Craig Eisele on …..

February 13, 2008

Removal of Trade Tariffs Not Solution for Continent

Removal of Trade Tariffs Not Solution for Continent

New Vision (Kampala)
OPINION
28 January 2008
Posted to the web 29 January 2008

By John Ssempebwa
Kampala
REFERENCE is made to the article titled “African Governments Should Remove Trade Tariffs”, published in The New Vision, January 9. Removing trade tariffs is no solution to Africa’s problems; it cuts government revenue, worsens trade deficits and poverty. In May 2007, the Uganda Revenue Authority (URA) collected sh228b of which sh122b was from imports.

Without import duties levied, especially on finished goods that are also produced in Uganda and ostentatious goods, how will government fund roads, hospitals, drugs and arms without donors?

Whereas Europe can depend on indirect domestic taxes levied on red light districts, casinos, tobacco and alcohol, Uganda cannot remove import duties because its per capita income is less than $400 meaning that less than 1% of all Ugandans have entered a casino.

Uganda has an increasing trade deficit of sh$1.4b. Trade deficits cause massive lay offs as imported goods subject domestically produced goods to competition, forcing sub-optimal capacity utilisation and laying off workers.

This malignant tumour in the Ugandan economy is the reason why impressive growth rates have not translated into better welfare for many Ugandans (Gross Domestic Product is an inverse function of the trade deficit).

Removal of import duties will encourage consumption of imports, worsen the trade deficit, jobs will be lost and markets for agro produce will dwindle. Poverty will worsen.

Before import duty is removed, consumers should have sufficient purchasing power to spend and pay indirect taxes without the consumer feeling the tax burden. This requires industrialisation. In fact, Europe’s industrial development was shaped by fierce protectionism called “Fortress Europe” during which Britain levied an average tariff of 32%, France developed its current agricultural protective system, Bismarck dumped the German Free Trade Policy and average industrial tariffs stood at 19% in Europe.

More so, Intra-African trade liberalisation needs a cautious approach since the EU has already signed free trade areas with leading African economies such as South Africa and Egypt.

Removing tariffs on goods from South Africa in the absence of appropriate rules of origin means offering the EU duty free market access to Uganda yet “EU” has no offensive trade interests in Uganda. Why offer a lift to a rich man who has several Rolls Royces?

The principle of asymmetry has to come into play when discussing removal of trade tariffs and any other trade controls in Africa. Some countries are at higher levels of development because of advantages bestowed upon them by European colonial masters. Full and immediate liberalisation of trade with such countries can only mean jobs lost in Uganda.

In lieu of liberalising Africa’s trade, if the EU is interested in enabling Africa to benefit from world trade, the EU must compensate Africa for the damaging effects of liberalisation implied in the Economic Partnership Agreements.

Africa’s true allies will not be those who impose liberalisation but those who help Africa adjust to the liberalisation by solving its supply side constraints, for example, building the big dam in neighbouring Congo (The dam could reduce the cost of power in Central and Eastern Africa by 50%), building an alternative route for Uganda’s imports through Tanzania.

These projects have been identified by Africa and are contained in the development matrix of the Economic Partnership Agreements Negotiations.

It is unfortunate that the EU agrees to the development matrix but hates a detailed one that identifies the costs and exact projects. Africa seems to know its problems better now. Liberalisation is surely not the solution to our problems.

The writer is the Director of Trade at the Private Sector Foundation

December 9, 2007

Senegal’s Wade Blasts EU

Europe, Africa stuck on key issues

By BARRY HATTON, Associated Press Writer

The first summit between Europe and Africa in seven years came to an acrimonious end Sunday with leaders squabbling over human rights and no progress on a looming trade pact deadline.

Old divisions surfaced at the two-day summit as leaders swapped accusations over the crises in Zimbabwe and Darfur, and postcolonial tensions deepened over free trade deals.

The World Trade Organization has ruled that the EU’s 30-year-old preferential trade agreement with Africa was unfair to other trading nations and violated international rules. New deals are meant to be finalized by Dec. 31.

Senegalese President Abdoulaye Wade said most African leaders had rejected the European Union’s free trade proposals, known as Economic Partnership Agreements, and wouldn’t discuss them further.

The proposals “aren’t in Africa’s interest,” Wade said in angry comments at a news conference.

Negotiations on the pacts — meant to replace colonial-era trading systems between Europe and its former colonies — have lasted five years and officials had hoped the summit would bring a breakthrough.

The EU is offering African governments unrestricted access to its 27-country market if they in turn grant tariff reductions for European goods — a measure Africans fear will make their less competitive local companies vulnerable.

African Union Commission President Alpha Oumar Konare said the EU had to give up its “colonial approach.”

“The riches of Africa must be paid for at a fair price,” he said.

During previous talks, African governments have said the agreements would do little to boost their access to European markets. They also viewed the conditions as an EU attempt to meddle in African affairs.

Friction between the continents comes as many African countries are developing strong trade ties with China, whose influence has soared on the back of billions of dollars in aid and investment.

The EU is concerned that the search by China and other rising powers for oil and other resources across Africa comes with no demands for democracy and human rights. Africans, though, say the Chinese come willing to negotiate as equals.

Officials from both continents said the presence of more than 70 heads of government at the summit showed leaders on both continents wanted better relations. But they left the Portuguese capital with only a broad statement of intentions.

Human rights and aid groups expressed exasperation. Save the Children said in a statement the summit was “a high-profile exercise of little substance.”

Differences over the human rights record of Zimbabwean President Robert Mugabe and measures to help end the conflict in the western Sudanese region of Darfur dogged the event.

Asked what was his message to Europe as he arrived at the summit venue Sunday, Mugabe said nothing but raised his arm and made a fist.

German Chancellor Angela Merkel said Saturday the EU was “united” in condemning Mugabe for what they view as his economic mismanagement, failure to curb corruption and contempt for democracy. British Prime Minister Gordon Brown stayed away from the summit in protest against Mugabe’s attendance.

Mugabe was reportedly scathing toward his European critics in his speech at a closed session.

“He said criticisms were trumped-up charges against Zimbabwe and the result of arrogance from the EU,” according to a European official who attended the summit, but who spoke on condition of anonymity because she was not authorized to discuss the details publicly.

Ghanian President John Kufuor, current chair of the AU, said the organization supports mediation efforts among Zimbabwe’s main political parties being led by South African President Thabo Mbeki and aimed at political reform. But he insisted that meddling from outside Africa would be unhelpful.

“We want to encourage a homegrown solution so there will be a restoration of normalcy and good governance for the people of Zimbabwe,” Kufuor said.

Measures to help end the conflict in the western Sudanese region of Darfur were another point of contention.

Sudanese President Omar al-Bashir has so far refused to allow non-Africans into a 26,000-strong U.N.-A.U. peacekeeping force planned for Darfur. EU nations, meanwhile, have failed to come up with the needed military hardware to support the operation.

Sudan and United Nations envoys met on the sidelines of the summit. They said in a brief joint statement there had been “clarification” of some issues but gave no details.

On trade, European Commission President Jose Manuel Barroso acknowledged the difficulty of reaching free-trade deals between wealthy European countries and poor African nations.

“It is a challenge for both Africans and Europeans and will require time,” Barroso said in a speech to the gathering.

The World Trade Organization has ruled that the EU’s 30-year-old preferential trade agreement with Africa was unfair to other trading nations and violated international rules. New deals are meant to be finalized by Dec. 31.

The two sides will press ahead with talks on interim accords with individual African countries to assure they continue to enjoy privileged access to European markets, he said.

“We are nearly there and we now need to focus all of our energy to achieve this priority objective,” Barroso said.

___

Associated Press writers Daniel Woolls, in Lisbon, and David Stringer, in London, contributed to this report.

Africa Becoming Estranged from EU.

EU, Africa open new chapter after no-hold-barred summit

by Amelie Bottollier-Depois

EU and African leaders pledged Sunday to create a new partnership of equals at a summit marked by rows over trade and Darfur and a vitriolic attack by Zimbabwe’s Robert Mugabe on European “arrogance.”

After two days of what hosts Portugal described as a no-holds barred debate, leaders of the two continents put their names to an “Africa-EU Strategic Partnership” agreement to take their relationship to “a new, strategic level.”

They vowed “to move away from a traditional relationship and forge a real partnership characterised by equality and the pursuit of common objectives” and which “capitalises on the lessons of the past.”

And in a post-summit address to his guests, Portugal’s Prime Minister Jose Socrates said the often troubled history between the continents had entered a new era at the first such summit in seven years.

“What is important is that we met each other face-to-face, on an equal setting, in a new spirit,” said Socrates.

“I think I can say the idea that has been expressed most often is that this summit represents the turning of a page in history.”

Ghana’s President John Kufuor, the African Union’s current president, agreed the summit had witnessed frank exchanges but on an equal footing.

“We met at this summit talking plainly and directly as equals,” said Kufuor whose country was the first in Africa to gain independence from a European colonial power, Britain, exactly 50 years ago.

But despite the declaration on a “shared vision” for the future, the shadow of colonialism prevented any real warmth in a summit where starkly different views on issues such as immigration and human rights were on display.

German Chancellor Angela Merkel accused Mugabe on Saturday of “harming the image of the new Africa” with his rights record.

Mugabe hit back on Sunday, charging British Prime Minister Gordon Brown, who boycotted the summit over his presence, was behind criticism of Zimbabwe.

“Yesterday, we heard four countries — Germany, Sweden, Denmark and the Netherlands — criticise Zimbabwe for lack of human rights for non-observance of the rule of law..,” the Zimbabwean president said at a closed door session.

“Does the German chancellor and the pro-Gordon gang of four of yesterday really believe that they have a better knowledge of Zimbabwe” than African bodies? “It is this arrogance that we are fighting against.”

Sudanese President Omar al-Beshir received a similar carpeting from a delegation of European leaders, including Portugal’s Socrates and French President Nicolas Sarkozy who implored him to allow the rapid deployment of a UN-led peacekeeping force to stem the bloodshed in the western Darfur region.

