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Interview  (Posted 27th Oct, 2001) Tell your friends about this page! Email it to them.

Rita Whitaker, United States Assistant Trade Representative for Africa visited Nigeria last week to discuss trade relations between her country and Nigeria and the World Trade Organisation agenda for Africa.

Text of Interview

On why we are here.

We believe the new round of WTO trade negotiations is critically important for Africa. So we came here to make clear out commitment to the bridging of the world. We came here to debunk the many myths about the WTO. One, Africa is the only region of the world that is getting poor. Africa now has over 290 million people living on less than a 5 dollars a day. That is morally and economically unsustainable and unacceptable, We see this region of the world Africa would need $100 billion in new investment every year just to address poverty. It would need $5 - $6 billion every year just to address the HIV/AIDS crisis. Now does it generate that kind of equity capital. We see the primary difficulty is trade and investment expansion in the global economy.

And no region in the world has generated that kind of capital as development assistance or foreign assistance. Foreign assistance is actually declining. More of the capital flows into the developing world are actually taken in the form of trade and investment.

So we are going to engage and task government officials of these countries (Africa) to see dialogue about how we can work within the WHO to see that African countries get the greatest share. We see the WHO as critical for African countries in a multilateral trading system. You also have to understand that if you want to catch $100 billion every year in trade investment you can't do it on the margins of he global economy. You have to move from the margin to the mainstream of the global economy. And that is what we think the WTO agenda is all about. We have converged, for the first time in history the positions of the African countries in the WTO.

African observers have argued that the WTO is to advance the interest of the West and not that of African countries.

One of the reasons why we are here is to debunk a lot of myths about the World Trade Organisation, WTO. And most Africa countries are in support of the new round of global trade negotiations because if you want to talk about trade expansion, how could you do this without been part of the system. How can you talk of strengthening the prospects for African farmers and farm exports without having a rules based system, without negotiating the reduction in export subsidies and levies by the developed countries? Also when we look at the WTO apparently the argument of the WTO decimating local industries. That is not the intent of the WTO. The intent of the WTO is to have a predictable rules-based system for American trade. And there are now a lot of mechanisms within the WTO that African countries can afford themselves, known as trade remedies. So there are mechanisms within the WTO. So within the context of the WTO we are encouraging countries to develop domestic laws that do not do it in a consistent and uniform fashion. So one of the problems I know of, for example in an African country, they had a problem of an Asian country dumping silo gags into their economy and this decimated their local industry. Now is that a problem with the WTO? No I don't think so, What the country tried to do was to bring the case to the WTO. But you can't bring it to the WTO except you have domestic WTO - consistent laws to prevent dumping.

So what that tells me is that the country did not fully avail themselves through the mechanisms within the WTO to support domestic industries and to support growth.

In terms of the African Growth and Opportunity Act, AGOA we are encouraging Subaharan African countries access to our markets with zero - duty products without asking African countries to do the same. We understand that African countries need special and preferential treatment in the WTO and that is something we are working out too. But membership (of WTO) is absolutely critical and I don't know any other mechanisms that would allow African countries to get the kind of capital they want to get without been part of the global economy.

Now, some of the reasons, why national economies in Africa have not prospered has very little to do with the WTO and a lot to do with the national policies and I recall my boss saying 'money is a coward, it does not go where it has fears.' So if you don't mechanisms nationally to have market oriented mechanisms to attract and continue to attract investments, you are not going to get the capital that you need. And I say high tariffs are a disincentive for growth. It has been proven throughout the world. Within the mechanism of the WTO there is a way to go, expand trade and support your local industries in an equitable fashion. What we find is that when you open up trade domestic industries also become more competitive.

Also it is a consumer issue. High tariffs is really a tax on consumers. In the US we have one of the most least-expensive apparels in the world and that is because we have opened up the economy to imports and the competition helps to keep the prices at a reasonable level. It is certainly no different here in Nigeria. If you don't open up you are going to have to pay higher prices for your products. The thing with the WTO is that everyone knows the rules, and everyone abides by the rules.

Let me add that I applaud the commitment this administration (Obasanjo) has demonstrated to trade and investment expansion. I am fully confident about the president (Obasanjo's) commitment and leadership here. Nigeria is getting out of some of the tough spots because of the long years of military rule. But the government is doing its level best to accelerate action. And as I said, America is its friend in this process.

You talked about opening up trade and imports are you now saying that African countries, should start importing more from the Western world?

I am not suggesting that African countries should import more from - the outside world. But I am suggesting is that the economies which opened up in terms of imports and exports grow faster. Because even, for example, how do you attract investment for exporting. You need to have import and export to promote that investment. You need to bring in equipment. If in Nigeria you want to make apparel then you have to pay high tariffs to bring in equipment that also adds to the cost which makes it not an attractive place to do business.

What has been happening through the AGOA is that most of the trade, and most of the jobs expansion have occurred through joint ventures. Where you would have American or Asian partners come and join with the local partner in Africa and both of them can bring quality control, capital and access to larger market. And so its really two-way street. Protected markets, protected economies do not grow as fast. And I think it has been proven time and time again, it really does not work (protection.) There is a way to open your market while supporting your domestic industries. And this is a kind of balance that must be struck in order to move forward and in order to grow the economy.

The US is currently trying to build a worldwide coalition against terrorism. It has also asking for reforms in our economy, how can it, help us to grow our economy?

If I understand your question well you are saying that peace and security is predicated on a modicum of economic prosperity and we would agree. We take very seriously the issue of poverty alleviation. We look at poverty alleviation through out the world - what has been the most effective mechanism to mitigate poverty? It has been trade and investment expansion. When we look at where Nigeria is, and when the Asian economies are. In the 60's,  at independence, Nigeria's economy surpassed that of the Asian economies. Then you have to ask yourself what happened. Those economies they opened up. We are not pushing Nigeria to do anything that is not in its interest to do. I am yet to see any country in the world that has grown economically with high tariff, without a lot of focus on private sector development, a lot strategy of diversifying and expanding trade.

So when we talk about economic reforms, we are talking about reforms that would strengthen your own private sector, strengthen you own ability to trade, that would allow your companies to bring in duty-free, the products they need to economically expand their production. Reforms that would give you access to a larger set of opportunities in the market in the market.

So this is not a US proposition, these are methods that have worked through out the world.


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