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MANAGING THE CHALLENGES OF WTO PARTICIPATION: CASE STUDY 41

Uganda’s Participation in WTO Negotiations: Institutional Challenges

Nichodemus Rudaheranwa and Vernetta Barungi Atingi-Ego*

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Opinions expressed in the case studies and any errors or omissions therein are the responsibility of their authors and not of the editors of this volume or of the institutions with which they are affiliated. The authors of the case studies wish to disassociate the institutions with which they are associated from opinions expressed in the case studies and from any errors or omission therein.

Case Studies main page
Introduction

   

ON THIS PAGE: 
I. Consultation processes in Uganda for trade negotiations
II. The challenges of participation in WTO trade negotiations
> III. The way forward
> Annex I
> Bibliography
 


Uganda is heavily reliant on agricultural activities — in large part dominated by smallholder farmers — and is a key player in regional integration, bilateral and international negotiations as developments in the multilateral trading system continue to evolve rapidly. Uganda is a founding member of the WTO, and a party to the African, Caribbean and Pacific countries (ACP)-European Union (EU) Cotonou Agreement, the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) Customs Union and, most recently, the African Growth and Opportunities Act (AGOA) and ‘Everything but Arms’ (EBA) initiatives. Uganda actively participates in these multilateral and bilateral trade initiatives, which carry with them new opportunities and challenges. The effective use of these trade initiatives depends very much on how Uganda prepares for (and effectively participates in) the negotiation process in order to articulate and defend its interests. This is possible if preparations for (and the conduct of) the trade negotiations are well structured, co-ordinated and include all stakeholders, namely the government, the private sector, civil society and academia.

Trade negotiations vary in scope and content but generally depend on the structure of the economy of a particular country. Uganda, like many other developing countries, is trying to diversify away from traditional exports; the trade negotiations in which it is involved are therefore aimed at securing markets for new products (namely tea, tobacco and cotton), in addition to markets for the traditional exports. Trade negotiations are also aimed at obtaining the co-operation of trading partners on the technical and financial assistance required to meet market preferences and to comply with health and technical standards as well as other customs or entry requirements. In the broader context of development support, negotiations can also be targeted at obtaining assistance to developing countries such as Uganda to address production and supply constraints, so as to develop fully and increase their production potential for both domestic and export markets.

An effective trade policy framework requires the formulation of trade policy and strategy, the preparation and execution of negotiating strategies, the implementation of agreements, and the monitoring and evaluation of policies and agreements. This short study attempts to identify Uganda’s current capacity to prepare for, and participate in, WTO trade negotiations. It considers the processes taking place on national, regional and international levels and how they affect the formulation and co-ordination of Uganda’s participation in trade negotiations. This study is expected to contribute to a better understanding of the country’s trade capacity and its ability to co-ordinate and participate in trade development negotiations. Policy actions to improve and strengthen capacity among various stakeholders and the development of a sound trade policy in Uganda are suggested.

  
  

I. Consultation processes in Uganda for trade negotiations    back to top

Consultations are important for formulating and executing an effective trade policy, negotiating effectively, implementing trade agreements, meeting ongoing trade obligations and defending the country’s trade-related rights (OECD 2003: 32). The consultation process helps to ensure that Uganda’s negotiating position is realistic and pragmatic. Uganda’s share in global trade is small and cannot, therefore, influence the final outcome of trade negotiations; however, the quality of the information obtained in the consultation process could be of significant value in informing the country’s negotiating position. The consultation process ensures that a country’s position covers all areas and allows for an open and transparent exchange of ideas among stakeholders.

The consultation process often has a number of objectives, including but not limited to (i) seeking the views of stakeholders on how the negotiations could help their various constituencies in achieving their goals; (ii) building consensus among stakeholders on key current and emerging issues affecting the country’s negotiating position; and (iii) keeping stakeholders informed of the country’s negotiating positions as they are being developed. Interest-based discussions provide stakeholders with an opportunity to discuss their needs, desires, concerns and fears, and provide the potential for greater creativity and consensus on common goals.

