Transcript Towards Equitable Agricultural Development in the EAC: An

TOWARDS EQUITABLE
AGRICULTURAL DEVELOPMENT
IN THE EAC:
An Analysis of the
Multilateral Trading
System
Fostering Equitable Agricultural
Development in Africa (FEAD) Project
STRUCTURE OF THE PRESENTATION

Agricultural disciplines in the Multilateral Trading
System (MTS)

Equitable Agricultural Development

Towards an Enabling Environment (Opportunities
& Constraints)

Conclusion and the way forward
AGRICULTURAL DISCIPLINES IN THE
MTS

The WTO Agreement on Agriculture
disciplines:

Market Access

Domestic Support

Export Subsidies
AGRICULTURAL DISCIPLINES IN THE MTS:
MARKET ACCESS
Current disciplines
Tariffication of NTMs provided
transparency and predictability
HOWEVER…
Resulted in tariff peaks for
politically sensitive products
Under negotiation
• Tiered formula seeks to redress tariff
peaks
• Highest tariff rates to receive biggest
reduction
• Developing count. lesser tariff cuts
• LDCs exempted from tariff
reductions
• Tariff reductions and elimination
of tariff escalation for tropical
products
STRATEGIC INTEREST OF EAC
REGION
Would facilitate value-addition on
their agricultural products, sold at
higher prices on world market andSpecial Safeguard Measures for
Developing Countries
increasing incomes for farmers
AGRICULTURAL DISCIPLINES IN THE MTS:
EXPORT SUBSIDIES
Current disciplines
Progressive elimination of subsidies
contingent upon export performance,
which account for depressed
international prices and market
instability
Under negotiation
 Seeking commitments to eliminate
export subsidies
General consensus on a 2013
deadline for developed countries to
eliminate these subsidies, and a 2016
deadline for developing countries
STRATEGIC INTEREST OF EAC
REGION
Would guarantee stable international
prices for EAC agro-products, hence
increasing livelihoods
AGRICULTURAL DISCIPLINES IN THE MTS:
DOMESTIC SUPPORT
Current disciplines
Reduction commitments on domestic
support, except for responses to
special circumstances
Under negotiation
Further constrain domestic support
and leave flexibilities to developing
countries
“green box” measures (e.g. domestic
food aid) are not distorting, hence not
subject to tariff reduction
commitments
“blue box” measures (payments
under production-limiting
programmes) are not subject to tariff
reduction commitments
Proposed ceiling to avoid “box shifting”
“amber box” measures are distortive
and subject to tariff reductions
Members required to notify their
domestic support periodically to WTO
Enhanced monitoring and surveillance
mechanism for domestic support
THE COTTON ISSUE



Cotton issue has received specific attention in DDA.
Initially introduced by 4 cotton-dependent W.African
countries affected by heavily subsidised cotton
producers in developed countries
Current WTO negotiations aim to :
›
›
dramatically reduce these subsidies
STRATEGIC INTEREST OF EAC
provide development assistance
REGIONto LDCs dependent on
cotton
EAC countries are cotton producers
with great potential, and 4 would be
eligible for development assistance
AN INTRODUCTION TO EAD


MTS being an avenue for growth, development and poverty
reduction
EAC endowed with great potential in agriculture
THUS…

Strong need for an enabling environment that…
 Harness opportunities in MTS towards equitable
agriculture development
EAD
MTS
Trade
Opportunities
Enabling
Environment
EAD CONTINUED…

Equitable Agricultural Development entails:





Reformed international and regional trade
disciplines in agriculture;
Increased investment to improve productivity;
Redress of agriculture related trade facilitation
constraints;
Prioritizing capacity building of small and medium
sized farmers and traders;
Encouraging multi-stakeholder consultations and
coordination.
REAPING BENEFITS FROM THE
MULTILATERAL TRADING
SYSTEM…
…towards and enabling
environment for equitable
agricultural development
TOWARDS AN ENABLING ENVIRONMENT:
REFORMED INT. TRADE DISCIPLINES
 Further
reforms necessary for equitable
development;

Tightening of domestic support;

Elimination of export agricultural subsidies;

Meaningful market access (DFQF);

Enhanced monitoring and survaillance
mechanism
TOWARDS AN ENABLING ENVIRONMENT:
INVESTMENT OPPORTUNITIES & THE MTS


Increased market access and value added for EAC products will be
an incentive for investment in EAC agriculture, thereby improving
agricultural productivity
To ably harness new market opportunities, the EAC agriculture
sector will need:

Supporting policy measures

Sufficient resource allocation

Supportive business environment
 Investing in the great potential of the EAC region in ORGANIC
AGRICULTURE could contribute immensely to poverty
reduction
TOWARDS AN ENABLING ENVIRONMENT:
TRADE FACILITATION & THE MTS

Trade facilitation constraints hinder effective
participation in MTS, with factors such as:
› Trade infrastructure constraints (transport
networks, storage facilities etc.)
› Fragmented and imperfect markets
› Inefficient and cumbersome border procedures

Redressing these constraints will contribute to an
enabling environment towards EAD
TOWARDS AN ENABLING ENVIRONMENT:
REDRESSING TF CONSTRAINTS

A number of initiatives undertaken to redress these constraints in the
region include:
Initiative
Assessment
East Africa Trade and Transport  9% annual growth in goods traded at
Mombasa port
Facilitation Project (started 2006)
 Annual trade growth > 20% in Uganda
 Crossing Uganda-Kenya border is now
15 min (3-5 days before)
The North-South Corridor
Project (forthcoming)
 Will expand markets by linking Eastern
and Southern Africa
Standards & Trade Development
Facility (STDF)
 Better awareness and resources to meet
SPS requirements
 Specifically designed for trade
Other Aid for Trade and EIF
programs
facilitation
 AfT should be additional and access to
EIF funding less cumbersome
TOWARDS AN ENABLING ENVIRONMENT:
BUILDING STAKEHOLDERS’ CAPACITIES

Smallholder farming practices in most EAC

Agriculture a way of life for self-consumption rather than commercial

Need for capacity building for SMS farmers
 Capacity building needs of farmers and traders:
- More and better information about the potential of trade and
trading opportunities for them

- Training in better farming practices for improved productivity

- Information about rules and requirements to conform with
STAKEHOLDER INVOLVEMENT IN WTO
TRAININGS
Governments should select stakeholders
from all sectors to participate in Training
Workshops provided by the WTO
TOWARDS AN ENABLING ENVIRONMENT:
ENCOURAGING DIALOGUE

Multi-stakeholder consultative forums in policy-making
processes would ensure:

Reality-linked policies

Ownership by the society, leading to more effective
implementation

Trust-building and knowledge-sharing among and between
all stakeholder groups
EAC MULTI-STAKEHOLDER COORDINATION
MECHANISM would:
 Foster mutual learning about utilizing the
potential benefits of trade policy
 Facilitate better interactions between
national and international processes
SPECIFIC STAKEHOLDER CONSTRAINTS

Inefficient marketing systems and market availability

No access to financial services

Reliance on weather conditions

Poor quality extension services

Affordability of inputs

Poor infrastructure (transport, storage, irrigation, comm…)

Farmer capability

Policy frameworks and government actions
CONCLUSION

The MTS presents opportunities for EAD in the EAC
HOWEVER…

The constraints faced by the agro-sector need to be
redressed for the region to effectively harness the
opportunities
THANK YOU !
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