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Issue:
Improving the fair participation of African countries in
protected markets
Forum:
Fourth Committee of the General Assembly (GA4)
Position:
President of the General Assembly & Deputy
President
Name:
Efe Aydoğ & Eva Ulmann
Introduction
As the Second World War ended, movements of African nationalism and
independence were widespread across the continent of Africa. Various local peoples
demanded the end of imperialism, and numerous battles were fought against former
imperialist and neo colonial powers. African and Asian economies were considered to be at
the same level in the 1960s, with both regions newly gaining political independence over
European imperial powers. However, many economists claim that their political
independency was overshadowed by economic dependency on the then so-called “First
World”, which consisted of European powers and the United States. While some Asian
states blossomed with their economies through an increase in local trade, African countries
did not see such a leap in their economies. Most African economies are dependant on
agriculture, and the lack of industrial growth caused an underdevelopment in the continent.
The underdevelopment fed economic failures, which later on lead to bloody conflicts.
With the boom of globalisation in the 1990s, a movement of African Unity had
emerged. The World Bank and the International Monetary Fund supported this movement,
unlike the Pan-Africanism movement of the 1960s, as it supported the newly set up global
economic system that made world economies interdependent. Between 1983 and 2000,
more than 7 unions throughout the continent were set up, and local trade was encouraged
and intercontinental trade was on the rise. However, corrupt governance, lack of Foreign
Direct Investments (FDI) and sometimes too much FDIs that made African countries too
dependent on large corporations broke nations apart. In this chair report, an analysis of the
involvement of African states in protected markets of the globalized 21st century economies
will be made.
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A chart from the Economist shows GDPs per capital in African states
Definition of Key Terms
Protected markets
Protected markets are markets for which certain legal and financial requirements are needed
to enter, or markets which use taxes, tariff barriers, levies or state subsidies to prevent some
economic parties from participating them.
Protectionism
Protectionism is used in economics to describe the economic policy which restrains trade
between countries or states through methods such as but not limited to restrictive quotas,
tariffs on imported goods and other governmental regulations. These measures are intended
to regulate fair competition between imported goods and services and those produced within
the country. This policy contrasts with the ideology of free trade, where governments try to
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reduce the barriers to trade with foreign nations. Protectionism is said to have a largely
negative impact on economic growth as well as on economic welfare in general, although
this varies largely between different countries and depends considerably on the policy and
macroeconomic environment.
Economic domination
Economic domination describes the position of a country which has raised its
manufacturing power and its navigation to such a high degree of development that no other
country can sustain or benefit from free competition with this country. Economic domination
is generally achieved by means of protective duties or restrictions.
General Overview
From the passage of the Tariff of 1816 to World War II, protectionism was the policy
of the United States, "switching to free trade only in 1945, when most of its industrial
competitors had been wiped out" by the war. In the late 19th Century, Germany, too, used
protectionist measures to grow its industry. After WWII, Japan followed that model. It has
also been argued that Deng Xiaoping's post-Mao policies were inspired by List, as well as
recent policies in India.
Various policies have been used to achieve protectionist goals, including:
From the passage of the Tariff of 1816 to World War II, protectionism was the policy
of the United States, "switching to free trade only in 1945, when most of its industrial
competitors had been wiped out" by the war. In the late 19th Century, Germany, too, used
protectionist measures to grow its industry. After WWII, Japan followed that model.
Various policies have been used to achieve protectionist goals, including:

Tariffs
Tariffs or taxes are typically imposed on goods that are imported. They vary
with regard to different types of goods. The tariffs are supposed to support
local producers by increasing the cost to importers and increasing the price of
the goods in local markets. Thus, the quantity of imported goods will
decrease; this is usually beneficial for local industries.

Import quotas
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Import quotas increase the market price of imported goods by reducing their
quantity.

Administrative barriers
Countries sometimes try to use their administrative rules (e.g. environmental
standards, regarding food safety, electrical safety, etcetera) to introduce
barriers to imports.

Anti-dumping legislation
Anti-dumping laws prevent "dumping" of cheaper foreign goods that could
cause local firms to close down. In practice however, anti-dumping laws are
most commonly used to impose trade tariffs on foreign exporters.

Direct subsidies
Government subsidies, for example cheap loans or lump-sum payments, are
sometimes given to local firms that cannot compete well against imports.
These subsidies are supposed to help local firms adjust to the world markets.

Export subsidies
Governments often use export subsidies in order to support export. Exporters
receive payment, in the form of a percentage or proportion of the value of the
goods exported. Export subsidies help to increase the amount of trade in a
country.

