The food crisis is bringing about a role reversal in the World Trade Organization: traditionally liberal major food exporters are now imposing restrictions on exports while protectionist states are pushing for liberalisation.
To deal with the recent hike in food prices, Argentina, Brazil, Vietnam, India and Egypt have all imposed limitations on the export of certain produce in order to ensure food security for their populations.This is unusual for some of these countries.
Argentina and Brazil, for instance, are part of the Cairns group, among the most aggressive proponents of liberalisation in the Doha round of trade liberalisation negotiations at the WTO.The members of this group want the European Union and the United States to lower tariffs so they can export their food produce.The direction taken by these developing nations is embarrassing their representatives in Geneva.
A Brazilian official said that he "does not understand" his government's recent decision to announce a temporary stoppage of rice exports. Brazil's government also said it was digging into its 1.6-million-ton reserve of rice to alleviate price pressure on the staple, which has become increasingly expensive worldwide as consumption grows in Asia, its main market. "These measures concern stocks of rice owned by the government and not the sale by private companies," he explained, but added that this "element of intervention on the markets" could be viewed negatively in the WTO negotiations.
Voices of dissent are already being raised. Japan will table the issue during the WTO agricultural committee meeting. A net food importer, Japan imposes extremely high tariffs of some 500 percent on rice to protect its own market.
"We are not against the prohibitions and the restrictions of exports," said Takaaki Kawakami, first secretary at the Japanese mission to the WTO. "But the countries heavily dependant on the imports like us do not want the food security of our population to be put in danger," he said.
The plan proposed by Tokyo would require countries imposing restrictions to notify the WTO within 90 days and to justify the move. Such restrictions should also not last more than a year. While it would not stop countries from imposing restrictions, Japan hopes that the additional procedure would lead to discussions among nations on the subject.
Currently, according to the 1994 agreement on agriculture, developing countries can impose restrictions on exports.
EU trade commissioner Peter Mandelson recently said that taxes of exports or quotas provide nothing but an "illusion of food security."
For some observers of developing nations, such restrictions on exports risk aggravating the situation for the world's poorest. These restrictions "could put poor countries which are dependant on imports in a situation which is more volatile and critical than it is currently," said Carin Smaller, director of the association Institute for Agriculture and Trade policy in Geneva. "African countries, like Ghana, Senegal, Ivory Coast or Cameroon depend mainly on imports which they buy on the world market, such as rice from India, soya from Brazil or wheat from Argentina" she said.
As a gesture of appeasement, India, which recently suspended its rice exports, promised to supply Senegal with 600,000 tonnes of rice per year for six years.
AFP
April 27, 2008
1. EU EPA pressure works against African regional integration efforts, not for them
2. EU aid, trade goals clash
3. China rejects European criticism of its policies towards Africa
4. Project assists ACP countries with trade negotiation skills
5. Malawi wary of signing EPA
6. French position on EPAs unclear
7. Ghana to amend mining laws for the country's benefit
8. African Development Bank to lend $1.5 billion for infrastructure
2. EU aid, trade goals clash
3. China rejects European criticism of its policies towards Africa
4. Project assists ACP countries with trade negotiation skills
5. Malawi wary of signing EPA
6. French position on EPAs unclear
7. Ghana to amend mining laws for the country's benefit
8. African Development Bank to lend $1.5 billion for infrastructure
Row between Kenya, Uganda over agricultural trade barriers
A trade row is brewing between Uganda and Kenya over the alleged use of non-trade barriers by authorities in the two countries to block the entry of certain agricultural products into their respective markets.
The issue first came to light late last year when officials in Kampala protested a decision by their counterparts in Nairobi to deny Ugandan poultry breeders export permits that would enable them to sell day-old chicks in the Kenyan market.
Matters took an interesting turn this April when Nairobi’s envoy to Kampala, High Commissioner Japhieth, Getug wrote to Uganda’s Trade Minister, Nelson Gaggawala Wambuzi, arguing that an 11-year-old ban on the exportation of Kenyan livestock and associated products to Uganda not only violates the World Trade Organisation’s Sanitary and Phytosanitary (SPS) agreement, but also contradicts the spirit of the East African Community’s Customs Union. The April 8 letter noted that the ban on Kenyan meat products as well as bull semen, was unwarranted because the country had put the necessary safety measures in place.
“Kenya considers the bans on both beef and bull semen as non-trade barriers that must be removed,” wrote Mr Getugi.
Senior officials in Uganda’s Agriculture Ministry said a committee had been set up to review the ban — not just for Kenya but for all the other countries affected. Director of Animal Services Dr William Olaho Mukani, who is also the chairman of the Ban Review Committee, said, “The ban could be lifted in a year’s time.”
Dr Olaho Mukani said the government still had reservations about lifting the ban because of cases of crafty individuals claiming to import livestock products into Uganda from Kenya when they are actually importing them from other disease-infested countries using Kenya as a transit route.
Mr Getugi defended Kenyan livestock in his letter, saying that according to Kenya’s Livestock and Fisheries Development Ministry, the level of safety of Kenyan meat and meat products as stipulated in the country’s Meat Control Act and sanitary measures is consistent with OIE (World Organisation for Animal Health) and Codex guidelines on BSE (Mad Cow Disease) and food safety.
The national co-ordinator of Uganda’s Animal Breeding Centre in Entebbe, Dr Nelson Semambo Kiwanuka, said Uganda is currently importing an average of 35,000 straws of semen per annum, mainly from New Zealand and South Africa. He said this was way below the country’s needs. "There are 3.5 million head of cattle that we can inseminate countrywide, but the actual number that we inseminate is 35,000 every year, so the scope is really wide. Our target is to inseminate at least 50,000 every year, and in the next two years we should have increased the number to half a million,” he said.
It is this potential market that Kenyan breeders are looking to take advantage of should the ban on the export of the country’s livestock and livestock products to Uganda be lifted.
The current beef between the two countries is the latest episode in an evolving trade dispute over agricultural products and livestock. The Poultry Association of Uganda protested Kenya’s continued reluctance to open its market to Ugandan exporters although Kenchick — Kenya’s largest exporter of day-old chicks — was allowed to export freely to the Ugandan market.
With one Ugandan exporter — Ugachick — saying that it was losing up to Ush18 million ($10,000) a week since it could not export the 15,000 day-old chicks for which it had secured a deal in Kenya, Uganda’s Third Deputy Prime Minister and Minister for East African Community Affairs, Eriya Kategaya, along with the Trade Minister, pursued the matter with their Kenyan counterparts when the release of the report was delayed by four months.
Commenting on the findings by the Kenyan team, Mr Getugi noted that not only did they find the disease reporting systems of the two exporting firms they visited to be inadequate, they also found the legal framework governing operations of hatcheries in Uganda in relation to disease control to be wanting. “The general finding is that the capacity of the Veterinary Department in disease surveillance is wanting and diagnosis is not adequate. The central laboratory in Entebbe lacks the capacity to deal with most poultry diseases,” he noted.
The Director of Animal Services in Uganda’s Agriculture Ministry, Dr William Olaho Mukani, acknowledged that Uganda’s laboratory had been neglected in the past. He, however, added that it was now being refurbished after the government received funding from the World Bank to improve the country’s preparedness to tackle the Avian influenza (bird flu) epidemic.
“In the restructuring exercise, the laboratory was left out, which was very unfortunate. But we have increased the equipment and refurbished the laboratory after we got funding from the World Bank. In the future, we are planning for the laboratory to get its own separate funding from government,” said Dr Olaho Mukani.
However, Ugandan authorities have threatened to reject the report by the visiting Kenyan veterinary services team on the state of Uganda’s veterinary services. Uganda accuses Kenya of breaching guidelines on confidentiality set by the World Organisation for Animal Health (OIE), and of trying to unfairly influence matters by raising them at the political level before they are discussed by the technical experts.
Dr David Kauta Nawa, the Commissioner for Livestock Health and Entomology in Uganda’s Agriculture Ministry, accused his Kenyan counterparts of jumping the gun. He stated: “The method that they are using to make their submissions is irregular. We are supposed to communicate as veterinary service professionals, study the report and then bring it jointly to the political level, but now the things have started at the political level.
“According to the guidelines given by the OIE, all of us as veterinary service professionals are supposed to act impartially and not to be swayed by political sentiments. But when such a report first goes to the political level, it means they don’t want to work impartially.”
The Kenyan report further noted that Uganda does not have a policy on poultry, meaning that the government does not have a comprehensive plan for monitoring the sector.
Dr Kauta however shot down this argument, saying Uganda did not need a poultry-specific policy since it already had a sector-wide policy.
He said: “We have a disease control policy in this country. What they fear is the spread of diseases, and the policy handles the issue of poultry diseases. So why do they want a poultry policy? Do they now want us to have a separate goat policy, cattle policy, sheep policy? You can’t have a policy on maize, cassava, rice and every other plant under the sun.”