“We told him it is in Sudan’s best interests … that there is a halt to the massacres on its territory and that in order for the massacres to stop, the hybrid (UN-AU) force needs to be deployed as soon as possible,” said Sarkozy.

Wary of China’s growing push into Africa, the European Union has been keen to nail down new trade agreements before the expiration of existing deals at year’s end.

But while the message from Europe was no one would be pressured into agreement, African Union Commission chief Alpha Oumar Konare warned EU negotiators to “avoid playing certain African regions off against each other.”

“No one will make us believe we don’t have the right to protect our economic fabric.”

EU Development Commissioner Louis Michel condemned the comments.

“I think that it was excessive and unjustified and that it was not the best way to defend the interests of Africa,” he said.

Asked how negotiations on the Economic Partnership Agreements (EPAs) were going, Italian Prime Minister Romano Prodi told reporters: “Not easy.”

“The African countries are more and more afraid to be in some way pushed down by sudden competition, so they are asking for guarantees.”

December 5, 2007

EU’s Michel says summit should bring fundamental change to EU-Africa relations

From the International Herald

Tribune

EU’s Michel says summit should bring fundamental change to EU-Africa relations

The Associated Press

Friday, November 30, 2007

 

 

BRUSSELS, Belgium: The European Union’s top development official said Friday he hoped next week’s Europe-Africa summit would lead to a “fundamental shift” in bilateral relations and allow the EU to reclaim ground lost to China.

EU Development and Humanitarian Aid Commissioner Louis Michel said that while colonial history remains on Europe’s conscience and “Africa will probably still exploit it for some time,” the two sides must structure their future partnership as one of equals.

“The donor-recipient mode has led to attitudes on both sides. We must get rid of the give-and-take attitude,” Michel said in a speech to the European Policy Center think tank. “I hope the summit is going to lead to a fundamental shift in relations.”

The Dec. 8-9 summit will focus on five main issues: governance and human rights, peace and security, migration, energy and climate change, and trade.

Portugal, which holds the EU’s rotating presidency, wants the Europe-Africa summit to herald a period of closer cooperation between the 27-nation EU and the 53-member African Union and counter the influence of China, which has invested billions of euros (dollars) in developing African countries in recent years.

“In Europe we don’t always realize that, but African countries, which used to be out there with a begging bowl, are becoming quite popular, and they’re taking advantage,” Michel said.

The protracted spat between Britain and Zimbabwe over the presence of Zimbabwean President Robert Mugabe is threatening to overshadow the summit. British Prime Minister Gordon Brown has said he would stay away from the summit because of Mugabe.

But Michel said he didn’t think the summit would fall hostage to the spat.

“At the bottom of this is colonial history, you can’t rewrite history … but if you don’t offer them a new framework they will always work with this historical memory,” he said.

EU Trade “Deals” for Africa under Attack

Oxfam Warns Continent About EU Trade Deal
Business Day (Johannesburg)

NEWS
28 November 2007
Posted to the web 28 November 2007

By John Kaninda
Johannesburg
LONDON-based charity Oxfam has warned African countries not to rush into signing the European Union (EU) Economic Partnership Agreements (EPAs) in their present form as this would result in opening up the continent’s markets to EU trade “too fast and too deeply”.

The institution feared that the move would at the same time expose vulnerable African farmers and fledgling industries to unfair — often subsidised — competition from Europe, said Luis Morago, head of Oxfam’s EU Advocacy Office.

The call was made after Botswana, Lesotho, Mozambique and Swaziland on Friday initialed a free trade agreement with Europe. SA and Namibia are yet to sign the agreement.

Morago fears that in the next few weeks other regions could give into pressure from the European Commission to sign deals before the end of the year .

“Countries are being placed under enormous pressure to sign deals before the end of the year that could cause significant damage to their economic prospects.”

Morago said: “They are being asked to trade off the interests of their exporters — who will see a hike in tariffs from January 1 if no deals are signed — against the livelihoods of some of their most vulnerable subsistence farmers and industries.”

He said the latter would face competition from Europe if the tariffs were taken down.

“It suits the commission to spread the impression that regions are falling into line and others should do so too.

“But we would urge developing countries to take heed of the range of voices raised against these deals — from the World Bank to trade lawyers to civil society and trade unions — and resist the pressure .”

If African countries remove the majority of tariffs on imports, they will face massive losses of government revenue, potentially jeopardising spending on health and education, Oxfam said.

The body also believed that the negotiations were undermining critical regional integration processes. The EU Commission has said that it was obliged to finalise free trade deals by next month according to the World Trade Organisation (WTO) rules.

However, Oxfam has argued that the existing preference scheme, known as GSP+, could be extended to ACP countries to guarantee continued access to EU markets in the absence of a new deals, or the waiver granted by the WTO could be extended.

GSP+ is a new single scheme that covers — for the period 2006-08 — approximately 7200 products that can enter the EU duty free from vulnerable countries. However, these are reserved for countries whose governing principles accept the main international conventions on social issues, human rights, environmental protection and good governance.

The deal initialed between southern Africa on Friday covered trade in goods only.

It lacked a lot of significant information, including how many tariff lines would have to be cut, by how much and the percentage of trade that could be exempt . The full offers are due to be exchanged on December 6 and the deal will need to be signed by ministers and then ratified before it is final.

Last week, there were suggestions that East Africa had signed a deal. This turned out to be untrue but countries are under a lot of pressure to agree to sign before the end of the year to protect their existing export business .

What is Expected on EU-Africa Summit (Opinion)

Need to Face Facts On EU-Africa Summit

Financial Gazette (Harare)
COLUMN
29 November 2007
Posted to the web 29 November 2007

By Mavis Makuni
Harare
THE Africa File instalment in the November 15-21 issue of The Financial Gazette elicited a response from Herald columnist, Godwills Masimirembwa, who seemed to have missed the point I was making when I said British prime minister Gordon Brown could be vindicated if Zimbabwe carried out its threat to cause a “showdown” when the European Union-Africa Summit is held in Lisbon in just over a week’s time.

This, however, did not surprise me as the columnist’s penchant for classifying ideas into pre-determined categories extended even to my person. In his lengthy article, he referred to me no less than three times as “my sister, Mavis” or “Mavis, my sister.” He, however made sure to cite himself as “this writer” and his Herald colleague simply as Caesar Zvayi, without resorting to any indulgent terms to imply a superior-subordinate situation.

In a patriarchal society with a political culture of intolerance for divergent views, such condescending references are repugnant and are a barrier to objective communication and debate. I therefore, hereby give notice to Masimirembwa that I express views in my columns as your equal, as a Zimbabwean with as much right as yourself to comment on events in my country. In doing so, I do not defer to you on the basis of gender or any other reason and you should not patronise me as your “sister” to be preached to or talked down to. With that clearing of the air out of the way, let me now return to the main issue.

The diplomatic row over whether or not Zimbabwe should be invited to the summit in Portugal erupted after Brown had threatened to boycott the event because he believed the presence of Zimbabwe’s head of state, President Robert Mugabe, would turn the meeting into a media circus. My observation that this could indeed happen was made after a story had been published in the official press quoting government officials threatening that there would be a repeat of the public display witnessed at the Earth Summit in South Africa in 2002 when the Zimbabwean head of state blasted Tony Blair in particular and the West in general for meddling in the affairs of African countries.

Masimirembwa took this observation to mean that I had advocated that Zimbabwe should be “put on trial”, which I deny categorically.

Yes, I argued, and still argue that if Zimbabwe has nothing to hide, there should be no trepidation about explaining its position convincingly without any grandstanding, with respect to the accusations of repressive governance and human rights abuses consistently levelled against it. It is a deliberate misinterpretation, in my opinion, to say that any country about which issues are raised at international gatherings at which it is an equal partner is on trial.

Masimirembwa says: “Who will ask questions about Zimbabwe’s human rights record, about governance issues in Zimbabwe” in the same breath as he rails against the “illegal sanctions” imposed on the country’s leadership by the selfsame EU. Does he want readers to believe he has forgotten the reasons the EU and the United States have advanced for resorting to the travel bans and other restrictions imposed on those on the targeted sanctions list?

My argument is that it does not make sense to make all the noise that has been made about regime change and illegal sanctions at home and then recoil at the prospect of presenting the crafters and imposers of these measures with convincing facts to show why they are wrong in maintaining and renewing the embargoes.

The Herald columnist knows as everyone does that the ruling party has made the lifting of sanctions one of the conditions for its participation in the talks between it and the Movement for Democratic Change (MDC), which are being mediated by South Africa’s President Thabo Mbeki. ZANU PF has insisted that the MDC should call for the lifting of sanctions although the opposition is not the government of the day. It, however, would presumably have to appeal to the very same EU that is hosting the Lisbon summit.

The apparent unwillingness of the government to fight its own battles when the need or opportunity arises, gives the unfortunate impression that it would prefer to use the MDC as a “shield” instead. If the government is sincere in claiming that it wants sanctions lifted because they are hurting the ordinary person, it should be prepared to prove once and for all that it is falsely being accused of the abuses the EU and its allies have cited for imposing the bans. These blocs have spelt out the improvements they want to see before lifting the targeted sanctions. These improvements will not benefit the EU and its allies but the people of Zimbabwe.

It has to be said that when you declare a war as Zimbabwe says it has done against the West, it is unrealistic to insist that you will fight it on your own terms because you are bound to encounter all types of terrain. Those you are supposed to be fighting will respond, justifiably or not, as they deem fit. It is therefore important to know when to hold fire, retreat or advance. Unless a war is waged purely for its own sake, without regard to national interests, I submit it is neither astute nor practical to have one stock answer such as sovereignty, to fit all eventualities. Solutions to problems should be designed to fit specific situations.

Masimirembwa paid tribute to President Mugabe for articulating African causes on the international arena. He will agree that doing this entails questioning and denouncing the policies and actions of other countries and their leaders. The President would not be able to make speeches such as the one at the Earth Summit and those he delivers at the United Nations if regular targets of his attacks like United States President George Bush and Tony Blair’s successor Gordon Brown complained that such scrutiny meant their countries were being put on trial.