Uganda’s preparation and participation in WTO trade negotiations take place at WTO meetings abroad (most often in Geneva) or in the capital, Kampala, where the lead ministries on WTO issues are to be found, as well as the various domestic stakeholder institutions in the private sector, academia and among civil society groups. A link has been established between representatives taking part in the negotiations abroad and ministry officials and support institutions in the capital. The latter are expected to provide timely information in support of the negotiating positions adopted, to enable Uganda’s representatives in Geneva, or elsewhere abroad, to argue the country’s positions. The support groups are briefed on the twists and turns of the negotiations and are expected to provide feedback and input to the negotiators regarding the way forward.

The process of preparing for trade negotiations in Uganda is largely a consultative process co-ordinated by the Inter-institutional Trade Committee (IITC), which includes government institutions, the private sector, academia and civil society organizations.(1) The IITC is a broad-based national body that formulates trade policy and negotiating positions for Uganda; its members are expected to present the views of the constituencies they represent. The Ministry of Tourism, Trade and Industry (MTTI), which chairs the IITC and acts as its secretariat, is the chief government negotiator. It co-ordinates the negotiation process by consulting stakeholders during the formulation of the country’s negotiating positions, linking stakeholders with the government (before, during and after the negotiations), and articulating and defending Uganda’s interests during the negotiation process. The MTTI is also responsible for the implementation of the WTO Agreements.

The way in which consultations are structured and co-ordinated, however, is as important as the seriousness with which the stakeholders regard the process; participants should represent the views of their constituencies faithfully and ensure that the consultations serve to inform the trade policy process. The key objective of the stakeholder consultations in Uganda is to reach a consensus on national development goals and the means available to achieve them, as well as to refine the negotiations strategy in response to progress and changing circumstances in the negotiations. To get a sense of the actual preparation and development of the negotiation process in Uganda, views on this were sought from stakeholders using structured interviews and focused group discussion. The following section presents the challenges for trade negotiations by Uganda as identified through these interviews.

 
 

II. The challenges of participation in WTO trade negotiations    back to top

As noted above, the MTTI is mandated to co-ordinate trade matters including the preparation and co-ordination of negotiations, representing Uganda in the negotiation process, and the implementation of agreements. Its mandate was defined in the 1995 Constitution of the Republic of Uganda. Other government ministries, specifically those of Finance, Planning and Economic Development (MFPED), Foreign Affairs (MOFA), Agriculture, Animal Industry and Fisheries (MAAIF), and Justice and Constitutional Affairs are also key players in the negotiation process.

The country’s preparation and participation in regional and multilateral trade negotiations faces a number of challenges. The first of these is that the IITC is not yet formally established, which makes it difficult to obtain government funding for its activities. Consequently, most of its activities are donor-funded, while others are covered by the MTTI’s budget (Mugyenyi and Nuwamanya 2003; Mangeni 2004).

However, efforts are under way to get the IITC formally established, and it is envisaged that it will be Uganda’s representative body in all trade negotiations. The IITC has a core team of specialists whose daily activity brings them in contact with trade issues. This core team is mandated to speak on behalf of the government and attends negotiations, while the larger grouping provides the backup. This arrangement is expected to introduce a degree of homogeneity in the positions of government ministries and departments and among trade organizations. However, inadequate negotiating skills, low technical expertise and limited funding for trips to participate in the trade negotiation are obstacles to the implementation of this strategy.

Trade negotiations at the WTO take place between governments, so that non-government IITC members are not involved in the actual processes. Nevertheless, the views of non-government members as expressed in the IITC are expected to form an integral part of national positions. A number of IITC stakeholders we interviewed felt that their contribution had a substantial influence on Uganda’s position in trade negotiations.(2)

Essentially, the process for collecting these inputs into the negotiations is as follows. The MTTI liaises with stakeholders to collect their views, which are then used by technical staff in the ministry to compile cabinet papers; these are then presented to the cabinet by the MTTI. It is on the basis of this process that cabinet comes up with national positions for trade negotiations. After this, the MTTI goes on to present, articulate and defend Uganda’s negotiating positions in the various negotiating fora.