The Kenyan team’s report, according to Mr Getugi, added: “The linkage between the Ugandan government veterinary department and the poultry industry is weak, with a lack of regular inspection and monitoring of poultry industry activities.”
Mukani ,however, told said that the problem had been sorted out and that more personnel had been recruited to carry out monitoring.
The report from the Kenyan assessment team further noted that the linkages between the District Veterinary Services and the Directorate of Veterinary Services are weak since the former operate under the local authorities.
“Though the country is strong in terms of veterinary services human capacity, the backing services (laboratory services and vaccines) are weak. Consequently, the country relies on services from South Africa and Makerere University. This is mainly driven by the demands of the poultry firms and not the government/department mandate,” reported Mr Getugi in his letter.
The Kenyan government has now set tough new conditions for their counterparts in Kampala to adhere to if Ugandan poultry breeders are to be allowed to export their products. The most controversial of the conditions is the requirement that the Kenyan Director of Veterinary Services be granted free access to evaluate Ugandan veterinary services on a biannual basis and at the same time carry out a risk analysis.
Dr Kauta however argued that the issue the Kenyan government was raising as a condition is supposed to be standard practice between countries that are involved in cross-border trade, according to OIE guidelines. These people are talking what is obvious,” he said. “The law says any country is free to ask another country to evaluate their services, especially if goods are being imported from that country. Why are they again bringing it up as a condition? Have we ever resisted when they ask to evaluate our services? In fact, we are the ones who wrote to them in the first place to come and inspect our facilities so I don’t know why they are putting it as a condition.”
The East African
EU EPA pressure works against African regional integration efforts, not for them
The European Union push for speedy signing of trade deals with individual African countries has 'shattered regional integration efforts, the campaign organization Oxfam has said.
Oxfam says the pressure of the December 2007 deadline led to the fragmentation of the Economic Partnership Agreements - EPA - negotiating blocs, making a mockery of regional integration objectives, and resulted in widely differing texts. Southern African block - SADC, for instance, according to Oxfam, has 13 members split between three different EPA negotiating blocs.
"All of the African EPAs are different and in only one region, EAC - East African Community- does more than one country have the same commitments as the others", Oxfam says in its report released at the twelfth UN Conference on Trade and Development in Ghana on April 21.
In West Africa, the aid agency says moves to a common external tariff will be made impossible if the bilateral EPAs that Côte d'Ivoire and Ghana have initialed are not changed. Their differing texts and tariff schedules as well as standstill clauses preclude the adaptations required for regional harmonisation.
The Common Market of Eastern and Southern Africa - COMESA - now has a series of different agreements initialed with the EU where five countries have taken up the 'EAC text' and have the same tariff schedules. Another five have subscribed to a separate 'ESA text' and each with different schedules. The six remaining countries have chosen to stay with Everything But Arms. This poses severe problems for the creation of a common external tariff, Oxfam says.
The Southern African Customs Union, the oldest customs union in the world, has been thrown into crisis, according to the agency. South Africa, which accounts for more than 90 per cent of the region's income, has not initialed an EPA, while the others have. Namibia is said to have backed the agreement with the provision that further changes would be made to the text.
In an attempt to reconcile EPAs with regional integration, African heads of state apparently requested that all deals be brought to the African Union for review before they are signed and committed into law. "However, Europe is insisting that the deals are signed by individual countries immediately, leaving no time for such a review," Oxfam notes.
The report says the EU will do irrevocable damage to the development prospects of some of the poorest countries in the world unless it overhauls free trade deals due to be finalized this year.
allafrica.com
EU aid, trade goals clash
What can developing countries expect from regional trade deals with the EU? ‘Raw Deal', a report published this week by the World Development Movement provides an answer.
Assessing the development impacts of two existing EU bilateral trade agreements – with South Africa and Mexico – the report highlights a range of negative impacts including: balance of payment problems; reduced tax revenue; reduced access to credit for farmers, reduced ability to regulate foreign investors effectively and increased unemployment.
The report finds, for example, that South Africa has experienced an almost 50% increase in food and drink imports from Europe, leading to job losses in a country already experiencing massive unemployment. In Mexico, liberalisation of the financial sector has led to Mexican banking becoming dominated by a few foreign banks, resulting in higher interest rates and reduced access to credit for small- and medium-sized companies and small farmers.
These findings are important because, in addition to the 76 African Caribbean and Pacific countries, the EU is targeting a further 34 countries in Latin America, Asia and the Mediterranean for regional trade agreements. The common perception is that many, if not all of these countries, such as India, Bolivia, Colombia, Nicaragua, Vietnam, and Indonesia, are ‘fair game' for radical liberalisation. Yet the 34 countries are home to 2.2 billion people, 920 million of whom live on less than €1.25 a day.
The European Union's stated desire to ensure that its policies are consistent with achieving the UN's Millennium Development Goals sits uncomfortably with the aggressive market-access push set out in the EU's ‘Global Europe' strategy. The terms of this push go well beyond the deals struck with Mexico and South Africa and well beyond any deal that might be done in the World Trade Organization. And poverty reduction is not the only policy area that could be undermined by ‘Global Europe.'
Given past experience of developing-country farmers struggling to compete with subsidised imports, does it make sense for Europe to prise open agricultural markets in countries such as Bolivia and Colombia where a principal alternative livelihood is growing coca?
I hope we would all agree that it is in our long-term best interests that these countries can successfully pursue development. But it is time to recognise that the real world evidence, not to mention our own development history, shows the costs and benefits of liberalisation to be a good deal more complex than that presented by economic textbooks and industry lobbyists.
The World Development Movement calls on all policymakers within the European Parliament, European Commission and member states to rethink Europe's external trade strategy so that it contributes to, rather than conflicts with, the achievement of sustainable development.
Benedict Southworth, Director, World Development Movement
China rejects European criticism of its policies towards Africa
China's Foreign Ministry called for the European Parliament to stop confrontationist and provocative activities and do more things conducive to the development of Sino-European relations.
Spokeswoman Jiang Yu told a press conference on April 24 that China noticed the "irresponsible" criticism the European Parliament had made recently against China's policy towards Africa. She said African countries and their people were the best parties to make judgement on China's Africa policy and Sino-African relations. "They all support China-Africa cooperation because the cooperation is beneficial for the development of both sides," Jiang said.
In a recent resolution, the European Parliament said China's influence in Africa was growing rapidly while the European Union (EU) was losing out.
Jiang pointed out China-Africa cooperation began more than half a century ago, instead of today when oil prices are rising. China has been carrying out cooperation with Africa as true friends on equal footing. It respects African countries' right to choose their own routes of development and will never impose its own value on others or use assistance as a tool of pressure.
Jiang said the European Parliament's comment on energy cooperation between China and Africa was "totally unfounded." She noted that the scale and quality of energy cooperation between China and Africa were a far cry from that between Africa and some countries from the European Union and America. The European Union and the United States, respectively, accounted for 36 percent and 33 percent of Africa's total oil exports. China only accounted for 8.7 percent.
With regard to arms sales from China to African countries mentioned in the resolution, Jiang said it was very clear the Chinese government always strictly abided by UN-relevant resolutions. It never sold weapons to countries and regions embargoed by the UN Security Council. The criticism of the European Parliament was totally "groundless and irresponsible."
Project assists ACP countries with trade negotiation skills
The 'Hub and Spokes' project aims to strengthen the ability of African, Caribbean and Pacific countries to formulate and implement trade policies. The project seeks to assist African, Caribbean and Pacific (ACP) countries better understand the dynamics of international trade negotiations and in the process enter into trade regimes that are of benefit to their economies.
It is a joint initiative run by the Commonwealth Secretariat, the European Commission and the Organisation Internationale de la Francophonie, with support from the ACP Secretariat.
Sharifa Powell is one of the 25 trade policy analysts, or 'Spokes', deployed to different ACP country capitals and six regional trade policy advisers, or 'Hubs', attached to regional integration organisation secretariats in East and Southern Africa, Caribbean and Pacific countries, and the African Union Commission. She was recruited just less than one year ago and posted to Gaborone to support Botswana in its trade policy objectives.
Ms Powell had travelled to Cape Town with a delegation from Botswana led by the Trade Minister, Neo Moroka, to participate in the High Level Technical Meeting on 7 and 8 April 2008 where discussions focused on the implications of the European Union's new trading regime with ACP countries, called the Economic Partnership Agreements (EPAs). The new EPAs are expected to form strong ties between ACP and EU countries.
One of the challenges many Commonwealth ACP countries face in these trade negotiations is the lack of enough technical expertise to help them unravel the complexities involved in the negotiation processes.