EPAs Under Fire From European Parliamentarians

EPAs Under Fire From European Parliamentarians
Inter Press Service (Johannesburg)

NEWS
30 November 2007
Posted to the web 30 November 2007

By David Cronin
Brussels
No fanfare was made in Brussels in the past week over European Union officials’ breakthrough in the trade talks on economic partnership agreements (EPAs) with almost 80 African, Caribbean and Pacific (ACP) countries.

For, while interim deals have been reached with nine countries, doubts persist over whether a full range of accords can be secured before a December 31 deadline set by the European Union (EU).

Five East African countries – Kenya, Uganda, Rwanda, Burundi and Tanzania – signed an agreement with the EU on November 27. A few days earlier, the Southern African states of Botswana, Lesotho, Swaziland and Mozambique gave their assent to a similar deal.

The EU’s executive, the European Commission, claims that its offer in the EPA negotiations is the most generous ever proposed as part of trade talks. The ACP, it says, would be allowed to sell their goods free of duties or quotas to the EU from next year. Sugar and rice would be the only exceptions.

This has done little to assuage the concerns of anti-poverty activists, who point out that any gains from greater exports to the EU could be eclipsed by the damage done by the largely reciprocal market openings that ACP countries would have to undertake.

These would allow subsidised European food products, with which local producers would be in no position to compete, to effectively swamp the ACP markets. Under the interim deals with East Africa, for example, taxes on two-thirds of imports from the EU would be eliminated.

Although the Commission has given assurances that the EPAs will be a tool for promoting regional integration in Africa, its critics argue that its tactics could be undermining that objective.

The interim agreements with Southern Africa have been reached, without South Africa or Namibia yet on board, although Angola has signalled it could soon join an agreement.

And in negotiations with a West African regional grouping, the EU side has indicated it may sign a separate deal with Ivory Coast without its neighbours. Both the West and Central African groupings in the talks have not yet presented the Commission with formal offers on questions of market access.

Glenys Kinnock, a veteran member of the European Parliament (MEP), said she had “never encountered the kind of pressure that the ACP has faced during these negotiations”.

Accusing the Commission of “intransigence and lack of flexibility”, she argued that it is “threatening regional integration and causing regional tensions”.

Ján Figel, a member of the European Commission, said this week that EU officials have taken “a pragmatic and flexible approach”. Nonetheless, Figel, who was deputising for Trade Commissioner Peter Mandelson, warned ACP governments that they risk having considerably higher taxes imposed on their exports to the EU if they do not conclude EPAs by the end of the year.

But Marc Maes, a trade specialist with Belgian anti-poverty group 11.11.11, said that the Commission had hardened its position during the negotiations.

Whereas it had indicated that ACP countries would be allowed a 25-year transition period for opening up their markets to most European imports, this period has been shortened to a maximum of 15 years in many cases. “The Commission has been moving the goalposts,” he told IPS.

He noted that EU governments earlier this month issued a call to the Commission to display flexibility in the talks. “The Commission has not offered maximum flexibility,” he said. “It has been constantly raising the stakes.”

The international non-governmental organisation Oxfam’s Luis Morago said: “The way these negotiations have been conducted so far is inimical to development.

“Countries that are massively dependent on the EU as a market for their goods and as a major aid donor are being told they must either sign deals now that involve drastic liberalisation or face an increase in tariffs from January next year that would devastate their export industries. This is not fair negotiation but brinkmanship.”

All of the deals signed this year are expected to be limited to trade in goods. Negotiations aimed at expanding the EPAs to cover investment, competition, services, public procurement and intellectual property could continue into 2008.

Although many ACP countries have been opposed to having negotiations that cover such an extensive range of issues, the Commission only agreed in October to restrict discussions for the remainder of this year to trade in goods.

In an exchange of views with Figel, the German Green MEP Frithjof Schmidt said: “It is astonishing to hear you talking about the negotiations as though everything has gone well for the Commission.

“In truth, the negotiations have been overburdened by the Commission. The ‘goods only’ announcement was a confession of the Commission’s failings and it was too little, too late. Your strategy has been a mistake,” Schmidt said.

French Socialist Harlem Désir argued that the EU threat of increasing tariffs on ACP goods in the absence of agreements is a “type of blackmail”.

Helmuth Markov, a German left-wing MEP, branded the EU’s tactics as “a catastrophe”, arguing that the overriding concern of officials was to prise open ACP markets to Western businesses.

“Partnership means respect,” he said. “When we Europeans can still have an attitude of ‘take it or leave it’, it has nothing to do with partnership.”

EU Gets NO DEAL On EPAs in Kigali Round

No Deal On EPAs in Kigali Round
The Monitor (Kampala)

NEWS
27 November 2007
Posted to the web 26 November 2007

By Robert Mukombozi
Kigali
THE 14th Kigali round of the African, Caribbean and Pacific and European Union members concluded with nothing tangible over the controversial issue of Economic Partnership Agreements.

After nine days of intensive negotiations, ACP countries maintained that they needed more time to negotiate a deal on the ACP-EU EPAs for which a World Trade Organisation waiver expires at the end of 2007.

The EU has been asked to urgently consider shifting deadlines.

“We urge the European commission to acknowledge that more time is needed for ACP states to assess the implications of the agreements proposed, given that negotiations have only taken place in earnest for the past to years,” reads the Kigali declaration adopted by the ACP-EU Joint Parliamentary Assembly.

The ACP states also declared on November 22 that they have been put under pressure by the European Commission to sign an EPA and that this was against the spirit of the two blocks partnership.

HITCH: The Manager of Legal and Bonds Customs Department, Mr Nicholas Kanabahita (R), and Comesa Senior Insurance Expert Berhane Giday (L) at a recent ceremony. File photo

Actually they have made their position clear on the matter that agreements reached whether interim arrangements of full EPAs, must ensure that no country is left worse off after the expiry of the negotiation deadline.

While the ACP group rallies for the future consideration of the deal, the EU says its signing is timely.

Amidst the protests, Ms Glenys Kinnock, the co-president of the ACP-EU Joint Parliamentary Assembly said a new deal was possible.

Ms Kinnock says that the attempts to frame such agreements had proven difficult, largely because the commission negotiators had approached the talks on EPAs as if they were conventional free trade negotiations focused on market opening, rather than as tools for development.

However, the ACP declined to bow to the EU’s “coated plea”.

In fact, the Commission threatened to cut aid extended to these “notorious states”.

The EC Commissioner for development and humanitarian aid, Louis Michel told participants at the closure that they needed to be more careful because they are ready to invest all there is to move the EPA.

He also said that Europe would concentrate on “promoting sustainable development” using “substantial means to accompany the EPA process”.

In this regard, Mr Michel indirectly implied that they would finance under the European Development Fund (EDF) package to influence the ACP states to comply.

The EU has committed funds amounting to over two billion Euros as aid for developing countries would be tailored to governance programmes and economic reforms in their interest.

But the ACP was not moved.

The member states ignored the EU threats and unanimously agreed to suspend further negotiations on the matter of signing the EPA deal, probably, until when EU is ready to listen to their demands.

This declaration follows the Cape Town agreement of 2002, adopted at the start of the EPA negotiating process.

Meanwhile some developing countries have warned at this Kigali round that they will never sign EPAs in their current form. The official position of most countries, however, is-that development -friendly EPA- is the objective and so far there has been no real discussion about alternatives to EPAs. It was a job abandoned for NGOs among other trade activists on the sidelines.

EU Trade Deal to Remove Visa Fees… Good Deal or Red Herring??

EU Trade Deal to Remove Visa Fees
East African Business Week (Kampala)

NEWS
26 November 2007
Posted to the web 26 November 2007

By Jude Etyang And Phillip Nabyama
Kampala/London
Visa fees for travellers to European countries could be dropped starting January 2008, in what looks like a sweetner in the talks for Economic Partnership Agreement (EPA) between East Southern Africa (ESA) and the European Commission (EC).

The provision for eliminating consular fees also applies to both parties hence ESA countries won’t charge their EU visitors.

Visa fees fall under Aticle 10 which defines Customs Duty as any duty or charge levied in connection with the importation of goods. East African Business Week has seen a copy of the interim agreement which will govern trade relations between the two blocks starting December 31, 2007 till December 31, 2008.

The parties also commit themselves to have a comprehensive EPA by December 31, 2008.

Imports of products originating from the ESA States shall be allowed in the European Union free of customs duties and charges having the equivalent effect, except for sugar, according to Article 11 of the interim agreement.

The “Interim Agreement Establishing A Framework for Economic Partnership Agreement,” was due for signing at the end of last week by ministers of the member countries.

It states the key objective as; “To establish the framework, scope and principles for further negotiation on trade in goods including, rules of origin, trade defence instruments, custom cooperation and trade facilitation, sanitary and phytosanitary measures, technical barriers to trade, agriculture, economic and development cooperation on the basis of the proposals already submitted.”

The provisional pact is a stop-gap measure after the two parties failed to sign the EPAs which are supposed to replace the Lome agreement.

The Lome agreement which gave ACP countries tarrif-free-and-quota-free access to the European market expires in December 31, 2007 because it doesn’t fit into WTO fair trade rules.

The ACP countries are dragging their feet to sign the contorversial EPAs in which the EU is seeking full liberalisation of their markets.

Trade activists have warned that giving the European goods full access to LDCs will kill local industries.

The ESA also agree to reduce tarrifs on EU goods and to provide a time-frame for the liberalisation process of their markets as soon as the agreement comes into force.

The ESA report showed that Kenya, Uganda, Rwanda and Burundi signed the agreement except Tanzania.

Article Five of the interim agreement on Trade Regime for Goods states that there will be a gradual liberalisation of the goods market of ESA countries.

“The complete liberalisation of the (European) Community’s market for ESA exports and the progressive and gradual liberalisation of goods market in ESA in accordance with the modalities established in this Agreement,” the article states.

For the duration of this Agreement, the Parties also agree not institute any new duties or taxes in connection with the exportation of goods to the other Party, The agreement also removes all non-tarrif measures.