Exchange rate manipulation
A government can raise the cost of imports, as well as lower the cost of
exports by selling its own currency in the foreign exchange market. Thus, the
value of its currency will be decreased, which will lead to an improvement in
the trade balance of the country. On the long run, however, this will very likely
lead to inflation in the country, which will do the exact opposite, which is to
raise the cost of exports and reduce the cost of imports.

Employment-based immigration restrictions, such as but not limited to labour
certification requirements or numerical caps on work visas.

Political campaigns advocating domestic consumption. These campaigns
could be seen as extra-legal promotion of protectionism.

Preferential governmental spending, when a government selectively
distributes its money. An example of this is the Buy American Act, federal
legislation that called upon the United States government to prefer U.S.-made
products in its purchases.
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In the modern trade environment, various other initiatives apart from tariffs have been
called protectionist, including the imposition of restrictive procedures on imported goods.
Even free trade agreements are often subject to protectionist provisions, such as but not
limited to copyright, intellectual property and patent restrictions that are beneficial to large
companies.
Protectionism is frequently criticised as being disadvantageous to the people it is
meant to help. A good alternative would be free trade, which allows countries to specialize in
the production of products and services in which they have a relative advantage, thus
creating more jobs than it destroys. According to economist Stephen Magee, the advantages
of free trade outweigh the disadvantages by approximately 100 to 1.
Free trade supports equal access to national resources for domestic and foreign
participants alike. A high level of freedom and mobility between countries has been shown to
lead to considerably greater development than, for example, aid programs.
Additionally, the fact that workers in less developed countries accept low-paying jobs
from corporations in developed countries demonstrates that their other prospects of
employment are worse. The growth of manufacturing in developing countries, which results
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from free trade, creates competition amongst producers, which could result to lifted wages
and increased living conditions.
Protectionism has also been called one of the major causes of war. Proponents
espouse this theory by pointing to the continual warfare in the 17th and 18th centuries among
European states whose governments were predominantly protectionist, the American
Revolution, which seemed to have been influenced by British taxes and tariffs, as well as the
protective policies which preceded both the first and the second World War. Frédéric Bastiat
commented the following on this subject: ‘’When goods cannot cross borders, armies will.’’
Protectionist measures taken between 2008 and 2013, according to Global Trade Alert.
After the end of World War II, most First World countries have implemented the
policy to eliminate protectionism by means of free trade policies which were to be enforced
by international treaties and organisations like the World Trade Organization. However,
certain policies have been accused of being protectionist, including the Common Agricultural
Policy in the European Union and agricultural subsidies and ‘’Buy American’’ provisions in
the United States.
In April 2009, heads of the G20 meeting in London pledged: ‘’We will not repeat the
historic mistakes of protectionism of previous eras’’. The Global Trade Alert monitors
adherence to this pledge, by providing up-to-date information and useful commentary. Even
though many of these countries had already committed to such a policy before April 2009,
the World Bank has reported 17 of these 20 states as having imposed measures that restrict
trade since then.
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The Organization for Economic Co-operation and Development (OECD) released a
study report, named ‘’Policy Priorities for International Trade and Jobs’’, evaluating a study
from the International Collaborative Initiative on Trade and Employment (ICITE), which
shows that protectionist trade measures are likely to suppress growth and put further
pressure on labour markets, instead of protecting or preserving jobs. It describes market
openness as a significate element to boost growth and employment in today’s environment.
Additionally, the report highlights the positive role of trade in raising incomes and average
wages by analysing the intricate interactions between trade, globalisation and labour
markets. Besides, it invalidates the alleged impact of imports on jobs, the major argument
against freeing up trade, by explaining there is no relation between imports and
unemployment. In fact, the opposite is true: both exports and imports are known to increase
productivity growth while helping create higher paying jobs.
Together with openness to trade, other policies should be implemented, such as a
positive investment climate, macroeconomic policies, adequate social safety nets and
flexible labour markets; all to be able to encounter the full benefits of trade. When
accompanied by effective employment and education policies, trade liberalisation is bound
to go hand in hand with better economic performance, in both developed and developing
economies alike.
Major Parties Involved
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International Collaborative Initiative on Trade and Employment (ICITE)
The purpose of the International Collaborative Initiative on Trade and Employment
exists of seeking a better understanding of the way in which trade interacts with employment
and developing conclusions relevant to this policy. The ICITE has the opinion that
international investment and trade are important contributors to economic growth and