After completing her masters degree in international trade in The Bahamas, Ms Powell worked with the Caribbean Regional Negotiation Machinery, before heading down to Botswana for her posting at the Ministry of Trade. Her contribution to understanding trade policy issues is well recognised by officials in Botswana.
"We are very happy and pleased with what the 'spoke' has been doing. She has helped us a lot to unravel the difficult and complex technical issues to translate them into a layman's language," says Bany Molosiwa, the Permanent Secretary of Trade and Industry of Botswana. "She has also helped us to analyse and advise us on our trade negotiation positions. Because of the absence of such critical skilled personnel in the country, we have found ourselves making Ms Powell almost become a jack of all trades, advising us on any trade-related issues. But we would now like her to concentrate on imparting skills to our trade officials so that their capacity is enhanced."
According to Nimrod Waniala, the programme manager from the Commonwealth Secretariat, the project, which forms part of the European Commission's Trade.Com Facility, seeks to promote the effective participation of ACP countries in international trade negotiations and to strengthen their capacity to formulate and implement trade policies.
The 'Hub and Spokes' project has three main components:
* Training and sensitisation of key stakeholders in ACP countries on major trade policy issues in order to enhance their ability to engage effectively in trade negotiations.* Supporting ACP countries in the establishment of multi-stakeholder trade negotiation and consultative networks at national and regional levels to be actively used to define trade policy and negotiation positions.* Supporting ACP countries in the analysis of trade data to inform negotiating positions, backstopping negotiations and in the implementation of trade policies.
allafrica.com
Malawi wary of signing EPA
While the European Union (EU) has wanted a conclusion to the economic partnership agreements (EPAs) as soon as possible, the Malawian government has been staving off a deal.
The deadline for EPAs at the end of last year passed without Malawi signing -- in contrast to other African states such as Ghana, Cote d’Ivoire and the members of the Southern African Customs Union, excluding South Africa. The Malawi government indicated that it was taking its time considering the implications of the EPAs, for fear of getting bound to an agreement that might not be good for the nation.
The EPAs are deals aimed at liberalising trade between the EU and African, Caribbean and Pacific (ACP) countries.
Secretary for Trade Newby Kumwembe said, The EPA is not a temporary agreement. This is something that Malawi is going to live with for a very long time. We cannot therefore rush to make a decision that might make us have regrets at a later stage.’’ The trade ministry, which has been directly involved in the trade negotiations, needs to ...consult the whole state machinery. Kumwembe mentioned the country’s foreign affairs ministry and the cabinet as some of the important groups that have to scrutinise and recommend on whether the country should sign an EPA or not.
Malawi government consultations can take ‘‘very long’’ and no timeframe has been set for a decision to be made. ‘‘It may take some time before we know for sure what we’re going to do on the EPA,’’ said Kumwembe.
At the beginning of this month Malawi’s President Bingu wa Mutharika said at a press conference that he will not allow Malawi to sign the EPA because it will not benefit Malawians. Instead, it is expected to be harmful to the country. Mutharika went as far as to accuse the EU of ‘‘imperialism.’’ He was critical of the EU’s stance that EPA signatories will be assisted with money from the European Development Fund (EDF).
‘‘This is imperialism by the EU which we must fight against because the EDF funding has nothing to do with EPA conditionalities. They are doing this in order to punish those that who are not signing their agreements. Now, if the agreement is so good, why do they have to force people to sign?’’ asked Mutharika.
The government’s decision could mean that it is bowing to the pressure mounted by 10 of the country’s most influential non-governmental (NGOs). They have been protesting against the signing of the EPA in its current form since early last year. In April 2007 five civil society organisations wrote to EU president Angela Merkel, arguing that the EPAs will prevent Malawi and other poor countries to protect their domestic industries with tariffs and other means.
The Malawi Economic Justice Network (MEJN), consisting of NGOs advocating economic justice, is one of the organisations that have been against the signing of the EPAs. Its Executive director, Andrew Kumbatira, said ‘‘the government should not sign this trade agreement in its current form. Critical issues of development and supply side constraints have not been addressed to Malawi’s satisfaction.’’ He said Malawi would need a capital injection of up to 5.7 billion euros to counter the supply-side constraints and other adjustment costs if it were to benefit from the proposed EPA trading framework.
‘‘But there are no clear agreements in the current form of the EPA on how these resources will be made available to us,’’ said Kumbatira. Without the resources, Malawi would be fully exposed to the shocks that take place in the commodities markets from time to time. Kumbatira also said the EU wants to tie Malawians into an agreement that reduces the country’s policy space to consider other and more profitable economic agreements with other regions.
‘‘Asia is an upcoming major economic power which might potentially be a better alternative for Malawi,’’ said Kumbatira. He was worried that Malawi was being asked, under the EPAs, to liberalise 80 percent of all its trade with the EU. ‘‘This means that the Malawian market will be put in direct competition with the European market. This will be very unfair for our small country as we are just an emerging economy. The EPAs could easily destroy the great potential to grow we have.’’
Interestingly, Malawi’s parliamentary committee on trade had already approved the signing of the interim EPA on trade in goods. The temporary deal is aimed at averting disruption of trade between African countries and the EU, following the expiry of the Cotonou Agreement at the end of last year. The signing of the EPAs was initially slated for the end of last year but ministers from the Eastern and Southern Africa (ESA) region, of which Malawi is part, said at the ESA-European Commission ministerial negotiating meeting in Brussels in November last year that it was not practical to do so.
Kumbatira said at the Brussels meeting African leaders called for more work in the negotiations until they can be reviewed.
IPS
The deadline for EPAs at the end of last year passed without Malawi signing -- in contrast to other African states such as Ghana, Cote d’Ivoire and the members of the Southern African Customs Union, excluding South Africa. The Malawi government indicated that it was taking its time considering the implications of the EPAs, for fear of getting bound to an agreement that might not be good for the nation.
The EPAs are deals aimed at liberalising trade between the EU and African, Caribbean and Pacific (ACP) countries.
Secretary for Trade Newby Kumwembe said, The EPA is not a temporary agreement. This is something that Malawi is going to live with for a very long time. We cannot therefore rush to make a decision that might make us have regrets at a later stage.’’ The trade ministry, which has been directly involved in the trade negotiations, needs to ...consult the whole state machinery. Kumwembe mentioned the country’s foreign affairs ministry and the cabinet as some of the important groups that have to scrutinise and recommend on whether the country should sign an EPA or not.
Malawi government consultations can take ‘‘very long’’ and no timeframe has been set for a decision to be made. ‘‘It may take some time before we know for sure what we’re going to do on the EPA,’’ said Kumwembe.
At the beginning of this month Malawi’s President Bingu wa Mutharika said at a press conference that he will not allow Malawi to sign the EPA because it will not benefit Malawians. Instead, it is expected to be harmful to the country. Mutharika went as far as to accuse the EU of ‘‘imperialism.’’ He was critical of the EU’s stance that EPA signatories will be assisted with money from the European Development Fund (EDF).
‘‘This is imperialism by the EU which we must fight against because the EDF funding has nothing to do with EPA conditionalities. They are doing this in order to punish those that who are not signing their agreements. Now, if the agreement is so good, why do they have to force people to sign?’’ asked Mutharika.
The government’s decision could mean that it is bowing to the pressure mounted by 10 of the country’s most influential non-governmental (NGOs). They have been protesting against the signing of the EPA in its current form since early last year. In April 2007 five civil society organisations wrote to EU president Angela Merkel, arguing that the EPAs will prevent Malawi and other poor countries to protect their domestic industries with tariffs and other means.
The Malawi Economic Justice Network (MEJN), consisting of NGOs advocating economic justice, is one of the organisations that have been against the signing of the EPAs. Its Executive director, Andrew Kumbatira, said ‘‘the government should not sign this trade agreement in its current form. Critical issues of development and supply side constraints have not been addressed to Malawi’s satisfaction.’’ He said Malawi would need a capital injection of up to 5.7 billion euros to counter the supply-side constraints and other adjustment costs if it were to benefit from the proposed EPA trading framework.
‘‘But there are no clear agreements in the current form of the EPA on how these resources will be made available to us,’’ said Kumbatira. Without the resources, Malawi would be fully exposed to the shocks that take place in the commodities markets from time to time. Kumbatira also said the EU wants to tie Malawians into an agreement that reduces the country’s policy space to consider other and more profitable economic agreements with other regions.
‘‘Asia is an upcoming major economic power which might potentially be a better alternative for Malawi,’’ said Kumbatira. He was worried that Malawi was being asked, under the EPAs, to liberalise 80 percent of all its trade with the EU. ‘‘This means that the Malawian market will be put in direct competition with the European market. This will be very unfair for our small country as we are just an emerging economy. The EPAs could easily destroy the great potential to grow we have.’’
