(iii)

* Since African exports are highly concentrated in primary commodities there is an strong<sup>interest in</sup> utilizing natural resource based industrialization strategies for their<sup>industrialization. Where further processing is</sup> suitable for developing countries OECD preferences should be extended to all stages<sup>of a processing chain. Also,</sup> an accelerated phase-in of OECD Uruguay Round tariff cuts should be adopted<sup>on products of export interest to</sup> Africa. This could assist Africa in gaining additional experience in potentially important<sup>markets (such as those for</sup> textiles and clothing) which will come under increased competitive pressure due to the MFA phase-out.

* Given the problem of extreme rural poverty in Africa, and<sup>the potential contribution increased</sup> agricultural exports could make toward its alleviation, measures are needed<sup>to reduce protection against African food</sup> exports. One option would be to extend (ceiling free) GSP preferences<sup>for "tariffied' agricultural NTBs.</sup>

* Ceilings and quotas should be eliminated from developed country preference schemes<sup>to be made</sup> consistent with unrestricted intra-OECD preferences extended under FTAs.<sup>Ceilings considerably reduce the</sup> potential worth of the GSP to African countries since, aside<sup>from their direct trade effects, they also introduce</sup> further uncertainty regarding the operation of the system (i.e., African<sup>exporters may not know whether a shipment</sup> will qualify for GSP treatment until its arrival in the import<sup>market). It is also been alleged that ceilings are</sup> sometimes set below minimum efficient plant size. This negates<sup>the intended trade and investment increasing</sup> incentives of the preferences.

* Until the above recommendations are fully accomplished, improved<sup>statistical information is required</sup> on constraints that Africa and other developing countries encounter<sup>in attempting to utilize preferences schemes.</sup> Details are needed on the extent to which quotas or ceilings are exceeded<sup>(with the result that additional African</sup> exports are taxed at the prevailing MFN rate) and the extent to which<sup>exports are disqualified due to existing rules</sup> of origin. Such information is central to any proper assessment of<sup>the economic impact of preferences on the</sup> receiving countries and to initiatives for improving these programs.

# Several OECD policy initiatives could help alleviate Africa's international transport<sup>problems:</sup>

i Technical assistance. International shipping has undergone a major transformation in which procedures for cargo unitization, port operations, and related logistical functions<sup>have evolved into highly complex operations</sup> requiring a considerable degree of technical expertise. Since most<sup>African countries have limited access to such</sup> expertise, technical assistance programs (such as those provided by<sup>UNCTAD and the World Bank) should be</sup> expanded and also extended to related activities (such as customs<sup>clearance procedures) that impinge on the</sup> efficiency of international transport operations.

v Finance and development. Due to insufficient attention and funds, many<sup>African countries' fleets, ports,</sup> and connecting inland transport infrastructure have deteriorated, or have<sup>become technologically outmoded. OECD</sup> countries should sponsor a comprehensive survey and report on<sup>sub-Saharan Africa's transport problems along with</sup> policy proposals for their alleviation. Given the small size of many<sup>African countries, and its influence on cargo</sup> volumes and the utilization of efficient transport technologies, further<sup>attention should be given to the development</sup> of regional ports and required inland infra-structure.

* The situation of land-locked African countries needs special attention<sup>given the major problems these</sup> countries face in transitting their neighbor's territories. A major effort<sup>should attempt to identify the special trade</sup> problems of the land-locked African countries and formulate policy<sup>suggestions for their reduction.</sup>