Dr Ngozi Okonjo-Iweala, the Director General of World Trade Organisation during the conference in Abu Dhabi in February this year.  PHOTO/ courtesy


Uganda’s wins, losses at World Trade meeting

What you need to know:

Uganda's recent redesignation as a low-medium country while welcome, means after three years, Uganda will no longer qualify for special support measures targeting the LDCs at the World Trade Organisation.

The World Trade Organisation (WTO) has since become a place that promises so much but delivers so little or even nothing at all, especially for the Least Developed Countries (LDC) where Uganda and 44 other economies are categorised, Prosper Magazine has learnt. 

There are currently 45 economies, including Uganda, designated by the United Nations as LDCs, entitling them to concessions such as preferential market access, capacity-building including on technology and even aid.

However, the global international Organisation tasked with dealing with the rules of trade between nations with a goal to ensure that trade flows as “smoothly, predictably and freely as possible” is increasingly operating parallel to its intention, according to Our World is Not for Sale Network.

 According the loose grouping of organisations and social movements worldwide committed to advocate for sustainable, socially just, democratic and accountable multilateral trading system, worked with more than 50 civil society representatives at MC13 including farmers, coming from 21 countries with Uganda being one them, the concluded 13th Ministerial Conference (MC13) held in Abu Dhabi, just like the previous ones, ended in paralysis.

This because it failed to address the multiple economic, climate, and food crises facing billions of the world’s people majority of whom are domiciled in LDCs where Uganda falls.

“This Ministerial conference should have addressed developing countries’ urgent proposals for flexibilities from onerous WTO rules so that they can use trade for development and engage in industrial policies for structural transformation, and ensure food security through public stockholding.

“These mandated issues could have delivered for poorer countries and workers worldwide who have paid the price for the WTO’s harmful neoliberal rules. 

“Instead, developed countries tried to use the MC13 to remake and expand the WTO to serve their corporate interests even further,” reads in part a statement by Our World is Not for Sale Network.

The recently concluded MC13 simply epitomised what member countries categorised as LDC – Uganda being one of them, suffering in the hands of the ‘big boys’ whose influence shapes the agenda of the meeting or takes the day with the beneficiaries often times being the big corporations.

Ugandan delegates follow proceedings during the World Trade Organisation conference in February. PHOTO/ COURTESY

Treaty and negotiation expert, Mr Africa Kiiza, describes the outcome of the meeting as little to write home about.

In his analysis of the meeting, he writes: “The MC13 of WTO ended on Saturday morning, 2nd March 2024 at 12:45 am, in Abu Dhabi, United Arab Emirates, with not much to celebrate in Africa in general and Uganda in particular.”

Mr Kiiza who is also a researcher and currently a PhD Fellow, Faculty of Business, Economics and Social Sciences; Universität Hamburg, notes that his assessment was also informed by the pre-WTO MC 13 initial demands of the Africa group of which Uganda is a member.

Demand and division
The key demands included the necessity to preserve policy space for industrial development, rebalancing trade rules to promote industrialisation and structural economic transformation, and rethinking premature tariff liberalisation on environmental goods and services associated with green transition, as Africa has to build her requisite capacity and comparative advantages.

Concerning specific issues, Africa was divided on the extension of the moratorium on imposing customs duties on electronic transmissions.  Some like South Africa wanted an end to the moratorium because its extension would lead to revenue loss for Africa estimated by UNCTAD to be $2.6 billion annually, and would undermine efforts by African countries to build their digital industrial economies.

Uganda was in favour of the continuation of the moratorium because this would lead to boosting digital trade in Africa.
On the issue of Investment Facilitation for Development, again Africa was divided.

Countries like South Africa, Botswana, Rwanda, Tanzania and Namibia were against the adoption of the agreement noting that this is not a WTO issue and discussing it would bring into the fold of the WTO non-mandated and non-multilateral issues in violation of the consensus-based decision-making for starting a negotiation. In other words, this was supposed to be at exploratory level not negotiations.

Again, Uganda was in support of the agreement as this was perceived to facilitate the promotion of much-needed Foreign Direct Investments (FDIs).

Pressing but ignored issues
Other key issues of concern, according to Mr Kiiza analysis, included the need for the WTO to support the smooth transition support measures for countries that have graduated from the Least Developed Countries (LDCs) category; granting greater flexibility in using public stockholding by allowing governments to buy and store food reserves to ensure food availability and price stability during emergencies without facing trade penalties.