Interestingly, Malawi’s parliamentary committee on trade had already approved the signing of the interim EPA on trade in goods. The temporary deal is aimed at averting disruption of trade between African countries and the EU, following the expiry of the Cotonou Agreement at the end of last year. The signing of the EPAs was initially slated for the end of last year but ministers from the Eastern and Southern Africa (ESA) region, of which Malawi is part, said at the ESA-European Commission ministerial negotiating meeting in Brussels in November last year that it was not practical to do so.
Kumbatira said at the Brussels meeting African leaders called for more work in the negotiations until they can be reviewed.
IPS
French position on EPAs unclear
As it prepares to assume the presidency of the European Union in July, one of the main issues on France’s agenda will be the economic partnership agreements (EPAs). But with less than three months to go, France’s official position concerning EPAs is still surprisingly unclear.
Officially, it is the European Commission sitting in Brussels which holds the mandate to negotiate EPAs with African, Caribbean and Pacific (ACP) countries on behalf of all members of the European Union (EU). ‘‘This has been used as a convenient excuse for France not to take sides in the debate for or against EPAs,’’ says Jean-Denis Crola, responsible for Oxfam France’s economic justice campaign.
‘‘States are hiding behind the European Commission, which puts unbearable pressure on ACP countries to sign these EPAs,’’ Crola says. ‘‘Officially, France’s policy towards ACP countries is in favour of their economic development. However, the current government has not voiced its official stance on a single occasion,’’ according to Crola. ‘‘The government has managed to dodge direct questions on EPAs,’’ he adds.
According to an official at the ministry of foreign affairs, who spoke on condition of anonymity, France is eager to ‘‘ensure privileged access to European markets for ACP countries’ products, in compliance with World Trade Organisation rules.’’
However, under the formula currently favoured by Brussels, the liberalisation of trade in goods and services between the EU and ACP countries would be reciprocal, thus exposing ACP economies to direct and overwhelming competition from European exports and companies.
‘‘It’s very hard to figure out what the government’s position is, as it hides behind the European Commission,’’ concurs Frédéric Viale of the Association for the Taxation of Financial Transaction to Aid Citizens (known by its French acronym ATTAC). ATTAC is an NGO which promotes alternatives to neo-liberalism. ‘‘The matter is complicated by the fact that several French ministries are competent to address the issue of EPAs, and they appear to have conflicting views,’’ Viale says.
The ministry of foreign affairs, the ministry of agriculture and the ministry of foreign Trade all have a say in trade agreements.
... it is still unclear how and when the French presidency will arbitrate between the conflicting agendas, but the ministry for agriculture’s position has always been unmistakably clear.
‘‘The ministry of agriculture has steadily been pushing for EPAs to be signed in their current form, as it wants to secure more markets for French products,’’ says Viale. ‘‘These debates within the government are not public, and dissenting voices are rarely heard. At the end of the day France’s position is aligned with that of the European Commission,’’ according to Viale.
The fact that French media largely ignores these issues does not help in shaping public opinion. ‘‘The issue of EPAs has never made the headlines in France,’’ says Viale.
There has also been a contradiction between the Commission’s approach and the French ministry of foreign affairs’ approach. Brussels has been able to apply a ‘‘divide and rule’’ approach to discussing EPAs. Bilateral negotiations between the EU and individual ACP countries are extraordinarily unbalanced, and developing countries can hardly resist the pressure to sign unfavourable treaties.
The French ministry of foreign affairs says, ‘‘France is especially committed to the regional integration efforts many ACP countries undertake and supports regional talks for negotiating EPAs.’’
However, this does not apply to Brussels’s strategy. ‘‘The EU aims at dividing ACP countries, by negotiating different agreements covering different goods and services for each country,’’ says Viale.
Crola was hopeful that some of these issues would be answered by European governments at the United Nations Conference on Trade and Development meeting currently underway in Accra, Ghana.
IPS
Officially, it is the European Commission sitting in Brussels which holds the mandate to negotiate EPAs with African, Caribbean and Pacific (ACP) countries on behalf of all members of the European Union (EU). ‘‘This has been used as a convenient excuse for France not to take sides in the debate for or against EPAs,’’ says Jean-Denis Crola, responsible for Oxfam France’s economic justice campaign.
‘‘States are hiding behind the European Commission, which puts unbearable pressure on ACP countries to sign these EPAs,’’ Crola says. ‘‘Officially, France’s policy towards ACP countries is in favour of their economic development. However, the current government has not voiced its official stance on a single occasion,’’ according to Crola. ‘‘The government has managed to dodge direct questions on EPAs,’’ he adds.
According to an official at the ministry of foreign affairs, who spoke on condition of anonymity, France is eager to ‘‘ensure privileged access to European markets for ACP countries’ products, in compliance with World Trade Organisation rules.’’
However, under the formula currently favoured by Brussels, the liberalisation of trade in goods and services between the EU and ACP countries would be reciprocal, thus exposing ACP economies to direct and overwhelming competition from European exports and companies.
‘‘It’s very hard to figure out what the government’s position is, as it hides behind the European Commission,’’ concurs Frédéric Viale of the Association for the Taxation of Financial Transaction to Aid Citizens (known by its French acronym ATTAC). ATTAC is an NGO which promotes alternatives to neo-liberalism. ‘‘The matter is complicated by the fact that several French ministries are competent to address the issue of EPAs, and they appear to have conflicting views,’’ Viale says.
The ministry of foreign affairs, the ministry of agriculture and the ministry of foreign Trade all have a say in trade agreements.
... it is still unclear how and when the French presidency will arbitrate between the conflicting agendas, but the ministry for agriculture’s position has always been unmistakably clear.
‘‘The ministry of agriculture has steadily been pushing for EPAs to be signed in their current form, as it wants to secure more markets for French products,’’ says Viale. ‘‘These debates within the government are not public, and dissenting voices are rarely heard. At the end of the day France’s position is aligned with that of the European Commission,’’ according to Viale.
The fact that French media largely ignores these issues does not help in shaping public opinion. ‘‘The issue of EPAs has never made the headlines in France,’’ says Viale.
There has also been a contradiction between the Commission’s approach and the French ministry of foreign affairs’ approach. Brussels has been able to apply a ‘‘divide and rule’’ approach to discussing EPAs. Bilateral negotiations between the EU and individual ACP countries are extraordinarily unbalanced, and developing countries can hardly resist the pressure to sign unfavourable treaties.
The French ministry of foreign affairs says, ‘‘France is especially committed to the regional integration efforts many ACP countries undertake and supports regional talks for negotiating EPAs.’’
However, this does not apply to Brussels’s strategy. ‘‘The EU aims at dividing ACP countries, by negotiating different agreements covering different goods and services for each country,’’ says Viale.
Crola was hopeful that some of these issues would be answered by European governments at the United Nations Conference on Trade and Development meeting currently underway in Accra, Ghana.
IPS
Ghana to amend mining laws for the country's benefit
Ghana will amend its laws to reap more benefit from its mining sector and the government may take a more direct role in the sector, Mining Minister Esther Obeng Dapaah said on April 23.
Addressing a meeting of the UN Conference on Trade and Development (UNCTAD) in the l Accra, Dapaah said the West African country also aimed to diversify the sector away from its traditional reliance on gold.
Ghana is Africa's second-largest gold producer, behind South Africa, and multinationals such as AngloGold Ashanti Ltd. and Newmont Mining Corp. are active in the former British colony.
"Our laws will have to be amended. At the moment the laws are so liberal. The idea was to attract investment but we are willing to take a look at our laws again," the minister told delegates at a forum on how developing nations can benefit more from high commodities prices.
"The mining industry must move from being an enclosure to being fully integrated into the Ghanaian local economy," Dapaah said, citing what she called low levels of employment generated by the sector. "Tax revenues are minimal. The nation hardly benefits from high mineral prices," she added.
"Either we want to give concessions out and take the royalties, or to actually get involved in the mining industry," Dapaah said. The minister said that PresidentJohn Kufuor's government would like to better determine how foreign companies calculated the profits on which they paid taxes, as it had no idea how these figures were reached at present. She cited the example of Zimbabwe where the government was trying to amend laws preventing an increase in mining royalties.
Dapaah said that Ghana had relied too much on the exploitation of gold, diamonds, bauxite and manganese and aimed to move into production of others minerals such as kaolin, limestone, salt and coltan. Coltan is used in the production of electronic items such as DVDs, cellphones and computers.
April 23, 2008
African Development Bank to lend $1.5 billion for infrastructure
The African Development Bank (AfDB) will give $1,5-billion to five countries in east Africa to improve roads, bridges and railways over the next three years, the bank's regional head said.
Three of the five countries in the regional bloc, -- Uganda, Burundi, and Rwanda -- are landlocked and rely on Kenya's Mombasa and Tanzania's Dar es salaam ports to export and import essential goods.
Goods then travel over a patchwork of potholed roads and ancient rail tracks, leading to astronomic transportation costs.