“…all import or export prohibitions or restrictions in trade between the Parties, other than customs duties and taxes, and fees and other charges provided for under Article 10, whether made effective through quotas, import or export licenses or other measures, shall be eliminated upon the entry into force of this Agreement.

No new such measures shall be introduced,” Article 17 reads partly.

An EPA Committee comprising representatives of the member states shall be responsible for the administration of all matters under this Agreement and for the fulfilment of any of the tasks mentioned in this Agreement.

Africa Questions WTO and Meaning of FREE Trade With EU and EPA’s

There is No Need for the Continent to Sign EPA
The Monitor (Kampala)

COLUMN
26 November 2007
Posted to the web 26 November 2007

By Teddy Sseezi Cheeye

Europe is pressurising its former colonies to sign an enslaving trade agreement known as EPA. In my view African countries especially poor ones like Uganda should not be rushed into signing the so-called EPA agreement.

To start with the WTO has ruled existing preferential trade arrangements between poor countries and developed countries illegal. In other words, both WTO and multinational companies in Europe find the present preferential trade arrangement discriminatory.

The underlying economic principle is that by removing trade barriers like preferential trade arrangements, both human and material resources should be able to maximise their comparative advantages and be able to move freely across the global, leading to Adam Smith’s theory of specialisation, efficiency and affordability of both production of goods and provision of services which is good for everyone. There are three fundamental economic issues, which must be resolved before rushing into signing the EPA:

Global Competition

First of all, I agree with President Yoweri Museveni’s position, that there is nothing wrong to subject every one to the economic laws of competition. In other words, if both the WTO and multinational companies in Europe have decided that preferential trade arrangement with former colonies hinders global competition and is therefore considered illegal, fair enough. Let the preferential trade arrangements be terminated.

But this does not necessarily mean that former colonies should be coerced into signing new trade arrangements since by implication the new trade arrangements (EPA) will not be any better than the previous preferential trade arrangements.

It is vexing for Europe and WTO to rule preferential trade arrangements illegal and at the same time agitate for another form of neocolonial trade binding agreements, which after all have not been publicly disclosed and discussed in detail up to local community levels in order to get the much needed consensus.

Liberalisation

The second intriguing economic issue which needs to be resolved is liberalisation, the platform for free trade. The underlying principle as stated above is that with free movement of both human and material resources, enterprising individuals should be able to deploy both resources any where in the world, unhindered, which would lead to specialisation, efficiency and affordability.

In other words Europe is correctly saying that it has comparative advantage in production of goods and provision of services, in which it has specialised, in which it is efficient and which are affordable.

However there is an omitted case that must also be urged in the same breath. African countries too have economic comparative advantages within the global framework of free trade. While Europe giant companies like Nestle may want to sell food products in Africa and at the same time access raw milk and coffee, African entrepreneurs too want to sell their products and offer their services to Europe as well. But in order to carry out this free global trade, Africans too must be free to enter Europe as and when they want, just like the way Europeans enter African countries freely.

We cannot have a tilted free-trade arrangements where Europeans enjoy global free movements to any country in the world while Africans are restricted access to Europe, where they are supposed to go and search for markets or offer services on the basis of comparative advantage of affordability.

Affordability

One of Africa’s comparative advantages is in the area of offering cheep labour in developed countries, which has led to the emergence of remittances as the leading sources of finances to developed countries. For example while according to World Bank (as cited by President Museveni) remittances to developing countries last year amounted to $120 billion financial aid to developing countries was only $13 billion in the same period.

Similarly while last year IMF and WB gave peanuts to East Africa, (less than $500 million), remittances to EA hit an astronomical $37b. In other words, while Europe wants to take advantage of its comparative advantage, it is silent on granting easy access to Africans to go to Europe and offer cheap labour, which is our comparative advantage. We cannot have free trade without free trading men and women.

In my view the above and many other issues need to be resolved before we enter into disadvantageous agreements like the ones done during colonial period..

The writer is the Director of Economic Monitoring in the President’s Office

EU – African EPA Trade Negotiations Extended

Citizens Need a Fair Deal in EU Trade Treaty
The New Times (Kigali)

NEWS
29 November 2007
Posted to the web 29 November 2007
Kigali
The East African Community (EAC) clinched a deal with the European Union (EU) which allows for a continuation of negotiations on trade partnerships between the blocs.

This gesture comes just weeks after member states within the Africa Caribbean and Pacific (ACP) grouping met here in Kigali and asked for more time to study the new trade deals known as the Economic Partnership Agreements (EPAs).

Unfortunately member states within the ACP have only a month to decide whether to adopt the EPAs or the Europeans would impose higher tariffs as a consequence.

There is a feeling among many African negotiators that Europe is using the excuse of the World Trade Organisation (WTO) rules to rush the negotiations.

While we appreciate the urgency with which EAC handled the matter by signing a provisional deal with the EU on Tuesday, our leaders in the regional community should not hurry to bow to the mounting pressure.

An analysis done on the potential impact of the EPAs prepared by the United Nations Economic Commission for Africa (UNECA) shows that the proposed opening up of 80 per cent of trade of the EAC with Europe, will result in loss of tariff revenue of up to $130m per year.

Rwanda and a number of other African countries have already introduced 100 percent customs tariff waivers on commodities originating from certain regional communities. Already billions of Francs are being lost through this process although there are certainly significant benefits that accrue from regional communities.

Now with EPAs, it means that the already struggling African producers will have to compete directly with their European counterparts who hitherto enjoy subsidies.

Any hurried commitment by developing nations would subsequently see our economies undergoing significant dislocations with regional trade losing ground at the expense of European imports.

It is equally important to note that Africa’s exports to Europe are nowhere close to match what Europeans export to Africa.

That is why leaders of developing countries shouldn’t scatter their efforts by splitting themselves into geographical locations, but rather devise a common approach in their negotiations with the EU.

As our leaders travel to Lisbon next month for the EU-Africa Summit, they should be able to advocate for a poor African producer whose efforts could be shattered in the face of stiff unfair competition.

December 4, 2007

Anyim-Osigwe Gives Lecture on “Can Europe Aid Continent’s Development? “

Anyim-Osigwe Lecture – Can Europe Aid Continent’s Development?
Vanguard (Lagos)

NEWS
26 November 2007
Posted to the web 26 November 2007

By Bolade Omonijo

What has Europe to do with the level of poverty ravaging the African continent?

There is a big debate about the part played by the Europeans, both in keeping Africa down and thus facilitating the development of their continent.

The seminal work by the late Dr. Walter Rodney traced the underdevelopment of Africa to the slave trade and the consequent and subsequent colonialism during which, he contended, African development was not only arrested but deliberately reversed.

Africa remains the poorest of all the continents.

Tony Blair: Advocates funds for Africa’s development

Poverty remains at grinding level and the future for most of the people remains bleak. Many of the children are out of school, extreme or grinding poverty, including squalor, starvation, diseases and malnutrition is increasingly on the increase.

The only thing that sustains the poor and helps many keep their sanity is the hope of a better tomorrow. But, the statistics are quite frightening and, as many scholars have observed, poverty is a trap.

These, according to Mr. Michael Anyiam-Osigwe, Coordinator-General of the Anyiam-Osigwe Foundation, informed the choice of the theme and speaker for this year’s Anyiam Osigwe Lecture. At a press briefing organized in October to unveil the lecture, Mr. Michael Anyiam-Osigwe said: “This year, the central theme of the 9th lecture series, harnessing

Africa capital that the people may have life and live it more abundantly. The President of the Czech Republic, His Excellency, Professor Vaclav Klaus, is the keynote speaker. His topic, which derives from the central theme, is titled, “Europe as a Strategic Partner in Harnessing African Capital.”

Explaining further the rationale for the choice of both theme and topic, Mr. Anyiam-Osigwe said: “On the central theme of the lecture, “Harnessing African Capital That The People May Have Life and Live It More Abundantly”, various views, theories and measures have been put forward in an effort to unravel the complexity of Africa ‘s poverty problem. Anyiam-Osigwe’s perspectives on this critical subject, premised on his fundamental principle of a holistic approach to human existence and development, penetrates the heart and essence of the problem.

He holds the views that the key to unravelling the crisis of poverty in Africa resides in articulating, identifying and effectively harnessing African capital in all its ramifications. In this connection, the ninth session focuses on the Anyiam-Osigwe’s espousal on the need to harness what he identifies as Africa’s meta-physical capital alongside the conventional ones, as only such a mix could provide the selfless and disciplined leadership for controlling and optimally utilising resources for development in the interest of the people.

Given our present circumstances, I must underline that the objective of the session is to encourage identification and adoption of value-guided conduct among some of the ruling elite who harness our common-weal in the name of the people for development but misappropriate it for themselves, their families, friends and cronies.

In this regard, we wish to emphasise that one of the aims of the Foundation is the entrenchment of principle-centred leadership and good citizenship in the continent. We are, therefore, delighted and gratified by the personal example demonstrated through the unprecedented determination and willingness at the highest level of our present administration to enthrone value-guided leadership in our national life.”

Why was President Klaus of Czech Republic chosen to deliver the lecture? The Foundation pointed out: “In inviting President Vacalav Klaus, a renowned intellectual, an accomplished economist and former professor of finance at the Prague School of Economics, the Foundation is maintaining its tradition which ensures that the principal participants at its lecture series are, indeed, esteemed authorities whose invaluable perspectives and vast knowledge would lend profound insights into and deepen understanding on the subject under discussion.

“The presence of the President of the Czech Republic at the 9th Session of the Foundation’s lecture series, reflects the Foundation’s continuing efforts to seek international goodwill for our country and also establish meaningful bridges with organisations and citizens across countries and continents.”

What is at the heart of the underdevelopment of Africa? As the Anyiam-Osigwe Foundation has pointed out, the debate continues to rage. Is Africa’s development almost five decades after most of the countries had been set free from the strangle-hold of colonialism to be blamed on the colonial powers of Europe or on the quality of leadership that has been the lot of most of the countries?