The need to allow developing countries like Uganda to temporarily raise tariffs on agricultural imports to protect their farmers from import surges through special safeguard mechanisms; and the call for WTO reforms that should address the decade-old imbalances in the multilateral trading system were the other leading concerns that deserved attention. But never got it.

“After five days of intense negotiations, there was no deal on agriculture after all the push from Africa in general and Uganda in particular,” reads Mr Kiiza analysis in part. 

There are three pillars that the Doha work programme was supposed to address to discipline the distortions in the agricultural trade, namely domestic support, market access and export competition such as export subsidies and export credit among other things.

“Of all these, the most important pillar that wreaks havoc on developing countries is domestic support. That unfortunately would continue as there was no deal on this pillar,” reads the analysis.

Dispute settlement
On dispute settlement mechanisms, trade experts say there was no movement yet this body is important for resolving trade and related disputes between or amongst members. 

“This body is not fully constituted in terms of human resource. So, one key lesson for East Africa is the need for a strong resolution and settlement mechanism in case of misunderstanding,” said Ms Jane Nalunga, expert in areas of multilateral agreement, treaty negotiation, and trade and investment policies.

Ms Nalunga made this statement last week during an engagement organised by SEATINI and Ministry of Trade.

Some wins
It looks like it was not all doom and gloom. 
In terms of key wins, the WTO MC 13 recorded successful pushback by blocking the Investment Facilitation Agreement for Development (IFAD). Key to note is that beneath the fancy title of the agreement is a mask for corporate control of African economies. 

Analysts such as Sylvester Bagooro of the Africa Trade Network, challenged attempts to portray this agreement as pro-development, saying: “There are no genuine development provisions in the Agreement,” adding that: “In fact, it is the reverse of special and differential treatment. The burden of extensive implementation and notification requirements will fall on developing country governments.”

Other voices in opposition of the agreement believes that it will imposes no new obligations on investors to behave responsibly while at the same time imposes no obligation on foreign states to ensure their investors comply with local or home country laws, according to a position of India which alongside South Africa opposed this agreement.

It also bears a core rule ironically called “transparency,” which according to Mr Kiiza  puts not only obligations on governments to provide mechanisms for foreign investors to intervene in national democratic processes but it empowers multinational corporations to lobby against new laws that they oppose, giving them rights that citizens do not have.

Also, not only does the proposed Agreement provide new rights for foreign investors, but also it imposes no new obligations on them to behave responsibly and in the interests of “our nation’s workers, women, Indigenous peoples and other communities.”

There was a consensus among LDCs that this is an illegal agreement seeking to enter the WTO rules book through the backdoor, because since 1996, the issue of investment in the WTO was rejected and that there will be no negotiations in the WTO until the Doha round is over.

Former Minister of State for Trade Harriet Ntabazi speaks to an official during the 13th Ministerial Conference of the World Trade Organisation in Abu Dhabi in February 2024.  PHOTO/ courtesy

Its rejection at the MC 13, according to researcher Kiiza, “is an indirect win for Uganda because, despite its onerous provisions and implications for Uganda’s development, the country was in favour of the agreement.”

Graduating from LDC
On transition support measures in support of graduating LDCs, the MC 13 outcome decision was that a member who graduates from an LDC category shall continue to be eligible for LDCs specific technical assistance and benefit from special procedures involving LDCs for three years.

The recent graduation of Uganda by being redesignated as a low-medium country while welcome, means that after three years, Uganda will no longer qualify for special support measures targeting the LDCs at the WTO.

This will mean Uganda can not ratify and implement the problematic EU Economic Partnership Agreement (EPA) as she will no longer be a beneficiary of the Everything But Arms (EBA). Uganda, therefore, needs to redouble its efforts for inclusive human development and avoid becoming, yet again, a heavily indebted country.

On the moratorium on import duties on electronic transmissions, there was an extension of the moratorium on E-Commerce that stops developing countries from imposing customs duties on goods transmitted digitally. This means the revenue losses will continue, while hopes of this leading to boosting E-Commerce in Uganda prevail too.

In conclusion, the WTO MC 13 revealed that key issues for Uganda remain stuck. Indeed, ministers could not agree on incorporation into the outcome text key issues like industrial policy and the many trade distortions it can potentially create, as well as trade’s evolving and complex relationship with the environment.