"Infrastructure is the key to poverty reduction in this region. We are thinking about $1,5-billion over the next three years," said Aloysius Ordu, AfDB's director for east Africa. He said the money will go towards the construction of roads, railways and bridges, which will enhance the countries' connections.
The five countries have been moving towards economic, political and social integration under the East African Community regional body. But poor infrastructure and political uncertainties have been a deterrent to investors, due to increased risk and cost of doing business.
The Tunis-based AfDB was established 40 years ago to combat poverty and improve lives in Africa through loans, investments and technical assistance.
Engineering News
Three of the five countries in the regional bloc, -- Uganda, Burundi, and Rwanda -- are landlocked and rely on Kenya's Mombasa and Tanzania's Dar es salaam ports to export and import essential goods.
Goods then travel over a patchwork of potholed roads and ancient rail tracks, leading to astronomic transportation costs.
"Infrastructure is the key to poverty reduction in this region. We are thinking about $1,5-billion over the next three years," said Aloysius Ordu, AfDB's director for east Africa. He said the money will go towards the construction of roads, railways and bridges, which will enhance the countries' connections.
The five countries have been moving towards economic, political and social integration under the East African Community regional body. But poor infrastructure and political uncertainties have been a deterrent to investors, due to increased risk and cost of doing business.
The Tunis-based AfDB was established 40 years ago to combat poverty and improve lives in Africa through loans, investments and technical assistance.
Engineering News
April 21, 2008
Investors stick with Africa despite challenges and bad news obsession of Western media
Africa was becoming an increasingly "sticky" investment destination for international investors, said asset management company Stanlib on April 21, and added that investors "no longer become unglued by local difficulties or cut-and-run when Western media focus on bad news."
In August last year, Stanlib launched the Dublin-domiciled Standard Africa Equity Fund, and the company said that since its establishment, the Africa-wide fund has attracted inflows of more than $250-million while achieving a dollar-denominated return of 23,50%.
"Inflows were maintained throughout the Kenya crisis and a dip in performance on East African equity markets. Stickability was maintained even though there are no penalties for early fund exit, and there are no lock-in periods," the company said.
"International investors not only appreciate Africa's low correlation with major centres, they are also aware of low correlation between individual jurisdictions within Africa. Each is affected by distinct dynamics. A glitch in one market is not a symptom of a wider malaise," fund manager Stephane Bwakira commented.
"It is apparent that the new generation of investors in Africa is well informed and has made a strategic commitment that won't come unstuck every time an individual jurisdiction has to deal with a local setback," Bwakira added.
Africa's new adherents had been rewarded by significant outperformance. Gains by the Standard Africa Equity Fund were three times higher than the 8,02% gain recorded over the same period by the MSCI Global Emerging Markets Index.
The Stanlib portfolio currently contains shares in 48 companies across six industry sectors in nine African countries. The mandate permitted investment in up to 16 African equity markets.
Africa's potential for generating high rates attracted 'first movers' with a big appetite for risk. West European pension funds also showed growing interest.
It was apparent that the wait-and-see period was over - in Europe certainly, but also in the Gulf and Asia. In the last decade there has been sustained high performance in numerous African markets, and investors who hesitated initially, now wanted to get involved.
"Investors seek reassurance in the form of credible research and on-the-ground experience of the markets in question," said Bwakira.
EU seeks to entrench economic dominance over poor countries, study finds
The European Union is using trade policy to ensure that western firms enjoy considerable leverage over the economies of poor countries, a new report has alleged.
In 2006, the European Commission published a strategy known as Global Europe, which stated that its international trade agenda should strive to remove any obstacles that the bloc's companies encounter in doing business abroad.
A study published Apr. 21 by the World Development Movement (WDM) argues that the blueprint is "about as close as it is possible to get to a plan for entrenching European economic dominance without using the military."
The WDM, a London-based anti-poverty group, likens the actions recommended in the EU's strategy to those taken by Europe's imperial powers in the 19th and early 20th centuries. During that era, Britain foisted free trade on its colonies, for example, by banning them from taxing imports.
Tim Jones, a WDM campaigner and the report's author, said that Global Europe "marks a turning point" for EU trade strategy. Until then, the EU had presented trade liberalisation as advantageous for poor countries and their development. "In Global Europe by contrast, much of the development rhetoric has been ditched and a more brazen strategy to open markets for the benefit of European business has been set out," he added.
But he also suggested that previous arguments about the purported benefits of free trade can be exposed as hollow, when the situations facing countries like South Africa and Mexico are examined.
Through an accord between the EU and Mexico that came into effect in 2000, foreign firms have been able to gain control of key sectors of the Mexican economy, such as banking and electricity. Some 553 million euros (878 million dollars) in profit was reaped by European energy companies operating in Mexico during 2006, without any requirement that they have to re-invest any of their revenues in the country.
A similar deal that the EU signed with South Africa in 1999 was found to have benefited the former, but disadvantaged the latter. Under the accord, the EU did not have to cut any of the trade taxes it levied on wine, one of South Africa's main exports. But South Africa was required to begin reducing its tariffs on European wine in 2004 and to scrap them completely by 2012.
The study also finds that a surge in certain types of imports has proved detrimental to jobs in South Africa, a country where 40 percent of the labour force is unemployed. After tariffs on imported confectionery began to be reduced -- as required by the agreement -- in 2004, employment in South Africa's sweets industry dropped by 24 percent that year.
The Global Europe strategy was debated at a conference in Brussels earlier this month.
Charles Santiago, a member of parliament in Malaysia, told the conference that the EU is seeking to use free trade accords negotiated on a bilateral basis with poor countries to coax them into accepting provisions that have been removed from the agenda of multilateral discussions held under the aegis of the World Trade Organisation.
Bilateral accords, he said, "provide an avenue where developed countries isolate individual countries." He added: "This is not about promoting trade and promoting investment. It is about control of trade."
Santiago noted that the EU is seeking to conclude free trade accords with South Korea, India and the Association of South East Asian Nations (ASEAN). In the case of Korea, it has been estimated that a free trade accord would lead EU exports to Korea to rise by more than 13 percent. But Korean exports to the EU would only increase by 2.5 percent.
The consequences for agriculture would be disastrous if free trade agreements are introduced with different parts of Asia. "If tariffs are eliminated, the Korean dairy and pork industries will be destroyed (by imports of subsidised European food)," he said. "Asia can kiss goodbye to the family farmer."
In a separate report, also published Apr. 21, Oxfam predicted that the so-called Economic Partnership Agreements that the EU is negotiating with African and Pacific countries could cause "irrevocable damage."
Last week Peter Mandelson, the European commissioner for trade, defended the EPAs which he has so far reached with 18 African governments. Mandelson refused to renegotiate any of the commitments contained in them, citing concerns that doing so would cause "legal uncertainty and risk unravelling everything we have achieved."
But Oxfam suggests that claims made by Mandelson about the agreements are bogus.
While the European Commission had promised that African countries would be allowed up to 25 years to fully open their markets to imports, such a transition period has only been granted to a small number of states and for a small number of products, it says.
Mouhamet Lamine Ndiaye, an Oxfam spokesman, said that the tariff reductions required by the EPAs could deprive Africa of 360 million dollars per year in government revenues.
"Our analysis shows that these deals have strayed far from the development template they were supposed to follow," said Ndiaye. "The cost will be enormous."
IPS
In 2006, the European Commission published a strategy known as Global Europe, which stated that its international trade agenda should strive to remove any obstacles that the bloc's companies encounter in doing business abroad.
A study published Apr. 21 by the World Development Movement (WDM) argues that the blueprint is "about as close as it is possible to get to a plan for entrenching European economic dominance without using the military."
The WDM, a London-based anti-poverty group, likens the actions recommended in the EU's strategy to those taken by Europe's imperial powers in the 19th and early 20th centuries. During that era, Britain foisted free trade on its colonies, for example, by banning them from taxing imports.
Tim Jones, a WDM campaigner and the report's author, said that Global Europe "marks a turning point" for EU trade strategy. Until then, the EU had presented trade liberalisation as advantageous for poor countries and their development. "In Global Europe by contrast, much of the development rhetoric has been ditched and a more brazen strategy to open markets for the benefit of European business has been set out," he added.
But he also suggested that previous arguments about the purported benefits of free trade can be exposed as hollow, when the situations facing countries like South Africa and Mexico are examined.
Through an accord between the EU and Mexico that came into effect in 2000, foreign firms have been able to gain control of key sectors of the Mexican economy, such as banking and electricity. Some 553 million euros (878 million dollars) in profit was reaped by European energy companies operating in Mexico during 2006, without any requirement that they have to re-invest any of their revenues in the country.
A similar deal that the EU signed with South Africa in 1999 was found to have benefited the former, but disadvantaged the latter. Under the accord, the EU did not have to cut any of the trade taxes it levied on wine, one of South Africa's main exports. But South Africa was required to begin reducing its tariffs on European wine in 2004 and to scrap them completely by 2012.