Why have the countries failed, so far, to turn their natural endowment to wealth? Is there a conspiracy by the West to keep Africa down and her people reserved the role of hewers of wood and drawers of water? How are the experiences of the Asian tigers and India to be explained?

These are questions begging for answers. At a conference on African development challenges in the new millennium held in Accra in April 2002 under the aegis of the Third World Network and CODESTRIA, it was observed that, “the uneven progress of democratization and in particular of the expansion of space for citizen expression and participation.

The conference also acknowledged the contribution of citizens’ struggles and activism to this expansion of the political space and for putting critical issues of development on the public agenda.

“The meeting noted that the challenges confronting Africa’s development come from two inter-related sources: (a) constraints imposed by the hostile international economic and political order within which our economies operate; and (b) domestic weaknesses deriving from socio-economic and political structures and neo-liberal structural adjustment policies.”

On the new global order and its deleterious effect on African development, the conference observed that, “the main elements of the hostile global order include, first, the fact that African economies are integrated into the global economy as exporters of primary commodities and importers of manufactured products, lead-ing to terms-of-trade losses. Reinforcing this, secondly, have been the policies of liberalization, privatization and deregulation as well as an unsound package of macro-economic policies imposed through structural adjustment conditionality by the World Bank and the IMF. These have now been institutionalized within the WTO through rules, agreements and procedures which are biased against our countries.

“Finally, the just-mentioned external and internal policies and structures have combined to generate an unsustainable and unjustifiable debt.”

The debate has assumed a new significance following the initiative of the immediate past Prime Minister of Britain Mr. Tony Blair, to rally support and capital needed for the development of Africa. Nigeria’s President, Umaru Yar’Adua, too, at a recent meeting in Germany, called on the rich countries of Europe and America to pump the needed capital for the development of the African continent through an initiative akin to the Marshal Plan by which the United States of America resuscitated after the European countries’ eco-nomies had been crippled by the Second World War.

This year’s Anyiam-Osigwe lecture is the ninth in the series. Last year, the lecturer was Mr. Kwasniewski of Poland who spoke on “Synthesis for Africa’s socio-political and economic development”. Others who had spoken at the usually well attended lecture series in the past eight years include Nigeria’s professor Bolanle Awe, South Africa’s Mr. Fredrick De Klerk, former British Prime Minister, John Major, former German Chancellor, Helmut Kohl and America’s former Vice Presi-dent Al Gore, among others.

It is expected that this year’s lecture, being delivered by a serving President, would promote greater understanding between Europe and Africa and present both continents as partners.

OXFAM Warns Africa about Pending EU EPA Deals

EU Deal Will Hurt East Africa, Oxfam Warns
The New Times (Kigali)

NEWS
30 November 2007
Posted to the web 30 November 2007

By James Munyaneza
Kigali
A British international organisation has warned that the recent free trade agreement between the East African Community (EAC) and the European Union (EU) could result in unemployment and loss of revenue for countries in the African economic bloc.

Oxfam International urged in a statement sent to The New Times yesterday that other developing countries should ‘take heed of the range of voices raised against these deals and continue to ask the (European) Commission for more time to negotiate a pro-development deal, and for feasible alternatives to be considered.’

Luis Morago, Head of Oxfam International’s EU Office said in the statement: ‘Developing countries have been placed under enormous pressure to sign. Despite concerns raised by many, including the IMF, African civil society, trade unions, and academics, the Commission has ignored possible alternatives and insisted on the deadline.

‘They have essentially forced the East Africans to choose between guaranteeing markets for their agricultural exports today, and maintaining a degree of protection to promote future industrial growth – which all developed countries have done in the past.’

He said that the deal signed in Kampala, Uganda on Tuesday will oblige the ‘East African region to remove 80% of its tariffs on EU goods over 15 years, possibly more quickly, which could lead to unemployment and loss of vital government revenue that might otherwise be spent on health and education.’

‘It suits the Commission to spread the impression that regions are falling into line and the rest should do so too. But we would urge other countries to take heed of the range of voices raised against these deals and continue to ask the Commission for more time to negotiate a pro-development deal, and for feasible alternatives to be considered,’ he was quoted as saying.

The Goods-only trade agreement covers mainly industrial inputs and capital goods.

About one fifth of EAC trade will be completely excluded from any market liberalisation requirements.

The deal is seen as an interim step towards agreeing a full Economic Partnership Agreement (EPA) by mid-2009.

The EAC signed the agreement with the EAC to proceed with negotiations on EPAs beyond the initial deadline on December 31. A number of international and national groups have discouraged a rushed signed on the EPAs.

State Minister for Industry and Investment Promotion Vincent Karega represented Rwanda at the ceremony. The other EAC member states are Burundi, Kenya, Tanzania and Uganda.

There are worries that waiving tariffs on imports from EU would seriously hurt the already struggling economies of developing countries, adding to the already existing unfairness on the world market due to the highly subsidised western products.

The Western Nations Concerns Over China’s Role in Africa is Starting to Show!!

West’s Concern Over China’s Role on Continent Starts to Show

The Nation (Nairobi)
OPINION
11 November 2007
Posted to the web 12 November 2007
Nairobi

Give it to Robert Mugabe: he has this remarkable ability to make Europe tie itself in knots. The upcoming Africa-European Union summit of Heads of Government hosted by Portugal is already steeped in controversy after British Prime Minister Gordon Brown warned he would not attend if the Zimbabwean leader were invited.

This has put everybody in a bind, no less the Europeans themselves.

But in an unusual reversal for Mr Brown, key European states from Germany to Portugal have intimated they don’t agree with the British government’s reasoning on this matter. Of course, the issue is being argued along the familiar and patronising line that one man should not jeopardise a vital discussion on trade and investment that is to be in Africa’s benefit.

If truth be told, it is Europe that needs the summit more than Africa does. The European Union bloc has traditionally been Africa’s most important and valuable trading partner. But in recent years, China booming economy has seen her rise to be the number two foreign economic player on our continent.

A year ago China organised the first Sino-Africa summit in Beijing, which was highly successful. Europe, as did many of Africa’s other would-be suitors, watched the event with keen interest.

Equal note has been taken of the fact that China has the largest number of embassies and consulates on the African continent, and that includes all the British and the French missions as well.

Actually the whole charade is about Africa’s vast, untapped resources. Everybody is fighting for a share of these under the polite guise of discussing investment at well-appointed summits.

Outside her interests in oil imports from Nigeria, Angola and other oil-producing African countries, the United States has been a comparatively lesser economic player in the continent despite her global omnipotence.

But America is certainly not keeping aloof from this intensifying competition for Africa’s enormous resources. And as is the case with Europe, it is China’s commercial inroads on the continent that have put the superpower on full alert.

Earlier this year Washington announced the creation of a new American military command it is calling Africom (for Africa Command).

It has been shopping around on the continent for a permanent headquarters for this command, so far unsuccessfully. For understandable reasons, hardly any African country would be comfortable offering this Africom a base, though Liberian President Ellen Johnson-Sirleaf looks like she could succumb to George W. Bush’s recent charm offensive that saw her receive America’s highest decoration, the Congressional Medal of Honour.

The rationale advanced for Africom is, ostensibly, to network with African countries in matters of counter-terrorism, which means stalking terrorists from the Indian Ocean seaboard and the Horn of Africa up to the Sahel.

But those familiar with geopolitical strategies have no illusion that the time will come when, assuming China manages to crowd out the others from Africa’s resource pie, Africom will abruptly cease to be the benign force it is being purported to be.

Mr Brown’s stubborn insistence on the old British vendetta against Mr Mugabe has irritated other European countries who think he is failing to see the bigger picture. And it is not as if the Brits (or for that matter the French) are any longer the last word on matters African.

Ghanaian President John Kuffuor, who rarely reacts emotionally, has complained of countries introducing matters that are “extraneous” to the Lisbon summit. Mr Kuffuor’s remarks have been widely digested because he is not just any African. He is the serving Africa Union chairman, and hence our global voice. Mr Mugabe’s neighbour, Zambia’s Levy Mwanawasa, who currently chairs the Southern African Development Community (SADC), has gone a step further and made it clear that he (and certainly others) will not be in Lisbon if the Zimbabwean leader is not invited.

Mr Brown is first and foremost playing to a gallery. The British have turned Mr Mugabe into such an ogre that they themselves have become hostage to their own propaganda.

The Prime Minister is already lagging behind in the polls to the opposition Conservative Party, and much as he can understand that his fellow Europeans are talking sense, he has already put himself in a political bind. That is Western “democracy” for you.

There was this interesting encounter last week between Mr Kalonzo Musyoka and the CEO of the Steadman Group, Mr George Waititu. Reportedly, the presidential aspirant was demanding to know Steadman’s polling methodology.

This is the same fellow who said he didn’t care about Steadman and that they could give him zero for all it mattered.

I don’t know what transpired, but (tongue in cheek!) I happily note that Mr Musyoka has gained three more points in the latest Steadman poll.

December 3, 2007

ACP States Reject EU Trade Ultimatum

ACP States Reject EU Trade Ultimatum

The New Times (Kigali)
NEWS
15 November 2007
Posted to the web 15 November 2007

By Edwin Musoni
Kigali
The 10th ordinary session of the parliamentary assembly of African, Caribbean and Pacific (ACP) countries has rejected the European Union’s call for the group to sign the Economic Partnership Agreements (EPAs) by December 31.

In a meeting in Kigali yesterday, ACP member states decided not to bow to the EU pressure, insisting that they were not ready to enter a new trade agreement.

Consequently, they drafted a document titled ‘Draft Kigali Declaration” which is due to be presented to the 14th session of the ACP-European Union joint parliamentary assembly in Kigali on Friday.

The declaration urges the European Commission to give the ACP countries more time to assess the implication of deal before signing.

Rwanda’s Senate Vice President, Prosper Higiro, said that ACP countries still need more time to study the deal before endorsing it.

“The EU is putting us under pressure to sign this agreement before we are ready for it but we have decided to reject it until all ACP countries are ready,” Higiro said.

