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GTAP Resource #2016

"Integrating West African Agriculture into the Global Trading System: Issues in Regional and Multilateral Trade Negotiation"
by Ogunkola, Olawale

This paper examines issues in the West African Agriculture in the context of the on going negotiations in the Doha development agenda (DDA) under the auspices of the World Trade Organization (WTO) and the Economic Partnership Agreement between West Africa and the European Union (EU). The paper employs data at finest level of disaggregation with a view to be inclusive and to guide country and regional negotiators in terms of priority for the sector in the negotiations.
Against the background of reducing distortions associated with the production and trade in the sector and the need for the developments in the sector to positively impact on the poverty of the region, these negotiations have promised to contribute positively to development of the region. However, for the negotiations to impact on the poverty of the region, there is the need to for the negotiators to direct the negotiations to critical areas for optimum effect to be realized. More importantly there is a greater need for complementary policy reform.
An examination of the production, import and export structure and trends of West African agriculture reveals
• That growth performance of the sector has been sluggish in most of the West African countries; barely sufficient to meet the population growth rate of the countries in the region.
• the binding constraints to better performance of the sector include production technology and other constraints that cannot be addressed solely by trade policy reform.
• Food import dominated total import of the region and most of the West African agricultural import products from the EU are classified in the EU as “sensitive products” and hence they are usually characterized by barriers that are usually excluded from liberalization. Without offensive strategy the EU will still exclude these products from negotiations in the EPA as well as in the DDA.
• While the West Africa imports are mainly processed food, the exports are mainly raw agricultural products especially cocoa beans, cotton, and tropical fruits and vegetables. The dependency of these countries on the agricultural exports is as high as 94 per cent of total exports in Burkina Faso. When this is measured as share in GDP, agricultural trade accounted for more than 5 per cent of GDP in some countries (Cote d’Ivoire, Ghana, Mali, and Togo).
An analysis of the direction of West African agricultural trade shows that the EU is the major destination. This picture at the aggregate level conceals differences at commodity level. For example, the destination of West African cotton is China and other East Asian countries. In any case apart from the EU and China, other countries such as the USA, Japan and Canada featured prominently as West Africa market for agricultural products.
Analysis of the market barriers in these markets shows that
• Most countries in the region have preferential market access to this market. While that of the EU is defined by the Lome Conventions, the Africa Growth Opportunity Act (AGOA) is the framework for the preferential market access for these countries in the USA, Canada offers “Commonwealth Pacific Tariffs” which are relevant for some countries in the region. Japan also has two Generalized System of Preference (GSP) while one of them is general the other one is specific to Least Developed Countries of which thirteen countries in the region are potential beneficiaries.

• MFN tariff liberalization in the EU and other markets will erode these limited preference margins for West African exports either in the short-run or in the long-run. Perhaps, the best strategy is to delay the preference erosion with a view to use the intervening period to develop the capacity of the relevant sectors and prepare them for global competition when there will be no preferential treatment.

• While tariff measures are low in some of these markets, the incidence of non-tariff measures in the EU is as high as 50 percent. More importantly these non-tariff measures imposed some challenges on West African countries especially in meeting those requirement

Resource Details (Export Citation) GTAP Keywords
Category: 2006 Conference Paper
Status: Published
By/In: Presented at the 9th Annual Conference on Global Economic Analysis, Addis Ababa, Ethiopia
Created: Ogunkola, O. (4/29/2006)
Updated: Batta, G. (5/3/2006)
Visits: 2,784
No keywords have been specified.

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