WTO Public Forum 2024: Debates about Manufacturing and Implications for African Trade and Growth

Unlike last year, the sun was not kind to Geneva when trade officials, academics, and civil society representatives from across the world arrived for the annual World Trade Organization (WTO) Public Forum. Yet, in some ways, the rainy weather and damp atmosphere reflected wider anxieties about the state of global trade. 

For centuries, trade has been seen as a gateway to prosperity. However, in recent years, trade has increasingly been challenged and blamed for job losses and industry changes as countries' comparative advantages and global markets change. 

During the WTO Public Forum, academics presented historical trade patterns that included open trade leading to increased prosperity followed by beneficiary countries attempting to consolidate gains by reinstating trade protections. These trade protections use “beggar-thy-neighbor” policies—economic policies that support individual polities but hurt others. As global trade has increased interdependence and merged markets, beggar-thy-neighbor policies have a greater potential to lead to economic downturns and recessions. 

One reason for the disconnect between beneficial global economic policy and practice is the politicization of trade. At the WTO Forum, Dimitry Grozoubinski presented findings from his book, Why Politicians Lie About Trade… and What You Need to Know About It. With much humor, Grozoubinski, a former trade negotiator, showed political actors' tendency to look for easy solutions to complex trade matters. He argued that politicians have incentives to cover up trade failures to voters who only have limited visibility into international trade policy. 

Similarly, Harvard Professor Robert Z. Lawrence shared data from his book Behind the Curve: Can Manufacturing Still Provide Inclusive Growth? that shows how the relatively easier ability to track productivity growth in blue-collar industries leads politicians to favor protectionist manufacturing policies. Grozoubinski and Lawrence presented different data that both argued that ease of political messaging and explaining complex policy to voters can push political leaders towards policies with negative consequences to trade. This can be antagonistic to critical trading partners. 

Lawrence suggested that politically driven policy choices fail to follow the evidence. Attempts to revive manufacturing are fighting against global realities that show economies transition away from manufacturing at a specific development stage. Technological change and shifting consumer spending patterns almost always accelerate the decline of manufacturing.   

In the face of protectionist policies, less developed economies, like those across Africa, are working to advance free-trade initiatives. With current involvement in only approximately 3% of global trade, African states see increased trade as a pathway out of poverty.  

The African Union’s Private Sector Trade and Investment Committee (PAFTRAC) raised this point when it launched its fourth annual survey of African CEOs on trade constraints. The survey indicated that African CEOs were hopeful that the African Continental Free Trade Area (AfCFTA) will open more opportunities for intra-African trade even as inflationary pressures and residues of COVID-era supply chain disruptions still affect trade on the continent. 

The PAFTRAC team at the WTO Public Forum urged African policymakers in Geneva to focus on infrastructure and policies that facilitate aggregation across borders. The team cited examples like the Lobito Corridor, which aims to link development areas in Angola, the Democratic Republic of the Congo, and Zambia. 

The insights from the studies presented at the forum and different panels’ suggestions indicate that coordinated efforts through AfCFTA can advance projections like Irene Sun’s that private investment could make Africa the world’s next great factory. Additionally, increasing AfCFTA implementation can facilitate the construction of value chains in which the factor endowments determine what is produced in each geographic region. This can then be aggregated to enhance competitiveness. This would check the premature de-industrialization that substitution industrialization has produced in countries like Nigeria, where the textile manufacturing sector has suffered severe reversals in recent years.