He added: “The EU is under pressure from the World Trade Organisation to have these agreements, so they have decided to transfer the pressure on us; members have agreed not to sign the agreement until all ACP states are ready for a new trade deal with the EU,” he said.

The EU has threatened to increase tariffs of its export goods by January 1, 2008 should ACP members refuse to comply.

The declaration indicates that such a threat would affect lives on millions in ACP countries.

Meanwhile, the ACP co-chairperson, Senator Jean Marie Everistus, said: “There is a big possibility that the EU will reject our report but if they do, then will we have to elect and go by the vote of the majority.”

Everistus, who is also the Deputy President of Saint Lucia Senate, however added that majority of MPs in EU member states understand the position of ACP states.

But the Kigali declaration hails the European Commission’s decision in April this year for quota free market access that waived residual market barrier to ACP exports.

December 2, 2007

EU Fragmenting Regional Blocks With EPA’s

EPA Fragmenting Regional Blocks
Ghanaian Chronicle (Accra)

NEWS

26 November 2007
Posted to the web 26 November 2007

By Joseph Coomson

Rather than promoting regional integration, the Economic Partnership Agreements (EPAs) is rather fragmenting Africa and breaking its front as some regional blocks are signing the agreement without key countries.

The SADC region signed it last Friday without South Africa and Namibia whiles EU is pushing West Africa to sign without big brother Nigeria.

Indications from East Africa indicate that five countries from the block are ready to sign the agreements whilst Central African countries are confused about the agreements.

This situation has been described by Mr. Tetteh Hormeku of the Third World Network as chaotic and an affront to the unity of Africa both politically and economically.

“These negotiations were to strengthen regional integration but is now ended up in chaos and regional fragmentation,” he added.

The alleged agenda of EU to rather disintegrate Africa and the whole ACP was captured in a statement made by the Directorate General for Trade European Commission on November 12, 2007. The statement said “We fully appreciate that some countries may not feel able or ready to take this course, and at the end of the day if you don’t agree the choice is of course yours.”

These remarks were made during the weekend when Civil Society Organizations from Africa met in Accra to discuss the topic ‘Gender and EPAs’ from November 24 to 26, 2007.

EPAs are a scheme to create a free trade area (FTA) between the European Union and the ACP countries. They are a response to continuing criticism that the non-reciprocal and discriminating preferential trade agreements offered by the EU are incompatible with WTO rules. The EPAs are a key element of the Cotonou Agreement, the latest agreement in the history of ACP-EU Development Cooperation and are to take effect as of 2008.

However, the negotiations for the EPAs have faced stiff opposition from Civil Society Organizations and some governments from Africa because they see it as a way of liberalizing totally the service and investment sectors of the ACP countries

As there is strong indication that the EPAs will not be signed at the set date of 31st December 2007, several alternatives have been suggested by governments, civil society and the EU.

Ghana and Third World Network have proposed “Generalized System of Preferences (GSP) -plus” as a temporary stop-gap solution. By resorting to the GSP+, the EU could still easily offer to all ACP countries good access to the markets for their exports at very similar levels to the access offered within the framework of the Cotonou agreement, while remaining compatible with WTO rules as long as the regime remains open to other developing countries on the basis of objective and transparent development criteria.

However, EU has rejected the GSP+. They are considering “EPA-light” as an interesting possibility.

An “EPA-light” means an EPA proposal which is reduced to what in substance would be acceptable for West Africa (WWA) and the EU and, in the mean time, would be compatible with WTO requirements. The “EPA-light” would be a stop-gap solution, whilst WA and the EU will continue negotiating the comprehensive pro-development EPA which remains the ultimate objective.

But Mr. Hormeku thinks otherwise. He says, “The in built agenda of EPA Light could even be bigger than the EPAs”.

Victory for Africa in EU Trade Deal (EPA’s)

Victory for Continent in EU Trade Deal

The East African Standard (Nairobi)
NEWS
15 November 2007
Posted to the web 14 November 2007

By Benson Kathuri
Nairobi
Africa, Caribbean and Pacific won a major trade battle with the European Union after a deal was brokered to push the stalled negotiations to December, next year.

The EU has agreed to establish a framework arrangement that would ensure trade is not interrupted between January and December next year to give a one-year extension before a new pact is reached.

The latest pact deflates growing tension between the EU and the African, Caribbean and Pacific (ACP) countries over the trade arrangement, which gives the latter free market access to Europe.

Trade ministers and negotiators from the region met their counterparts from the European Commission on Monday in Brussels who agreed to push the deadline from the expected December 31, this year.

The EU and ACP countries are negotiating the Economic Partnership Agreements (EPAs) to guide trade between the two blocks.

Local exporters, mainly horticultural exporters had expressed fears that they would lose their market access should the two parties fail to sign a deal by next month.

Efforts to conclude the talks before the World Trade Organisation (WTO) imposed December deadline had become elusive, forcing the parties to seek a new deadline.

African nations had also accused the EU of attempts to blackmail them into signing the deal.

“They decided to conclude the negotiations of a comprehensive EPAs by the end of December next year that will replace the Framework Agreement,” said a statement released by the Comesa secretariat that is the technical arm of the ESA group.

“In this respect, the parties will put in place the necessary regulations and procedures, including the adoption of transitional arrangements by the EC, in order to avoid any trade disruption,” said the statement.

The Framework Agreement will be applied provisionally from January, next year.

Mr Felix Mutati, the Zambian minister of Commerce, Trade and Industry led the ESA delegation while EU commissioner for Trade, Mr Peter Mandelson and his Development counterpart, Mr Louis Michel represented the EU.

Sources confirmed said the two groups agreed to form a comprehensive EPA as a tool for sustainable development and the promotion of regional integration.

The two parties agreed that it was unrealistic to conclude a comprehensive EPA within the remaining period.

“They, therefore, agreed to work towards a Framework Agreement of an EPA that will comprise trade in goods, development cooperation, fisheries and any other sectors on which negotiations would have been concluded,” adds the statement.

“The framework will comprise a number of rendezvous clauses for the continuation of the negotiations beyond December.”

They agreed that a new regional protocol on rules of origin would be negotiated in the context of the full EPA.

The groups mandated experts to continue to work on the conditions for market access for sugar for the ESA group taking note of the proposals already submitted.

“Work should continue on trade defense measures for the EU market, including outermost regions, with a view to finding common agreement on outstanding issues in the Framework Agreement,” says the statement.

November 22, 2007

How Africa May Be Hurt by EPA Trade Deals

EPA Trade Deals Might Harm Continent
New Vision (Kampala)

OPINION
21 November 2007
Posted to the web 22 November 2007

By Yash Tandon
Kampala
IN the next few days, our leaders will decide whether to sign a new trade agreement with Europe. It will be a tough judgment call. The decision they make will weigh heavily on the course of our region’s development for decades to come. For this reason, the proposed agreement needs very careful scrutiny.

We have a long history with Europe in the light of which we must interpret current events. The proposed agreement by Europe will change the nature of our relationship from cooperation to one based on purely mercantile considerations. The EU and the ACP “partners” will be bound by the same rules. However, when unequal partners play by the same rules, the outcome is always in favour of the stronger side. With the proposal on the table, it is not difficult to see who is likely to win.

 

Analyses on the potential impact of the agreements prepared by the United Nations Economic Commission for Africa (UNECA) show that the proposed opening up of 80% of trade of the Eastern Africa Community (EAC) with Europe, will result in loss of tariff revenue of up to $130m per year. Furthermore, as African producers have to compete directly with those of Europe, their economies will undergo significant dislocations with regional trade losing ground at the expense of European imports. Success stories such as the growth of our regional markets for value added produce and manufactured goods could be undermined, threatening our farmers’ livelihoods and factory workers’ jobs.

Europe is using the excuse of the World Trade Organisation rules to speed up the conclusion of the negotiations. Indeed, the use of the December 2007 deadline is the single most important negotiating instrument in Europe’s favour. However, this deadline is more self-imposed than a legal reality since the Commission has options at its disposal to address the current situation which it is not willing to acknowledge. Europe is thus keeping on the deadline pressure because it chooses to do so. We can and we must turn the negotiating dynamics around if we are to reach a negotiated agreement that benefits Africa.

As the deadline approaches, individual EU members will surely assess the implications of maintaining firm the deadline for the future of the strategic relationship with the African, Caribbean and Pacific (ACP) countries. This is especially true for Africa in the context of the upcoming EU-Africa Summit in Lisbon in the first week of December.

Our leaders should capitalise on this political opportunity. On November 15, President Abdoulaye Wade of Senegal, in an open letter in Le Monde, seriously questioned the proposed agreement among others, due to its potential implications for Africa’s integration. Equally, other African leaders should join efforts to turn the negotiations with Europe into an opportunity for a better future instead of hastily accepting the agreement proposed as it stands now.

Europe has turned this into a game of high stakes and pressing panic buttons. In such games, he who moves first, loses. It is time for our leaders to hold strong, and not to panic.

The writer is a national of Uganda and the Executive Director of the South Centre (Geneva), the only intergovernmental think tank of the South

November 21, 2007

EU’s EPA Negotiator Mandelson Continues to Antagonize Africa

The following Article exemplifies how NOT to approach Africa. Mr. Mandelson has consistently tried to force Africa to accept trade agreements that are not only unfavorable to Africa but are actually harmful to Africa. His methodology can only be construed as bullying Africa into submission. Attempting to dismiss or worse, to silence any criticism of the current negotiations is counter productive. Mr. Mandelson should OPEN his ears to really hear the concerns of many Africans and even NGO’s over the current position of the EU in the EPA talks.
I urge Mr. Mandelson to go back to read the philosopher Emannuel Kant and the approach that can best be used to strike FAIR trade deals. If Mr. Mandelson continues his current approach there will not be any party happy with the results. The EU should reconsider Mr. Mandelson’s position these talks (as they are not currently negotiations anymore) and to consider an unbiased arbitrator to bring the two sides together in a fair manner. What Mr. Mandelson has fostered can only be considered as an atmosphere of contention between all parties.