The study also finds that a surge in certain types of imports has proved detrimental to jobs in South Africa, a country where 40 percent of the labour force is unemployed. After tariffs on imported confectionery began to be reduced -- as required by the agreement -- in 2004, employment in South Africa's sweets industry dropped by 24 percent that year.
The Global Europe strategy was debated at a conference in Brussels earlier this month.
Charles Santiago, a member of parliament in Malaysia, told the conference that the EU is seeking to use free trade accords negotiated on a bilateral basis with poor countries to coax them into accepting provisions that have been removed from the agenda of multilateral discussions held under the aegis of the World Trade Organisation.
Bilateral accords, he said, "provide an avenue where developed countries isolate individual countries." He added: "This is not about promoting trade and promoting investment. It is about control of trade."
Santiago noted that the EU is seeking to conclude free trade accords with South Korea, India and the Association of South East Asian Nations (ASEAN). In the case of Korea, it has been estimated that a free trade accord would lead EU exports to Korea to rise by more than 13 percent. But Korean exports to the EU would only increase by 2.5 percent.
The consequences for agriculture would be disastrous if free trade agreements are introduced with different parts of Asia. "If tariffs are eliminated, the Korean dairy and pork industries will be destroyed (by imports of subsidised European food)," he said. "Asia can kiss goodbye to the family farmer."
In a separate report, also published Apr. 21, Oxfam predicted that the so-called Economic Partnership Agreements that the EU is negotiating with African and Pacific countries could cause "irrevocable damage."
Last week Peter Mandelson, the European commissioner for trade, defended the EPAs which he has so far reached with 18 African governments. Mandelson refused to renegotiate any of the commitments contained in them, citing concerns that doing so would cause "legal uncertainty and risk unravelling everything we have achieved."
But Oxfam suggests that claims made by Mandelson about the agreements are bogus.
While the European Commission had promised that African countries would be allowed up to 25 years to fully open their markets to imports, such a transition period has only been granted to a small number of states and for a small number of products, it says.
Mouhamet Lamine Ndiaye, an Oxfam spokesman, said that the tariff reductions required by the EPAs could deprive Africa of 360 million dollars per year in government revenues.
"Our analysis shows that these deals have strayed far from the development template they were supposed to follow," said Ndiaye. "The cost will be enormous."
IPS
China to increase trade with Africa to $100 billion by 2010
Chinese diplomats in Paris revealed on April 21 that the People’s Republic of China has plans to soon increase its trade with Africa.
“One of the essential goals of China is to increase to US$100 billion, in 2010, the trade volume with Africa,” Chinese diplomat specialized on Africa, Hongyi Wang, revealed.
That would represent a more important amount compared to the 2002-2007 period, during which Sino- African trade had recorded over 30 percent rise.
“The increase in trade is one of the priorities for both China and Africa,” explained ,who is also the Deputy Director of the underdeveloped world studies department at the China Institute of Studies (CIIS). “This is why the government decided to encourage Chinese companies to increase imports from Africa, and at the same time extend tariff treatments of the rural customs rates to most products imported from Africa,” he added.
Furthermore, China intends to strengthen its investment co-operations with Africa continent. Thus, it will encourage its “successful and credible” companies to invest and settle in African countries, but also to transfer “their management techniques, practices and experiences.”
“The Chinese government has decided to create a Sino-African development fund in the capitals. This US$5 billion fund will be used to direct the Chinese companies coming to invest in Africa,” Wang indicated.
The increment in training African human resources also appears in the indicators of the economic establishment of China in Africa as the Chinese companies toil to find local workforce, but also because “the African countries want to promote their human resources in order to build their capacities.”
Thus, the diplomat indicates, China will gradually increase the number of scholarships so that Africans can be trained and return to their respective countries to contribute to the development of their continent.
Excessive red tape hampers intra-SADC trade
Regulatory requirements and other non-tariff barriers continue to add to trade costs throughout the Southern African Development Community (SADC), according to recent studies.
"The findings echo increasing concerns about the adverse impacts of administrative barriers on regional trade flows," the Southern Africa Global Competitiveness Hub says in its April newsletter.
The Gaborone-based organisation is a US-government initiative to improve the region's international trade, not only with the US, but also intra-regional trade.
A study of trade along the Gaborone-Durban transport corridor, which links Botswana to the South African port, estimated the costs associated with toll roads, customs clearance procedures and delays at border posts to be 25 percent of the total transport costs.
"However, this estimate was considered conservative and the true figure could be as high as 37 percent..." the Hub says.
The main author of the studies which were commissioned by the South African Institute for International Affairs (SAIIA), was Gregory Mthembu-Slater, an independent economist and political analyst based in Cape Town.
"Truck queues to enter Durban Port can extend for five kilometres, resulting in delays of three to six hours at a cost per truck of R300 ($38) per hour," he says.
Another study analysed the costs of transporting goods along Beit Bridge, the main border crossing between Zimbabwe and South Africa. It took commercial vehicles up to 53 hours to obtain a single permit to cross South Africa to Zimbabwe and up to 83 hours to obtain a multiple-entry permit.
Mthembu-Slater acknowledges that costs vary from one transport corridor to another but points out that the studies provide some indication of the magnitude of these costs which, he says, are largely ignored by governments in the region.
IOL
"The findings echo increasing concerns about the adverse impacts of administrative barriers on regional trade flows," the Southern Africa Global Competitiveness Hub says in its April newsletter.
The Gaborone-based organisation is a US-government initiative to improve the region's international trade, not only with the US, but also intra-regional trade.
A study of trade along the Gaborone-Durban transport corridor, which links Botswana to the South African port, estimated the costs associated with toll roads, customs clearance procedures and delays at border posts to be 25 percent of the total transport costs.
"However, this estimate was considered conservative and the true figure could be as high as 37 percent..." the Hub says.
The main author of the studies which were commissioned by the South African Institute for International Affairs (SAIIA), was Gregory Mthembu-Slater, an independent economist and political analyst based in Cape Town.
"Truck queues to enter Durban Port can extend for five kilometres, resulting in delays of three to six hours at a cost per truck of R300 ($38) per hour," he says.
Another study analysed the costs of transporting goods along Beit Bridge, the main border crossing between Zimbabwe and South Africa. It took commercial vehicles up to 53 hours to obtain a single permit to cross South Africa to Zimbabwe and up to 83 hours to obtain a multiple-entry permit.
Mthembu-Slater acknowledges that costs vary from one transport corridor to another but points out that the studies provide some indication of the magnitude of these costs which, he says, are largely ignored by governments in the region.
IOL
April 18, 2008
EU tries to charm Africa into signing EPAs after arm-twisting backfires
After attracting a steady flow of criticism for its handling of trade talks with Africa, the European Commission has gone on something of a charm offensive lately.
It has, for example, launched a website dedicated to highlighting any favourable comments that are made about the economic partnership agreements (EPAs) it is negotiating with some of the world's poorest countries.
This follows the realisation by Brussels officials that the way EPAs have been attacked by anti-poverty campaigners, employers, farmers and many governments in Africa has sullied the Commission's reputation. One official has gone so far as to describe the talks as a "public relations disaster" for the Commission.
Efforts to project a more positive image appeared to bear some fruit yesterday when Peter Mandelson, the European Union commissioner for trade, hosted a seminar on the EPAs. Although it was jointly organised with the European Parliament, many of whose members have previously been scathing towards Mandelson, he was given a comparatively easy ride.
However, this may have been largely due to a stroke of luck. The African representatives who addressed the meeting hailed from Mozambique and the Ivory Coast, both of which concluded EPAs before the December 2007 deadline on which the Commission had insisted. Both participants refuted claims that regional integration in Africa had been harmed by the terms of the accords that were rejected by many of their neighbours.
Helmuth Markov, chairperson of the European Parliament's international trade committee, said that governments which have been opposed to the suggested EPAs chose not to take part. "We invited a lot of people," he said.
While 78 African, Caribbean and Pacific (ACP) countries had been involved in the trade talks, so far EPAs have been reached with just 35 of them. With the exception of the EPAs with 15 states in the Caribbean, all of the deals have been labelled as interim and are mainly confined to trade in goods.
Mandelson has defended efforts being made by the Commission to continue negotiations on the EPAs with a view to extending their scope so that they cover the liberalisation of services, as well as rules on competition and investment. One common "misunderstanding", he said, is that Europe is "trying to impose our rules on developing countries. With competition, the objective is not to make it easier for our companies to compete in overseas markets," he argued. "Rather, it is to allow the ACP to adopt rules that prevent companies from forming cartels; and to ensure that markets operate on a fair basis."
Following consultations with ACP governments, the Commission has drawn up a list of what it hopes to achieve with each region involved in the EPA talks.