For any country to participate effectively in trade negotiations, it needs to have sufficient numbers of technically trained members of staff and negotiators. In the case of Uganda, they are members of the Ugandan missions to the WTO in Geneva and to the EU and ACP in Brussels. Uganda’s missions are insufficiently staffed so that capital-based negotiators regularly participate in negotiations in Geneva, especially when a topic of interest to Uganda is on the agenda.(3) Capital-based negotiators are kept abreast of developments at the WTO through the local mission and through direct contacts with the WTO Secretariat. In addition, the Secretariat circulates to WTO members documents concerning the trade regimes of the various Members, documents on notifications, etc., which helps the capital-based negotiators formulate negotiating positions. Bilateral negotiations (within the framework of the WTO) are conducted through a series of requests and offers. These requests and offers are sent to the Ministry of Tourism, Trade and Industry, which then co-ordinates with stakeholders. Field interviews show that technical expertise in formulating these requests and offers is lacking in the relevant ministries, as well as in private-sector and civil society participants in the process.

The MOFA has tended to concentrate on political affairs, while MTTI has focused on trade affairs; the MOFA does not have a library with reference material for ongoing trade negotiations. The reference centre for the WTO, located in the MTTI, contains publications and online documentation. It is, however, unsustainable because it was established and run by the Uganda Programme for Trade Opportunities and Policy (UPTOP) and the Joint Integrated Technical Assistance Programme (JITAP) for African LDCs, among others, and does not have a specific budgetary allocation within the ministry’s budget. It ceases operations in 2005.

Trade negotiations are a give-and-take exercise and even the best negotiator can hardly achieve 100 per cent of his or her negotiating targets. Numerous positions have to be formulated as one prepares for negotiations, and regular consultations have to be undertaken even during the negotiation process. The IITC is regularly updated on the progress of trade negotiations and invited to provide feedback. Any new ideas which may emerge need to go through the same procedure (i.e. endorsement by cabinet) before they are validated as national negotiating positions. Information obtained from interviews, however, indicates that the mechanism of providing feedback is inadequate, since representatives do not consult members of their institutions before providing feedback to ITTC, because they have insufficient time for consultations, too little background information, often provided too late, and not enough in the way of analysis, synthesis and briefing papers. Hence some important views are left out.

An additional challenge is that, despite the fact that the IITC plays a crucial role in trade negotiations, the knowledge base of most IITC members on the multilateral trading system and trade negotiations is very weak.(4) This means that they cannot adequately help in formulating national negotiating positions. Consequently, technical staff in MTTI are obliged to examine carefully any suggestions put forward by the IITC and put them in context before they go ahead to draft national positions for cabinet approval. It is in the light of this that plans are under way to conduct briefings regularly to inform members of the IITC. Technical assistance in the form of training for IITC members has also been sought from the WTO (e.g. the recently concluded video conferences on negotiations on non-agricultural market access, trade in services and agriculture, and the workshop on trade in services).

Trade negotiations involve a number of disciplines including economics and law. It is in this context that other factors, such as social issues, are taken into account in the negotiations. Uganda has no specialists in international trade law,(5) so that the country’s negotiating team is largely composed of trade economists; this means that the legal implications of certain agreements may not be duly taken into consideration during the negotiations. This probably explains why it has taken such a long time for WTO agreements to be introduced into national laws; for example, the WTO Implementation Bill has remained a bill since 2000 (see WTO 2001).

Given the country’s weak negotiating capacity, Uganda has recently tended to team up with several other countries to try to make its voice heard through the decision-making process in the WTO, where it is possible for Uganda to block any measure that it considers to be against its interests (decision-making at the WTO is by consensus).(6) Uganda’s negotiators are, in most cases, not adequately funded and facilitated by the government. Often donors, including some involved in negotiations, assist the country’s negotiators, and the potential dangers associated with this arrangement are obvious. For example, the donors may (intentionally or otherwise) book a flight ticket in such a way that at the time of making important decisions, an opposing negotiator is on his/her way out of the capital hosting trade talks. A combination of its limited share in global trade and inadequate support for its trade negotiators undermines Uganda’s capacity to pursue national interests in trade negotiations.

