Yes, we have bananas. We just can’t ship them.
Originally published on the New York Times op-ed page, 16 December 2005.
At this week’s ministerial meeting of the World Trade Organization in Hong Kong, negotiators have once again hit an impasse over how and when to open the rich world’s agricultural markets to farmers in the poorest countries. What few people have realized, however, is that poor countries don’t have to wait for the World Trade Organization. There is plenty that they can and should do to help their own farmers to trade.
Imagine a dream scenario in which the trade ministers emerge from their negotiations this weekend holding hands and proclaiming an end to all agricultural protectionism. What then?
For, say, a banana picker in the Central African Republic, not a lot. The trade barriers at the borders of the rich world may have disappeared, but if our picker wants to sell his bananas abroad he first has to get them onto a ship bound for America or Europe. That takes 116 days, and an incredible 38 signatures – each one an opportunity for some official to collect a bribe. Something is rotten here, and not just the bananas.
Sub-Saharan African exporters face, on average, delays of nearly 50 days for each shipment. They must get roughly 20 signatures on eight or nine separate customs forms. (These figures are all documented in “Doing Business in 2006: Creating Jobs,” a report released in September by the World Bank. A disclosure: I was an adviser to the report team.)
Part of the problem, of course, is that landlocked African countries are linked to the outside world by long, decrepit roads and underdeveloped ports in neighboring countries. But determined growers can move bananas along even lousy roads. The real problem is elsewhere: three-quarters of delays are the result of red tape, not port handling or inland transport. These delays, caused by senseless bureaucracy, unnecessary forms and archaic inspection practices, can often be eliminated with a stroke of a pen by a country’s chief executive. Even the more sophisticated reforms, like introducing electronic filing, or using software to guide sensible risk-based customs inspections, require only small outlays. What’s more, such reforms increase the interception of smuggled goods and discourage corrupt customs officials.
The Group of 20, composed of developing countries like Argentina, Brazil, China and India, has been pushing hardest of all for an end to rich countries’ agricultural subsidies and tariffs. Paradoxically, some of the most vocal members of the group impose regulatory barriers that are just as crippling to exporters in their own countries. India’s commerce minister, Kamal Nath, has called for rich countries to “eliminate export subsidies as fast as possible.” And so they should, but Mr. Nath might take note that an Indian exporter needs to collect 22 signatures on 10 documents – that puts India in the bottom 20 countries in the world for letting its own entrepreneurs trade across borders. Celso Amorim, Brazil’s foreign minister, has condemned farming subsidies as “the most harmful single piece of commerce.” The subsidies are indeed repugnant, but Brazilian exporters need 39 days to get their produce onto a ship, too long for some agricultural goods.
It doesn’t have to be that way. China can get exports moving in 20 days, the United States in nine days. Danish exporters can ship in five days.
We should wish the trade ministers well in their negotiations, because agricultural protectionism hurts consumers in the developed world as well as farmers in the poorest countries. But governments of poor countries must do far more to help their own citizens by reforming the Byzantine obstacles that stand in their way. One day rich countries may finally allow poor farmers to sell them beef, sugar or rice. It would be a disaster if their own governments prevented those poor farmers from taking full advantage of that opportunity.