Development assistance can help bridge unmet financial needs as countries strive to meet the MDGs, including the goals set out in the Gleneagles Communiqué, but in the long run countries want and need improved trade opportunities to fuel development and growth. In 2005 the G8 committed to 'make trade work for Africa'. DATA interprets this commitment to mean that the G8 would work through the Doha development round, or other vehicles if necessary, to ensure that African countries can better access local, regional and global markets and that they would have the capacity necessary to produce goods for those markets. The package required to do this includes the reduction of agricultural subsidies so as to regularise the price of goods on the market; enhanced access to rich country markets through reduced tariffs, with simpler rules of origin for preference programmes; aid for trade to help countries produce and deliver goods; and, last but not least, the policy space to ensure that trade agreements are handled through each country's due democratic process and that they fit each country's economic development agenda.
The need to improve trade policy has been spotlighted recently by headlines regarding the global food crisis. Continuing trade restrictions and subsidies on agricultural products and weak infrastructure, compounded by other economic shocks, have distorted global markets and increased food prices beyond the reach of poor people. The World Food Programme estimates that the cumulative impact of these factors means that 100 million more people could be driven deeper into poverty. Some countries will react to these headlines by calling for even greater subsidies to produce more subsidised food for the global market. But we cannot allow this crisis to reinforce some of the policies that have exacerbated it in the first place.
$750bnAmount the EU, US, Japan and Canada have spent on agricultural subsidies since the launch of the Doha round in 2001.
At the time this report went to press, the Doha development round was still being held up by the politics of rich nations, with little real focus on development needs. The G8 must still deliver upon their commitment to make trade work for Africa, and yet they have thus far failed to do so through Doha or through lasting and significant bilateral policy changes. DATA calls for an African Trade Initiative to be implemented, either through Doha or by individual G8 countries, that addresses the impact of subsidies on global markets; reinforces and simplifies preference programmes granting access to G8 markets for African goods; scales up aid or trade to enhance Africa's capacity to produce and export; and ensures the policy space needed throughout these transitions.