> Pascal Lamy’s speeches
> Communique of the African Union trade ministers

Main points of the DG's presentation to African Union trade ministers, Addis Ababa, 20 March 2009

“Key issues for Africa's trade agenda in the current global economic crisis”

The WTO agenda in light of the economic crisis that started in the United States and that has now spread throughout the world can be summed up in six words: keep trade open, keep opening trade.

• Keeping trade open and pushing back protectionism is one of the easiest reactions to the current crisis. Opening trade offers hope for the future of world growth.

• IMF figures indicate global GDP will decrease by 1 to 2 per cent in 2009: this includes a drop of about 3 per cent for developed countries, which represent around two-thirds of the world economy, and growth of around 2 per cent for developing countries, which represent about one-third of the world economy.

• The WTO forecast for trade in 2009 will show the worst decline in 80 years.

• The impact of the crisis is much stronger in countries that depend more than average on trade, which is the case for many developing countries. African economies are more vulnerable than others. They are more dependent on trade with developed economies, where demand has severely contracted. The level of trade within Africa remains relatively low at around 10 per cent.

How does the global picture translate into the WTO agenda?

Substance

1. Pushing back protectionism

• WTO members should resist the pressure to undertake protectionist measures.

• G20 members have committed not to take trade-restrictive and investment-restrictive measures.

• The WTO will continue monitoring and peer reviewing the development of protectionist measures. The second surveillance report will be more sombre than that issued in January 2009.

2. Pushing towards concluding the Doha Development Round

• 80 per cent of the work is already done. The remaining 20 per cent needs political energy. Members should build on the progress meade in the seven years of negotiations.

• Concluding the Doha Round will give a strong signal of the collective readiness to address the global economic crisis and contribute to addressing economic difficulties in many developing countries.

3. Oiling the wheels of trade finance

• One reason for trade contraction is the decline in liquidity for trade finance and the increase in the cost of the risk.

• Around 90 per cent of world trade requires trade finance.

• The key is to encourage public financial institutions to back commercial banks' trade finance activities.

• Regional development banks, including the African Development Bank, are already engaged very actively.

4. Securing Aid for Trade: building long-term competitiveness

• There has been good progress on coordinating Aid for Trade projects and on identifying priority sectors.

• There has been a 20 per cent growth in Aid for Trade flows since 2006.

• Donors must be pressed to abide by their previous commitments. The current crisis makes this even more important.

Process

1. G20 meeting in April 2009

• The WTO is actively contributing towards the preparation of the trade part of the G20 agenda.

• Africa will be better represented than last year, with South Africa, the Ethiopian Prime Minister (Chair of the New Partnership for Africa's Development) and the African Union Commission Chairman.

• A clear message on trade needs to be sent to the G20. African countries must engage in the coming two weeks.

2. Post G20

• There needs to be increased ministerial engagement towards the conclusion of the Doha Round.

• Technical work is ongoing in Geneva. Members are waiting to see when the US will be ready to engage at the political level.

3. Aid for Trade Global Review on 6 and 7 July 2009

• The Global Review will be preceded by regional reviews. The first will take place in Lusaka (Zambia) on 6 and 7 April 2009. It should be complemented by another regional review for western Africa.

• The implementation of commitments, monitoring and evaluation will be the main themes on the agenda.

4. Conclusion

It is important to mobilize so that trade contraction does not harm African countries. Avoiding the risk of protectionism is worth the fight.

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