Craig Eisele

THE ARTICLE:

Mandelson Attacks South Africa and Nigeria Over EPAs
Inter Press Service (Johannesburg)

NEWS
20 November 2007
Posted to the web 21 November 2007

By David Cronin
Brussels
Africa’s largest nations are trying to block the signing of the economic partnership agreements (EPAs) with the European Union (EU), Peter Mandelson, EU trade commissioner, claimed today.

Speaking to members of the European Parliament, Mandelson strongly criticised the positions taken by Nigeria and South Africa in the EPA negotiations between the EU and nearly 80 African, Caribbean and Pacific (ACP) countries.

He alleged that the larger African countries are preventing their counterparts in the regional EPA-defined groupings from signing deals by an end-of-year deadline.

The EU has threatened to impose punitive tariffs on Europe-bound exports from about half of the ACP countries if they do not enter into EPAs by December 31.

As the remaining 39 ACP participants are classified as least developed countries (LDCs), they qualify for a seven-year-old EU trade scheme, known as Everything-But-Arms, under which they would enjoy duty and quota-free access to the Union’s markets for most of their goods.

“If you go to West Africa, the regional group is dominated by Nigeria, which wouldn’t touch an EPA with a barge pole,” Mandelson said. “That’s okay for West Africa if you are relatively rich like Nigeria. But what about Côte d’Ivoire and Ghana? They are not rich, nor are they LDCs. They need an EPA to avoid disruption to trade at the end of the year.”

Similarly, he argued that South Africa, which already has a trade agreement with the EU, “does not have as much at stake” as its neighbours. He raised the possibility that EPAs could be signed with other southern African countries, if South African president Thabo Mbeki’s government rules one out.

“Am I – because of South Africa’s inability finally to commit — to say there should be no EPA for southern Africa; that there should be a disruption of trade with Botswana, Lesotho, Namibia and Swaziland?” he asked.

Mandelson’s combative stance was condemned by anti-poverty activists, who are perturbed by indications that the EU is attempting to drive a wedge between African countries, putting pressure on them to conclude deals that would prevent them from cushioning their farmers and nascent industries from an influx of European goods.

Karin Ulmer from Aprodev, an umbrella group for Protestant aid agencies, said it is “not fair” that the EU is trying to pull poor countries into an “unequal relationship”.

“Maybe it is not even the intention (to create divisions between ACP countries) but, de facto, that is what the European Commission is doing,” she told IPS.

Oxfam campaigner Luis Morago noted that Senegal’s President Abdoulaye Wade recently commented on how EU-Africa relations are “out of order” because of differences on trade. This does not bode well for the summit between European and African heads of state and government, scheduled to take place in Lisbon, Portugal, next month.

“The EU-Africa summit is meant to herald the start of a new partnership,” Morago said. “Most African countries are not convinced that what the EU has put on the table is worth signing. European and African leaders should take this opportunity to step back, rethink their approach and focus on creating a truly development-focused partnership.”

Also meeting on November 20, development aid ministers from the EU’s 27 member states, issued a statement which “expressed concern” over the slow pace of the EPA talks in some regions.

The ministers endorsed suggestions by Mandelson that agreements limited to trade in goods should be signed this year, allowing talks on other issues such as investment, competition and services liberalisation to run into 2008.

Caroline Lucas, a British Green member of the European Parliament (MEP), argued that Mandelson is putting pressure on vulnerable countries to open their markets to European goods. The Guardian newspaper in London, she remarked, had reprimanded him this week for “bully-boy tactics”.

But Mandelson, who played a pivotal role in reforming Britain’s Labour Party before being appointed to the European Commission, said he had encountered such charges since the mid-1980s. “The day that Peter Mandelson is not called a bully by The Guardian newspaper, I will throw a very large party indeed,” he said.

Erika Mann, a German Social Democrat MEP, said that some African countries would “have a lot of problems signing a free trade deal with the EU.

“The problem is that they don’t have the capacity to negotiate free trade agreements with other countries elsewhere in the world,” she added.

British Conservative Party MEP Robert Sturdy took Mandelson to task for his readiness to discuss the possibility of deals with some ACP countries that will exclude others.

“Surely the whole point of the EPAs is to facilitate and promote regional integration,” said Sturdy. “This is not about bilateral agreements. President Wade has said that the system proposed by the EU for trade is not acceptable and that EU-Africa relations are broken. It doesn’t sound as though things are going particularly well.”

Major Confusion Over EPA’s Rage in Africa

Officials Confused About Pros And Cons of EPA
Inter Press Service (Johannesburg)

NEWS
20 November 2007
Posted to the web 20 November 2007

By Aileen Kwa
Kampala
The news that the ministers of the East African Community (Kenya, Uganda, Tanzania, Rwanda and Burundi) are on the verge of signing an economic partnership agreement with the European Union (EU) has been received with mixed reactions by government officials from these very same countries.

The East African Community (EAC) ministers had agreed with their EU counterparts last week that they would sign a framework agreement on trade in goods, market access, development cooperation and fisheries by no later than November 23 this year.

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This framework agreement will reduce to zero 81 percent of current EU exports in industrial and agricultural products entering the EAC markets. The elimination of tariffs to zero will take place over a transition period of 25 years.

By the end of the tenth year, there will be a zero percent tariff on raw and capital goods. Tariffs on intermediate goods will be brought down to zero between the eleventh and twentieth year and tariffs on finished items will be brought to zero percent after 25 years.

Built into the agreement will also be a mechanism for the continuation of the economic partnership agreement (EPA) negotiations beyond December 31, 2007. The additional areas to be negotiated include liberalisation of services, intellectual property and the “new generation issues” of investment, competition policy and government procurement.

A negotiator from the region who had been involved in the negotiations felt that the outcome is good for the EAC. “Of course it is good. If it wasn’t good for us, we won’t have agreed to it.” He was pleased about the level of liberalisation, coupled with the exclusion list (19 percent of current trade), and the transition period. Tariff reductions will only commence from 2010.

Other government officials from the region, however, expressed unease. A major issue between the negotiating partners had been over “development”. The EAC had presented the EU with a matrix of projects they wanted the richer nations to fund.

According to an inside source from Nairobi, Kenya, who spoke on condition of anonymity, “what is not clear is what we are getting in the ‘development’ framework. I don’t know how concrete or binding this development framework is. It is a total mess, but unfortunately we are already there.

“Are we getting additional funds? The EU is saying they will be using the current EDF (European Development Fund). We have been conned into this thing. Here we are, opening our markets to the EU, and in return we are getting a ‘best endeavour’ (non-binding) development framework,” he told IPS.

“We don’t know, in concrete terms, where the funds are coming from — if there are no additional funds. So this interim arrangement is just about opening up our markets for EU,” he said.

Another government official from Kampala, Uganda, raised similar concerns: “I think there is an EAC development plan. Most probably that is what has been picked up for support under ‘development’.

“In terms of funds, are we getting anything over and above what we would have got (without the EPA) or are we getting the same? Those answers are not very clear and nobody can tell you. We know that the EDF is coming. Maybe it will still be the same amount of money.

“But we are told that the EU has been the major funder of our roads, so we need to agree with them (on the EPA). So it is a bit tricky,” the Ugandan official said, on condition of anonymity.

When asked how the package might affect the agricultural sector in Uganda, there was some uncertainty. The Ugandan official commented, “there is a list of sensitive products which has been excluded from liberalisation. I am told that the (EU agricultural) subsidies are not open for negotiation.

“This means that, tentatively, (the EAC will not open its markets) to those products that the EU is subsidising, such as beef and dairy. But when you look at Rwanda, they are importing a lot of milk from the EU. How are Uganda and Tanzania going to keep the milk out? If there are no border measures, the milk can easily come here.”

To the question whether the EPA will affect the industrial sector in Uganda, he commented: “We don’t have much of an industry to talk about, really. Maybe the problem is upcoming industries, I don’t know.

“It could be a catch-22. Maybe we can attract investment or maybe it will discourage our local entrepreneurs who have already started something or who could have started something”, were it not for external competition.

He gave the example of small grocery stores that are currently being pushed out of the market. “They are being swallowed by supermarkets. These small shops were supplying extra services. You could get a few things and pay later, and they were in the suburbs. Now, with the coming of supermarkets, some are pushed out.

“They are no longer competitive. We are not sure whether those (EU) people will come in (as a result of the EPA) and displace the small people.”

He also raised the issue of neighbours benefiting at the expense of Ugandans. “What if Europeans decide to put up industries in Kenya and don’t come here?

“Unilever is in Kenya and they are bringing all the products here — soap, toothpaste — to our supermarkets. So the people benefiting are Kenyans and there is no guarantee that we will benefit, although we are talking as EAC.’

“When you look at the Kenyan private sector, their export volume is quite high. But when you look at ours, the volume is a bit low. Ours could go under the EBA (the EU’s Everything-But-Arms trade initiative). I don’t know if our private sector is aware of this. If they are not, they might be told that by January, their products will attract a higher tariff.”

As a least developed country (LDC), Uganda can avail itself of the EBA preferential arrangement of the EU which provides zero duties on all LDC exports.

The Kenyan official had this to add: “We are better off with the generalised system of preferences (the tariff rates which the EU offers to all countries). The duties are high but they would not have stopped us from exporting and we would not have had to open our markets for the EU.

“But now the EU is telling us to pay a price for the preferences we are receiving from them by opening our markets. Even when we do this, the countries we fear will still be more competitive – India, Korea and others. The EU is already entering into free trade agreements with them. So there is nothing we are gaining by opening up.

“But the political aspect comes into play. The politicians say we need to reassure some of the key players, particularly in horticulture, that trade will not be disrupted (at the end of the year). Just because of horticulture, we are opening up our markets.”

November 18, 2007

The EPAs – About Development or Exploitation?

The EPAs – About Development or Exploitation?

Inter Press Service (Johannesburg)
NEWS
1 November 2007
Posted to the web 1 November 2007

Analysis By Sue Scott
London
Europe’s paternal trading relationship with African states threatens to end in an almighty family fall-out if they fail to sign the economic partnership agreements (EPAs) by the end-of-year deadline.

