier is 3%, for Europe 3,6%, for the industrialised nations as a whole under 4% and for developing nations 12%.
Third World countries are gaining ground every other day at the WTO, contrary to the belief they are losing out. The trade body chief mentioned India, Brazil and SA as nations in the forefront in defining the parameters of future WTO programmes despite their Third World status.
However, Muluka's arguments bring to light the need for both developed and developing countries to adhere to WTO tenets. The recent bioterrorist attacks in the US have led to a quest to relax industrial rights laws on patented drugs. The US government is asking German pharmaceutical group Bayer to relax its patent rights on anthrax drugs.
This contrasted with what transpired recently in SA when a standoff ensued between pharmaceutical companies and SA's government on the production of cheap antiretroviral drugs for HIV/AIDS. A keen analysis, however, depicts the fact that whether it is a poor country or a rich one that seeks to infringe on patent rights, the results are the same. It will discourage research and slow down creativity.
As African delegates prepare for Doha they ought to recognise the fact trade curbs contribute to scarcity rather than abundance. This applies to both poor and developed nations.
Free exchange of goods is good for all. It is absurd to regard exchange of goods and services as not beneficial to all parties. The arguments that rich countries are out to expand their markets cannot hold water, because a market without the purchasing ability is not a market; not unless it will be some form of altruistic free donation.
The markets must be opened either way in the rich and the poor countries, this will enhance productivity and purchasing power. The seven moral arguments for free trade as given by Daniel Griswold of the Cato Institute, a Washington-based public policy think-tank, could well be part of participants' notes.
These points are that free trade: respects individual dignity and sovereignty; it restrains the power of state; it encourages individuals to cultivate moral values; it brings people together; it encourages other basic human rights; it fosters peace; and it gives the poor greater opportunities to create wealth.
What Africa needs are "responsible governments" that enforce rule of law and create an enabling environment for vibrant economic activities.