European leaders, WTO warn against unilateral tariffs, rising protectionism

The world needs to urgently tackle the rising protectionism and aggressive tariff measures that threaten to destabilize the multilateral trading system and global markets, South Africa, European leaders and the World Trade Organization said during the first G20 summit ever held on African soil.

Without a direct reference to the US, the United Kingdom's Prime Minister Keir Starmer and Spain's Prime Minister Pedro Sanchez cautioned that the world must resist the slide toward unilateral tariff and nontariff measures.

"We should promote open and balanced trade, taking steps to liberalize trade where we can, with new agreements that lower tariffs and barriers and return to the stability and certainty that businesses need," the UK premier said.

Starmer noted that the move is a key priority for his government, adding that it has already secured agreements and made progress with partners such as India and the European Union. These efforts he pointed out, are strengthening their economies and creating new opportunities for their people.

Sanchez also underlined the need to urgently tackle the rising protectionism which, he noted, is eroding the foundations of global growth.

"Let me be clear, tariffs are not a weapon, they are a barrier," he said during the opening of the two-day conference in Johannesburg which concluded on Sunday.

"Industrial overcapacity and unfair competition are real challenges, both for advanced and developing countries, but responding to them with tariffs leads only to collective defeat," he added.

The Spanish PM reiterated the need to strengthen the multilateral trading system and restore the central role of the WTO, stressing that genuine reform can only be achieved through cooperation rather than unilateral measures.

Real impacts

WTO Director-General Ngozi Okonjo-Iweala, who spoke on the sidelines of the G20 summit, stated that Africa has borne the brunt of the real impacts of escalating geopolitical tensions and the sweeping US tariffs.

"The high unilateral duties and a growing number of bilateral trade deals outside the WTO, have disrupted global commerce," she said.

She pointed out that WTO analysis indicates that 28 percent of world trade is still taking place outside WTO rules.

Despite the high cost of intra-African trade being 20 percent more expensive, she said Africa's reliance on intra-African and South-South trade, has helped cushion the blow.

The G20 leaders, in their final declaration, said the African Continental Free Trade Area, or AfCFTA, and Africa-led trade initiatives were essential pillars of global economic resilience.

"We support the implementation of the Comprehensive Africa Agriculture Development Programme (CAADP) Strategy and Action Plan and AfCFTA, including through investing in local food production, storage and distribution capacities," said the declaration.

The world leaders said the initiative will help reduce dependence on volatile global supply chains as well as support African-led efforts to build integrated seed banks, enhance local fertilizer production and promote intra-African agricultural trade.

South African President Cyril Ramaphosa has in the past indicated that the country will continue its diplomatic efforts toward a more balanced and mutually beneficial trade relationship with the United States, calling the imposition of a 30-percent trade tariff unfair.

The challenges facing sub-Saharan countries have been compounded by the expiration of the US preferential trade program and the uncertainty surrounding the renewal of the African Growth and Opportunity Act after its expiration on Sept 30 this year.

The act, in place since 2000, has granted eligible sub-Saharan nations tariff-free access to the US market under specific conditions.

Trade experts caution that the newly imposed duties, ranging from 10 to 50 percent, are already rattling African industries, with business leaders warning of looming job losses and declining rural incomes.

victor@chinadailyafrica.com