A number of meetings are held on a regular basis under the auspices of the WTO. While Uganda’s permanent representative at the WTO attends some of these meetings, since several may take place simultaneously it is impossible for the small Ugandan mission to attend them all. This is a problem for most African countries, and is worse for those who do not have a mission in Geneva but must have meetings covered by representatives stationed in Brussels or elsewhere in Europe. To address this problem, African representatives in Geneva share responsibilities and attend different meetings and then meet and brief each other and formulate the way forward in consultation with their capitals (note the advantage of negotiating as a bloc). In the case of Uganda, the MTTI is in constant contact with the Geneva mission, and the Geneva- and capital-based negotiators regularly meet either in Geneva, Brussels or Kampala or at any other trade negotiations venue.

  
  

III. The way forward    back to top

Trade negotiations are an integral part of international and national development strategies. The capacity to prepare adequately for such negotiations and the level and manner of participation have an important bearing on the outcome of trade negotiations for any economy. It is not the trade negotiation per se that can drive an economy to development, but rather the post-negotiation handling or adjustments that are made to take advantage of the opportunities created by negotiations. For example, all the WTO agreements have longer transition periods for, and give special and differential treatment to, LDCs. However, most LDCs, including Uganda, seem not to have taken full advantage of, or benefited from, these opportunities. This is largely attributable to the failure of these countries to reorient national policies in a direction that can help them tap the opportunities arising from trade negotiations, such as tariff cuts under the Uruguay Round, the use of subsidies in one of the boxes (specifically, the green box) under the Agreement on Agriculture, and so forth.

Uganda’s current Poverty Eradication Action Plan (PEAP), for example, does not have trade issues as a priority so as to tap trade opportunities created by the Uruguay Round. Tapping these opportunities had not been a national priority since the first PEAP was developed in 1997. Only in the recently concluded PEAP revision exercise of 2003/2004 were trade issues included in national development plans. The way forward is for Uganda to prepare its development policies in such a way as to enable the country to benefit from the trade opportunities arising from numerous trade negotiations. Mainstreaming trade development strategies in the overall national development policy framework, a process that has just begun, should be strengthened.

The government’s handling of trade negotiations is still wanting. This could partly be due to the fact that trade issues have not yet been placed at the centre of national development objectives. It is important that the government views trade negotiations as an important development tool in which it needs to invest. There is a need to provide technical expertise in missions to trade bodies so the members of such missions can handle a number of issues at the same time, while also co-ordinating in time with the ministry (MTTI).

The government needs to fund its own negotiators so that their capacity and the attention paid to negotiations are not compromised. Foreign-funded and facilitated negotiators affect the preparation process: if the funding body delays confirmation of funding, the negotiator has the uncertainty of not knowing whether he or she will be able to attend the negotiations.

The diverse composition of the IITC is good for the consultation process, but the knowledge base of the members is still wanting. It is imperative that they are trained in trade issues, specifically on the multilateral trading system, so that they can adequately push for the interests of their constituents and properly advise government during the consultation phase in preparation for trade negotiations.

The need also exists for increasing awareness of the importance of WTO negotiations among stakeholders, particularly the private sector and civil society. Manufacturing and farmers’ associations (e.g. the Uganda Manufacturers’ Association) could be targeted in the process of raising awareness. Stakeholders should be well informed as to WTO requirements and their implications, so as to obtain a good understanding of the negotiation process.

