Nontariff barriers Africa faces : what did the Uruguay Round accomplish, and what remains to be done?

Abstract

Perhaps the major accomplishment of the Uruguay Round is agreements reached on nontariff barriers (NTBs). All NTBs imposed under the Multifiber Arrangement (MFA) will be phased out over 10 years, and all"voluntary"export restraints will be abolished. OECD countries'NTBs on agricultural goods will be converted to tariffs and then reduced by an average of 36 percent. Agreement was also reached on limiting subsidies and other agricultural export incentives. As a result, the profile of OECD nontariff protection Africa faces will change dramatically. Formerly, about 11 percent of all sub-Saharan Africa exports encountered NTBs; now this ratio will fall to about 2 percent. Formerly, 83 percent of Reunion's pre-Uruguay Round exports were affected by NTBs; now none will. Some African countries, however, will be largely unaffected by the Uruguay Round's accomplishments. No NTBs on energy products were liberalized so coverage ratios for Angola, Congo, ad Nigeria are still high - but the measures applied (largely quantitative restrictions and special import charges) apparently do not raise the cost of imports significantly. The exclusion of fish from the agreement on agriculture also limited the potential benefits to countries like the Seychelles. Others simply faced no (or few) nontariff restrictions before the negotiations. The new developments are regarded as positive for developing countries as a group, although some countries may incur losses. Trade in textiles and clothing has been closely regulated for three decades through MFA quotas. Phasing these restrictions out will subject African countries to aggressive international competition. Whether they can maintain a viable textile and clothing export sector depends on whether they can achieve reforms aimed at cost-cutting. The MFA liberalization is heavily backloaded, with roughly half the restrictions being removed at the end of 10 years, so there is ample time for adjustment. Africa should also face more vigorous competition on footwear and ferrous metals when"voluntary"restraints on some other developing countries are lifted. Any losses in market share that may occur, however, may not reflect welfare changes, especially if African exports were heavily subsidized. Agriculture could also be harmed unless appropriate domestic policies are adopted. The tariffication (and reduction) of NTBs, along with limits on export subsidies, could raise international prices on some staples, which would hurt net food importers. Reforms to ensure that prices paid to domestic producers increase in line with international prices (thus stimulating a local supply response) could limit increases in the food import bill. In the post-Uruguay Round world, it is increasingly important to remove domestic constraints that prevent local producers from taking full advantage of new export opportunities."Unfinished business"includes further initiatives needed to address NTBs on fish, chemicals and energy products which the Round bypassed. Stricter regulations on safeguards and the use of antidumping duties are also needed to ensure that these measures are not substituted for those eliminated. But much of the unfinished business involves domestic reform needed to ensure that African countries can react to new export opportunities and competitive challenges.Environmental Economics&Policies,Economic Theory&Research,Trade Policy,Agribusiness&Markets,Export Competitiveness,Economic Theory&Research,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Environmental Economics&Policies,Trade Policy,Agribusiness&Markets