For seven countries belonging to the Southern African Development Community (Angola, Botswana, Lesotho, Mozambique, Namibia, Swaziland, Tanzania), the aim is to conclude a deal on services liberalisation, competition and public procurement within the next three years. Uncertainty surrounds whether such deal would also extend to South Africa, as it already has a free trade agreement with the EU.
For the East African Community (Kenya, Uganda, Tanzania, Rwanda and Burundi), the aim is to conclude a deal relating to services, food safety, competition, investment and intellectual property. No deadline has yet been set.
For other Eastern and Southern African countries, the Commission is eyeing a deal relating to the rules of origin (which deal with the use of imported ingredients in the manufacturing of goods or processing of food), services, competition, intellectual property and agricultural trade.
And for both West and Central Africa, the aim is to conclude deals on services, competition, investment, public procurement and intellectual property by the end of this year.
While the Commission tries to present the EPAs in a positive light, the negotiations are still being analysed in minute detail by campaigning organisations.
The International Federation for Human Rights (FIDH) has recently urged the Commission to ensure that rigorous assessments of the impact of trade agreements are carried out. The FIDH is a global network of human rights organisations.
So-called sustainability impact assessments have been undertaken on the EPAs but, according to the FIDH, these have been inadequate. There is no mechanism, the group says, to guarantee that issues raised by the studies are taken into account during the talks. FIDH believes that a wider assessment would be preferable and that particular emphasis should be given to the question of whether the EU would be honouring international human rights commitments during negotiations.
Citing estimates that the elimination of import duties demanded by the EU during the EPAs could reduce the revenues of Angola, the Seychelles and the Democratic Republic of Congo by almost 40 percent, FIDH has expressed fear that the consequent increase in poverty could imperil the realisation of rights enshrined in international law. Such rights include proper access to food, water, healthcare, employment and the chance to have a decent standard of living.
Grégoire Thery, an FIDH spokesperson, said that conducting human rights assessments would not be a "very difficult task". But it would be "extremely important", he added, that a body independent of EU institutions conducts these assessments.
IPS
It has, for example, launched a website dedicated to highlighting any favourable comments that are made about the economic partnership agreements (EPAs) it is negotiating with some of the world's poorest countries.
This follows the realisation by Brussels officials that the way EPAs have been attacked by anti-poverty campaigners, employers, farmers and many governments in Africa has sullied the Commission's reputation. One official has gone so far as to describe the talks as a "public relations disaster" for the Commission.
Efforts to project a more positive image appeared to bear some fruit yesterday when Peter Mandelson, the European Union commissioner for trade, hosted a seminar on the EPAs. Although it was jointly organised with the European Parliament, many of whose members have previously been scathing towards Mandelson, he was given a comparatively easy ride.
However, this may have been largely due to a stroke of luck. The African representatives who addressed the meeting hailed from Mozambique and the Ivory Coast, both of which concluded EPAs before the December 2007 deadline on which the Commission had insisted. Both participants refuted claims that regional integration in Africa had been harmed by the terms of the accords that were rejected by many of their neighbours.
Helmuth Markov, chairperson of the European Parliament's international trade committee, said that governments which have been opposed to the suggested EPAs chose not to take part. "We invited a lot of people," he said.
While 78 African, Caribbean and Pacific (ACP) countries had been involved in the trade talks, so far EPAs have been reached with just 35 of them. With the exception of the EPAs with 15 states in the Caribbean, all of the deals have been labelled as interim and are mainly confined to trade in goods.
Mandelson has defended efforts being made by the Commission to continue negotiations on the EPAs with a view to extending their scope so that they cover the liberalisation of services, as well as rules on competition and investment. One common "misunderstanding", he said, is that Europe is "trying to impose our rules on developing countries. With competition, the objective is not to make it easier for our companies to compete in overseas markets," he argued. "Rather, it is to allow the ACP to adopt rules that prevent companies from forming cartels; and to ensure that markets operate on a fair basis."
Following consultations with ACP governments, the Commission has drawn up a list of what it hopes to achieve with each region involved in the EPA talks.
For seven countries belonging to the Southern African Development Community (Angola, Botswana, Lesotho, Mozambique, Namibia, Swaziland, Tanzania), the aim is to conclude a deal on services liberalisation, competition and public procurement within the next three years. Uncertainty surrounds whether such deal would also extend to South Africa, as it already has a free trade agreement with the EU.
For the East African Community (Kenya, Uganda, Tanzania, Rwanda and Burundi), the aim is to conclude a deal relating to services, food safety, competition, investment and intellectual property. No deadline has yet been set.
For other Eastern and Southern African countries, the Commission is eyeing a deal relating to the rules of origin (which deal with the use of imported ingredients in the manufacturing of goods or processing of food), services, competition, intellectual property and agricultural trade.
And for both West and Central Africa, the aim is to conclude deals on services, competition, investment, public procurement and intellectual property by the end of this year.
While the Commission tries to present the EPAs in a positive light, the negotiations are still being analysed in minute detail by campaigning organisations.
The International Federation for Human Rights (FIDH) has recently urged the Commission to ensure that rigorous assessments of the impact of trade agreements are carried out. The FIDH is a global network of human rights organisations.
So-called sustainability impact assessments have been undertaken on the EPAs but, according to the FIDH, these have been inadequate. There is no mechanism, the group says, to guarantee that issues raised by the studies are taken into account during the talks. FIDH believes that a wider assessment would be preferable and that particular emphasis should be given to the question of whether the EU would be honouring international human rights commitments during negotiations.
Citing estimates that the elimination of import duties demanded by the EU during the EPAs could reduce the revenues of Angola, the Seychelles and the Democratic Republic of Congo by almost 40 percent, FIDH has expressed fear that the consequent increase in poverty could imperil the realisation of rights enshrined in international law. Such rights include proper access to food, water, healthcare, employment and the chance to have a decent standard of living.
Grégoire Thery, an FIDH spokesperson, said that conducting human rights assessments would not be a "very difficult task". But it would be "extremely important", he added, that a body independent of EU institutions conducts these assessments.
IPS
April 06, 2008
China, India scramble in competition for African resources
The world’s two most populous countries, China and India, are now seriously competing with each other to engage resource-rich Africa, thereby imparting a new dimension to South-South relations.
From Apr. 7-9 New Delhi will host heads of government of 12 African nation-states and a similar number of regional economic groupings. Many see this as a modest answer by India to the grand Africa summit that Beijing hosted in 2006.
Among heads of government expected are Thabo Mbeki of South Africa, Abdelaziz Bouteflika of Algeria, Joseph Kabila Kabange of Congo, Mwai Kibaki of Kenya, John Kufuor of Ghana, Yoweri Kaguta Museveni of Uganda, Maitre Abdoulaye Wade of Senegal, Meles Zenawi of Ethiopia, Tertius Zongo of Burkina Faso and Jakaya Mrisho Kikwete of Tanzania.
The New Delhi meeting will be attended by leading functionaries of the African Union, various regional economic communities and the New Partnership for Africa’s Development. Notable absentees will be Muammar Gaddafi of Libya and Hosni Mubarak of Egypt.
While this is the first time India is organising such a large summit of African leaders, this country has had long links with the continent. "Indian traders once sold glass beads to an eager African market (and) now its expertise centres on science and technology," observes a media release of the Johannesburg-based South African Institute of International Affairs (SAIIA).
The release added: "China’s inroads into Africa are well known; India’s approach has been much quieter. The India-Africa Forum meets for the first time…offering a fresh insight into this modern-day scramble for Africa."
A government of India official told IPS, who may not be named according to briefing rules, that unlike "China’s greed for Africa’s oil, copper and other minerals", India is more interested in longer-term economic partnerships that are mutually beneficial and do not replicate colonial systems of exploitation of African wealth.
This official pointed out that India had for long supported South Africa’s anti-apartheid movement because of the personal involvement of Mohandas Karamchand Gandhi, the ‘father’ of the Indian nation, who had cut his political teeth in that country. More recently, India was the first country to send United Nations-sponsored troops to Congo.
The Indian government has, in addition, supported technical exchange and training programmes in most African countries. For more than four decades now, 1,000 individuals from sub-Saharan countries have been provided technical training in India each year. Besides, there are an estimated 15,000 students of African origin currently studying in Indian universities and educational institutions, many of them on government scholarships.
Pointing out that the "waters of the Indian Ocean united us" and that India and Africa had a "common civilisational heritage and shared experience of colonialism", India’s Minister for External Affairs Pranab Mukherjee recently said "our commitment to solutions based on common but differentiated responsibility and respective capability remains steadfast".
Ethiopia’s Minister of State for Trade and Industry Tadesse Haile, on a visit to India, last year, said this country should be a ‘’shareholder and not just a stakeholder in Africa’s development process’’.
