The World needs Free Trade and Less Protectionism. In times of global economic uncertainties
The World Trade Organization (WTO) is the only global trade governance institution, which deals with making and administering rules of international trade between nations and facilitating global trade liberalization through multilateral trade negotiations.
The present slow pace development of the World Trade Organization (WTO) Doha Development Round negotiations, is largely influenced by the current global economic uncertainties and financial crisis.
Global financial markets instability and volatility have impacted cross boarder movement of goods, services and capital. This in return has influenced global decline in consumption and production.
The aggregate impact of the present global economic crisis has led to fall in global, GDP growth, decline in Foreign Direct Investment exchanges between trading nations, and sharp fall in labor productivity. That has resulted in people loosing jobs in developed and emerging economies.
Against this background of current global economic and financial crisis, this has directly impacted the progress of WTO multilateral trading system negotiations.
The one of the challenge facing world leaders and key policy makers is how best to promote global free trade and push further with the agenda of multilateral trade negotiations and liberalization, amid global economic uncertainties and financial crisis.
The present danger and threats of protectionism, trade discrimination and trade distortions measures pursued by developed and emerging economies. As a result of the current global financial crisis and failure to conclude the multilateral trade talks, likely reduces the confidence and faith in the WTO multilateral trading system. That promotes international free trade and reduction of trade barriers through multilateral trade negotiations.
I am certain as world leaders will meet in London for the G20 meeting in April; they will reaffirm their commitments to global free trade and development. Reaffirming commitments is not enough what is required is sense of urgency, action and political will to conclude the Doha Round.
The present global economic depression and financial crisis has presented few opportunities and threats to African economies in relation to global free trade and multilateral trade negotiations and integration
First, there is a need for stronger and deeper regional economic integration across the African Union. The idea to create a single convergence institution platform for SADC, COMESA and EAC as presented and argued by the former African Union chairman; President Kikwete of Tanzania is the right step forward in the right direction.
Such step will favor the enabling environment for creation of a single Africa external trade policy; in return such policy will promote single Africa Union free trade area and customs union. This move will enable Africa to speak with a single voice at the World Trade Organization.
Second, the global financial crisis has created a political space for economic policy and strategy maneuvering in African economies on how to manage fiscal and monetary policies in times of economic crisis, such as the need for emergence stimulus packages for African economies.
There is also a wider consensus to increase aggregate expenditure in infrastructure spending and setting new fiscal rules such as inflation targeting and pursuing investments policies reforms to ensure equitable and sustainable economic growth in the long run.
The threat to African economies is simple. If developed nations economies recover successfully and African economies fail to fully recover and market and policy failures continue to occur, I would not be surprised to see African governments turning to the left and become pro socialist policies as Latin America nations have demonstrated.
The lesson from this global financial crisis to Africa is simple; western style capitalism has to deliver economic prosperity and sustainable and equitable development in Africa and it's, only through government interventions in the market that can be achieved.