development. The ICITE further aims to support the expansion of knowledge about the
issues that go together with this subject, including the consideration of policy implications. In
the future, the ICITE will create a register of data resources, support discussion among
involved parties, as well as supply resources with information for both policy-makers and the
public.
Organisation for Economic Co-operation and Development (OECD)
The object of the Organisation for Economic Co-operation and Development (OECD)
is to encourage policies that are bound to increase the social and economic well-being of
people from around the world. The OECD provides a forum where governments can
collaborate, share their experiences and search for solutions to common problems.
Additionally, the OECD compares and evaluates data, which include measured
global flows of investment and trade, in order to predict future trends and set global
standards from taxes to the safety of chemicals.
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Timeline of Key Events
1816
Tariff of 1816 is passed
1959
Central Bank of West African States is formed
25 May 1963
Organization of African Unity is created
1976
African Economic Community formed
28 May 1975
ECOWAS (Western Africa) is established
18 October 1983
ECCAS (Central Africa) is established
17 February 1989
Arab Maghreb Union is set up
17 August 1992
SADC (Southern Africa) is established
5 November 1993
Common Market for Eastern and Southern Africa is
established
1 January 1995
World Trade Organization is formed
25 November 1996
Intergovernmental Authority on Development is established
4 February 1998
Community of Sahel-Saharan States is created
9 September 1999
Sirte Declaration demanding cooperation on many levels
including economic levels signed by African states
30 November 1999
EAC (Eastern Africa) is established
9 July 2002
Organization of African Unity disbanded, replaced with the
African Union
October 2008
African Free Trade Zone (AFTZ) announced
December 2009
Resolution 64/236 issued by the UNGA
May 2015
Proposals for the African Central Bank
2023
African Economic Community to implement single currency
over member countries
2028
Projected completion date for the African Central Bank
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Previous attempts to resolve the issue
Hitherto, some organisations have been set up in order to tackle the issue of
improving the fair participation of African countries in protected markets. These include the
International Collaborative Initiative on Trade and Employment (ICITE), which aims to seek a
better understanding of how trade interacts with employment, promote discussion on these
problems and develop conclusions that are relevant to its policy, and the Organisation for
Economic Co-operation and Development (OECD), which sets out to support policies that
will ameliorate the social and economic well-being of people around the world.
In December 2009, resolution 64/236 was published by the General Assembly, in
which the GA decided to organize the United Nations Conference on Sustainable
Development at the highest possible level in 2012.
Possible Solutions
An attempt towards a monetary union and a fiscal union is desired by the African
Union. As West Africa is expected to have an economic boom just as South Asia had in the
1980s, the first step towards more involvement of African countries in free trade and
protected markets lies in putting a mark to conflicts. Threats of terror caused by radical
militants and insurgents need to be eradicated, and this requires an improvement in the
control of central governments. International coalitions could support African governments’
fight against such threats.
It is also seen that there are numerous African economic communities as shown in
the diagram below. Strengthening unity with an economic alliance that contains all subcommunities is ought to be established.
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International investment and trade are important contributors to economic growth and
development. Research of the Organization for Economic Co-operation and Development
(OECD) shows that further trade opening, by means of non-tariff barriers or reduction of
tariffs, could stimulate job creation and thus entail worldwide economic benefits.
A sustainable approach to such an opening of markets asks for policies that aim to
help communities as well as workers adjust to the more competitive environment that will
result from market opening. Evaluation of specific policy options is hard, given the
complicated relationship between employment and trade. Even where this relationship is
slightly clearer, perspectives on suitable policy responses might vary.
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Appendix/Appendices
-
http://www.hmun.nl/
"Future We Want - Outcome Document .:. Sustainable Development Knowledge
Platform." Future We Want - Outcome Document .:. Sustainable Development
Knowledge Platform. N.p., n.d. Web. 01 Feb. 2016.
https://sustainabledevelopment.un.org/futurewewant.html
Bibliography
"Trade-oriented Economy Boosts Growth, Employment." Trade-oriented Economy Boosts
Growth, Employment. N.p., n.d. Web. 21 Jan. 2016.
http://english.cri.cn/6826/2012/05/24/191s701737.htm
"Protectionism." Wikipedia. Wikimedia Foundation, n.d. Web. 21 Jan. 2016.
https://en.wikipedia.org/wiki/Protectionism
"Open Market." Wikipedia. Wikimedia Foundation, n.d. Web. 21 Jan. 2016.
https://en.wikipedia.org/wiki/Open_market
"About the OECD." - OECD. N.p., n.d. Web. 30 Jan. 2016.
http://www.oecd.org/about/
"International Collaborative Initiative on Trade and Employment (ICITE)." TADICITE OECD. N.p., n.d. Web. 30 Jan. 2016. http://www.oecd.org/site/tadicite/
"Future We Want - Outcome Document .:. Sustainable Development Knowledge Platform."
Future We Want - Outcome Document .:. Sustainable Development Knowledge Platform.
N.p., n.d. Web. 01 Feb. 2016. https://sustainabledevelopment.un.org/futurewewant.html
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