India has participated in projects relating to rural electrification in Mozambique and Ethiopia, railways in Senegal and Mali, cement in Congo and computer training in Lesotho. Indian companies are involved in building Ghana’s National Assembly and military barracks in Sierra Leone.
Private corporate groups in India have had long-standing ties with African countries. For instance, the Tata group has a presence in 14 countries in areas such as hotels, telecommunications, hydro power and transportation. The word ‘Tata’ is synonymous with ‘bus’ in a country like Uganda, writes Seema Sirohi, Indian journalist for the ‘Outlook’ magazine who was recently in Johannesburg.
Indian pharmaceutical manufacturer Cipla has led the way in supplying inexpensive generic anti-AIDS drugs to African countries in the teeth of opposition from Western multinational corporations. Other Indian business groups have made major investments in Africa in the areas of information technology, hospitality, electrical equipment, and hospitals.
Senior journalist Neerja Chowdhury told IPS: "India had ignored its natural allies in Africa for a long time and in fact, many in this country had a rather patronising attitude towards Africa that was seen as a backward continent. Thankfully, that attitude is changing somewhat and the Indian government is re-focussing on Africa." Nevertheless, she said relations between India and Africa are "still nowhere what they should be".
While annual two-way trade between India and Africa has gone up fivefold from five billion US dollars to 25 billion dollars over the last five years, this volume is half that of Africa’s export-import trade with China. Indian officials, speaking off-the-record, say China’s economic strategy is more aggressive than that of India’s and basically aimed at capturing Africa’s mineral resources like oil, copper and manganese.
In a paper, Navdeep Suri, India’s consul-general in Johannesburg has written: "We cannot match China dollar-for-dollar nor do we have the command economy where state-owned companies can be ordered to pursue the government’s directive regardless of their own bottomline."
India’s Minister of State for External Affairs Anand Sharma, while stating that the New Delhi summit would "help the pace and spirit of historic and time-tested ties between India and Africa gather momentum", has argued that it "would not be correct" to see India-Africa relations as "competition with any other country".
Sirohi, who spoke to influential South African minister Essop Pahad, quoted him saying that while he wanted to engage with both India and China, the two countries would have to compete. "Let the best man win," he remarked.
Arun Kumar, professor of economics at New Delhi’s prestigious Jawaharlal Nehru University, told IPS in an interview that there is "considerable potential between India and Africa in the areas of agriculture, energy and sustainable exploitation of minerals". He added that the fact that persons of Indian origin had settled in large numbers in East African countries besides Libya, Sudan and Darfur, could help strengthen economic ties.
In Durban, South Africa’s foreign affairs spokesperson Ronnie Mamoepa told the Press Trust of India news agency that the New Delhi summit could not only consolidate and drive the position of developing countries in the World Trade Organisation but also lead to the "writing off (of) the debt owed to India by the poorest countries of the world, a large number of which are African countries."
What may indirectly help India, Sirohi wrote in her article in the ‘Outlook’, is that the Chinese presence in Congo and Zambia has sparked off local resentment. Trade unions have protested against China’s policy of ‘dumping’ cheap goods. Congo reportedly recently expelled 600 Chinese nationals and shut down three firms.
IPS
From Apr. 7-9 New Delhi will host heads of government of 12 African nation-states and a similar number of regional economic groupings. Many see this as a modest answer by India to the grand Africa summit that Beijing hosted in 2006.
Among heads of government expected are Thabo Mbeki of South Africa, Abdelaziz Bouteflika of Algeria, Joseph Kabila Kabange of Congo, Mwai Kibaki of Kenya, John Kufuor of Ghana, Yoweri Kaguta Museveni of Uganda, Maitre Abdoulaye Wade of Senegal, Meles Zenawi of Ethiopia, Tertius Zongo of Burkina Faso and Jakaya Mrisho Kikwete of Tanzania.
The New Delhi meeting will be attended by leading functionaries of the African Union, various regional economic communities and the New Partnership for Africa’s Development. Notable absentees will be Muammar Gaddafi of Libya and Hosni Mubarak of Egypt.
While this is the first time India is organising such a large summit of African leaders, this country has had long links with the continent. "Indian traders once sold glass beads to an eager African market (and) now its expertise centres on science and technology," observes a media release of the Johannesburg-based South African Institute of International Affairs (SAIIA).
The release added: "China’s inroads into Africa are well known; India’s approach has been much quieter. The India-Africa Forum meets for the first time…offering a fresh insight into this modern-day scramble for Africa."
A government of India official told IPS, who may not be named according to briefing rules, that unlike "China’s greed for Africa’s oil, copper and other minerals", India is more interested in longer-term economic partnerships that are mutually beneficial and do not replicate colonial systems of exploitation of African wealth.
This official pointed out that India had for long supported South Africa’s anti-apartheid movement because of the personal involvement of Mohandas Karamchand Gandhi, the ‘father’ of the Indian nation, who had cut his political teeth in that country. More recently, India was the first country to send United Nations-sponsored troops to Congo.
The Indian government has, in addition, supported technical exchange and training programmes in most African countries. For more than four decades now, 1,000 individuals from sub-Saharan countries have been provided technical training in India each year. Besides, there are an estimated 15,000 students of African origin currently studying in Indian universities and educational institutions, many of them on government scholarships.
Pointing out that the "waters of the Indian Ocean united us" and that India and Africa had a "common civilisational heritage and shared experience of colonialism", India’s Minister for External Affairs Pranab Mukherjee recently said "our commitment to solutions based on common but differentiated responsibility and respective capability remains steadfast".
Ethiopia’s Minister of State for Trade and Industry Tadesse Haile, on a visit to India, last year, said this country should be a ‘’shareholder and not just a stakeholder in Africa’s development process’’.
India has participated in projects relating to rural electrification in Mozambique and Ethiopia, railways in Senegal and Mali, cement in Congo and computer training in Lesotho. Indian companies are involved in building Ghana’s National Assembly and military barracks in Sierra Leone.
Private corporate groups in India have had long-standing ties with African countries. For instance, the Tata group has a presence in 14 countries in areas such as hotels, telecommunications, hydro power and transportation. The word ‘Tata’ is synonymous with ‘bus’ in a country like Uganda, writes Seema Sirohi, Indian journalist for the ‘Outlook’ magazine who was recently in Johannesburg.
Indian pharmaceutical manufacturer Cipla has led the way in supplying inexpensive generic anti-AIDS drugs to African countries in the teeth of opposition from Western multinational corporations. Other Indian business groups have made major investments in Africa in the areas of information technology, hospitality, electrical equipment, and hospitals.
Senior journalist Neerja Chowdhury told IPS: "India had ignored its natural allies in Africa for a long time and in fact, many in this country had a rather patronising attitude towards Africa that was seen as a backward continent. Thankfully, that attitude is changing somewhat and the Indian government is re-focussing on Africa." Nevertheless, she said relations between India and Africa are "still nowhere what they should be".
While annual two-way trade between India and Africa has gone up fivefold from five billion US dollars to 25 billion dollars over the last five years, this volume is half that of Africa’s export-import trade with China. Indian officials, speaking off-the-record, say China’s economic strategy is more aggressive than that of India’s and basically aimed at capturing Africa’s mineral resources like oil, copper and manganese.
In a paper, Navdeep Suri, India’s consul-general in Johannesburg has written: "We cannot match China dollar-for-dollar nor do we have the command economy where state-owned companies can be ordered to pursue the government’s directive regardless of their own bottomline."
India’s Minister of State for External Affairs Anand Sharma, while stating that the New Delhi summit would "help the pace and spirit of historic and time-tested ties between India and Africa gather momentum", has argued that it "would not be correct" to see India-Africa relations as "competition with any other country".
Sirohi, who spoke to influential South African minister Essop Pahad, quoted him saying that while he wanted to engage with both India and China, the two countries would have to compete. "Let the best man win," he remarked.
Arun Kumar, professor of economics at New Delhi’s prestigious Jawaharlal Nehru University, told IPS in an interview that there is "considerable potential between India and Africa in the areas of agriculture, energy and sustainable exploitation of minerals". He added that the fact that persons of Indian origin had settled in large numbers in East African countries besides Libya, Sudan and Darfur, could help strengthen economic ties.
In Durban, South Africa’s foreign affairs spokesperson Ronnie Mamoepa told the Press Trust of India news agency that the New Delhi summit could not only consolidate and drive the position of developing countries in the World Trade Organisation but also lead to the "writing off (of) the debt owed to India by the poorest countries of the world, a large number of which are African countries."
What may indirectly help India, Sirohi wrote in her article in the ‘Outlook’, is that the Chinese presence in Congo and Zambia has sparked off local resentment. Trade unions have protested against China’s policy of ‘dumping’ cheap goods. Congo reportedly recently expelled 600 Chinese nationals and shut down three firms.
IPS
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