  
  

Annex I    back to top

Table 1:
Uganda’s current Inter-Institutional Trade Committee membership

Institution

Number of representatives

Government ministries (6)
Tourism, Trade and Industry 6
Finance, Planning and Economic Development 2
Foreign Affairs 1
Health 1
Agriculture, Animal Industry and Fisheries 2
Justice and Constitutional Affairs 1
Government departments (10)
Exports Promotion Board 2
National Bureau of Standards 2
Revenue Authority 2
Law Reform Commission 1
Bank of Uganda 1
Investment Authority 1
National Agricultural Research Organisation 1
National Environmental Management Authority 1
Civil Aviation Authority 1
President’s Office 1
Academic institutions (4)  
Law Development Centre 1
Makerere University Business School 1
Economic Policy Research Centre 1
Makerere University Faculty of Law 1
NGOs (6)
Actionaid Uganda 1
ACODE 1
DENIVA 1
SEATINI 1
Food Rights Alliance 1
Uganda Consumer Protection Association 1
Trade associations (8)
Uganda National Farmers Federation 1
Private Sector Foundation Uganda 2
Uganda Manufacturers Association 1
Uganda National Chamber of Commerce and Industry 1
Uganda Fish Processors and Exporters Association 2
Uganda Services Exporters Association 1
Uganda Clearers and Forwarders Association 1
Uganda Law Society 1
Total public-sector institutions: 16 Total 44
Total private-sector institutions: 17  
Overall total: 33  

Source: Adapted from Mangeni (2004).

  
  

Bibliography    back to top

Kasekende, L. A., C. Abuka and P. K Asea (1998), ‘Trade Policy, Manufacturing Efficiency and Exports in Uganda’, unpublished report for African Centre for Economic Growth, Nairobi
 
Mangeni, F. (2004), ‘The Challenges of Multilateral and Regional Trade Negotiations for African Countries’, mimeo, Kampala
 
Maxwell Stamp (2003), ‘Review of Trade Policy Institutions and Capacity’, draft report for consultation prepared for Ministry of Tourism, Trade and Industry, Kampala
 
Morrissey, O. and N. Rudaheranwa (1998), ‘Ugandan Trade Policy and Export Performance in the 1990s’, CREDIT Research Paper 98/12, University of Nottingham
 
Mugenyi, O. and Nuwamanya D. (2003), ‘Challenges for Enhancing the Role of Non-State Actors’, ACODE Policy Research Series No. 7
 
OECD (2003), ‘The DAC guidelines: Strengthening Trade Capacity for Development, International Development’, available at www.SourceOECD.org.
 
Republic of Uganda, Background to the Budget (various issues), Kampala: Ministry of Finance, Planning and Economic Development
 
Republic of Uganda, Statistical Abstract (various issues), Entebbe: Uganda Bureau of Statistics
 
UNCTAD (2003), FDI in Landlocked Developing Countries at a Glance, New York: United Nations
 
WTO (1995, 2001), Trade Policy Review: Uganda, Geneva: WTO

  
  

NOTES:
1.- Six government ministries participate in the IITC. Other participants include representatives from the private sector, academic institutions, NGOs and eight trade associations (see Annex I for the current composition of the IITC). back to text
2.- According to a number of those we interviewed, the major problem (beyond limited capacity and awareness) has been political influence on making the final decision during the negotiation process. back to text
3.- Even this arrangement is not adequate. The MTTI has only five officers based in Kampala covering the entire WTO as well as other organizations. There are a few other officials who have also been trained in WTO issues, however; although they do not handle WTO issues on a daily basis they are called upon in case of need. MOFA maintains two officers in Geneva to cover the WTO and all other Geneva-based international organizations, but there are no specific trade officers. Trade officers are maintained in MTTI, since it is mandated to handle trade issues. The MTTI and MOFA work closely together. back to text
4.- One government ministry official was of the view that some suggestions from some sections of IITC sound too radical, with little of the flexibility essential in the negotiation process. back to text
5.- There is only one known specialist in this area (a trade lawyer) in Uganda. back to text
6.- See Art. IX of the WTO Agreement. A footnote to the article says, ‘the body concerned shall be deemed to have decided by consensus on a matter submitted for its consideration, if no Member, present at the meeting when the decision is taken, formally objects to the proposed decision’. back to text
 

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* Research Officers, Economic Policy Research Centre (EPRC), Kampala. Any matters regarding this paper should be addressed to Nichodemus Rudaheranwa. We are very grateful to all those representing institutions in the IITC and others who took the time to respond to our interview questions. Views expressed in this paper, however, are entirely our responsibility.