European Union trade commissioner Peter Mandelson went on the offensive this week, accusing non-governmental organizations of “ignorance or prejudice” in “wholly misrepresenting” the aims of the deals.

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The EPAs, he argues, are desperately needed by African, Caribbean and Pacific (ACP) countries to move out of poverty. So what is there not to like?

Aggressively promoted by Europe as necessary to meet its commitments under World Trade Organisation (WTO) rules, but attacked by critics as a Trojan horse that could wreck Africa’s economic progress and do little for its political self-determination, the EPAs are likely to remain a bone of contention way beyond the January 1, 2008 deadline.

No one disputes that the preferential trade arrangements historically enjoyed by Europe’s former colonies are in need of reform. But it is contested whether reciprocal trade agreements in the form of EPAs will be an improvement.

The delays in the EPA talks have to a large extent been blamed on the EU’s inclusion of the so-called “Singapore issues”. A far-reaching set of institutional reforms that Europe linked to market liberalisation, they were first introduced into trade negotiations by rich nations at the WTO meeting in Singapore in 1996.

The “Singapore issues” are “new generation” or behind-the-border regulatory reforms that address the areas of investment protection, competition policy, government procurement and trade facilitation. Developing states managed to get them off the WTO agenda, only to find them reintroduced in the bilateral EPAs.

While the EU has since agreed that concluding the “trade in goods” section of the EPAs by the year-end deadline would be sufficient, the “Singapore issues” will remain on the table for conclusion later on.

They involve a raft of provisions, the implications of which may not be fully appreciated by many African countries, says Dr Sanoussi Bilal, co-ordinator of the European trade co-operation programme for the European Centre for Development Policy Management (ECDPM). He was an observer during recent EPA negotiations.

Bilal has deep reservations about the pace and extent of the EPAs, which, he says are in danger of being passed by default. Even of central Africa, the region closest to concluding the deal, he remarks: “I don’t know if they understand what they are signing.”

ECDPM is just one of a number of non-government organizations (NGOs) concerned that EPAs are a “blank cheque” for European business to profit from African economies without guaranteeing “a positive balance sheet for development” in return. Bilal says even signing a goods-only trade agreement at this stage may be leaving some African countries hostage to fortune.

In particular, NGOs highlight concerns over the transfer of intellectual property rights, foreign direct investment (FDI) in service sectors such as banking, transport, communication and energy markets, and the liberalization of government procurement procedures, a bête noir for Europe, often accused of being a cloak for corruption.

While the main plank of the EU argument is that economies outside of the ACP are growing at a faster rate than those within the group because they are more attractive to foreign investors, NGOs counter that FDI can bring costs as well as benefits.

Indeed, some elements of the EPAs are prescriptive enough to restrict African countries’ ability to strike strategic deals. Opponents talk of a “loss of policy space”, which may limit pursuit of development objectives outside of the EPA regime.

Some are as critical of opportunities missed as much as liberties taken, particularly in the fraught legal area of intellectual property rights, arguing that potentially positive measures around intellectual prpoerty rights are absent from the EPAs.

These include the transfer of technology, joint ventures, prevention of biopiracy and misappropriation of traditional knowledge by EU companies.

But that involves a level of detail way beyond the capacity of many of the resource-restrained African negotiators to fully engage with, says Dr Mareike Meyn, research officer in the international economic development group at the Overseas Development Institute, based in London.

“When it comes to competition policy, for example, some countries have not even drafted a competition bill, let alone implemented it, so committing them to build up a regional competition authority (as foreseen in some EC drafts) is very difficult. There are fears among African policymakers that they are not able to make those commitments.”

Bottom-up, bespoke documents are needed take into account African states’ different levels of economic development, rather than a top-down template for reform, says Meyn.

“In the case of east Africa and southern Africa, we have 15 highly heterogeneous countries. Some of them are economically integrated at the sub-regional level but for most economic integration is in its infancy. Plus, some are in a conflict or post-conflict situation.

“If the EU is interested in promoting economic development with EPAs, they should take countries’ different development levels into account and not overextend them.

“It doesn’t make sense to include issues that a partner fundamentally objects to and yet argue it is development friendly,” Meyn argues.

Bilal agrees. “Why can’t we have separate templates for each country? The EU Commission will say ‘we do not impose anything’, but the reality is even when the regional negotiators are good, at a national level they do not follow what’s happening and, at the end of the day, those agreements are going to be signed at a regional level.”

EU Seeks Comprehensive Ties With Africa

EU Seeks Comprehensive Ties With Region

BuaNews (Tshwane)
NEWS
1 November 2007
Posted to the web 1 November 2007

By Grace Kasungami
Brussels
The European Union (EU) says there is a need for a more comprehensive partnership, and more coherent policies towards Africa.

This sentiment was outlined in a report issued by the European Commission (EC) to the European Parliament, this week, adding that African economic prosperity is essential to European prosperity.

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The EC which is the EU’s executive arm, said it is becoming increasingly clear that Africa matters because of its political voice, economic force and a huge source of human, cultural, natural and scientific potential.

Ten African journalists currently in Brussels on a fact-finding mission meant to enhance their knowledge about Europe, were also furnished with this report.

Later this year in Lisbon, Portugal, the current EU chair will host the long awaited Africa-EU Summit on 8 and 9 December.

The Commission in Brussels said the EU remains the first economic partner of Africa with exports of merchandise to the continent amounting to 91.6 billion Euros and imports from Africa reaching 125.6 billion in 2005.

The EC also reveals that Europe’s collective Official Development Assistance (ODA) for 2006 was pegged at 48 billion Euros.

The EC has also observed that China is rapidly emerging as Africa’s third most important trade partner with total trade amounting to about 43 billion Euros in 2006 from 30 billion Euros in 2005 and that 23 per cent of Chinese oil imports come from Africa.

Meanwhile two top European officials say the Economic Partnership Agreements (EPAs) which the EU is currently negotiating with the six African, Caribbean and Pacific (ACP) regions are designed to give developing nations more opportunities for local business, attract new investment and build stronger regional markets.

In an open letter to anti-poverty campaigners here Wednesday, EU Trade Commissioner Peter Mandelson and EU Development Commissioner Louis Michel say the EPAs would take a trading relationship based on dependency to a trading regime based on economic diversification and growing economies.

They say Europe’s trade and development policy is to use trade to help ACP regions build stronger economies and break their dependency on trade preferences and basic commodity trade.

The two commissioners dispute misconceptions from critics that the EU is trying to force ACP regions into completing negotiations this year, saying the EU is doing everything possible to be flexible.

The commissioners explain that the suggestion that EU extends its Generalised Systems of Preferences (GSP ) to ACP regions to avoid the end of year deadline cannot not work as the GSP only gives extra trade preferences to countries that ratify and implement core international agreements on labour and sustainable development.

The commissioners add that contrary to statements that the EPAs will not be fair as they will open ACP markets to EU trade at the expense of local businesses and growth, the EU will provide a full removal of tariffs and quotas, with a temporary exception of sugar and rice.

“EPAs will not mean free trade between the ACP and the EU from Jan 1, next year or any time soon. This is not true. This scenario does not exist,” they say.

They add that the EU will ensure that there are no export subsidies on any goods where ACP countries remove tariffs to protect local ACP businesses from competing against subsidized EU produce.

The commissioners explain that ACP countries will also be able to protect and exclude sensitive products and take advantage of long transition periods to nurture growing industries.

According to the commissioners, the EU will also, during the same time, provide substantial technical and financial support to help with the implementation of the new arrangements.

“The whole process will be backed up by a considerable package of development assistance; the ACP countries will be major beneficiaries of the decision to increase Europe’s spending aid for trade to 2.0 billion Euros a year with a priority given to measures that help implement EPAs,” they say.

The commissioners stress that the money will also help ACP countries to prepare new structural reforms and trade policies, adjust to the changes they bring and enhance infrastructure and competitiveness to seize trade opportunities.

The EU has also agreed to rewrite its rules of origin to further improve the market access opportunities for ACP exporters.

The EPAs are the agreements that the EU is negotiating with the six African Caribbean and Pacific regions that will replace the trade chapters of the Contonou agreements when trade preferences of this agreement expire in 2008.

September 29, 2007

US Companies losing in Africa

Yes, The headline is correct. Companies in the USA are losing out on major business opportunities in Africa… as are European Companies… and they are losing to China!!

But do not take my word for it, google “China Africa” and you will see for yourself. China is not only winning in Africa they are moving at an ever increasing pace and will dominate African trade and be the primary “investor” in Africa because of the “west’s” inability to effectively coordinate investment strategies.

What do I mean by coordinated investment strategy…. it is not a complicated idea…. it is the working with other companies in a form of horizontal integration to assure the success of the investment.

For example: If the US Company is interested in Mining. then transportation becomes an important issue… yet the availability of efficient roads or rail transport is limited at best.

The coordination becomes searching for partners who wish to build a Trans-African Railroad or who are interested in highway/road development such as Trans-African Development Company.

Telecommunications and Internet is similarly available by numerous companies wishing to justify their investment and looking for “customers” to make their network affordable.

Electricity or other power sources also lend themselves to partnering with such companies.

Simply: Since no “company” has the ability or resources of a COUNTRY… like China…. then Companies interested in investing in Africa MUST find a way to compete NOW…. by affiliating with other Companies, Groups or Organizations that can facilitate their Investment into Africa.

This Article is somewhat self serving… yet it should also help Companies interested in investing in Africa, a Strategy for making such investments.

Self-serving because Trans African Development is looking to rehabilitate the road infrastructure that could make their investment economic model look better and increase the feasibility of such investments. HOWEVER, Trans African Development is NOT looking for investors to rehabilitate the existing road infrastructure in Africa… Yes, we are looking to raise the 50 million Euro to jump start our efforts in Africa… BUT, the real money to rehabilitate MUST come from those Governments of the Industrialized world to rehabilitate the basic road infrastructure in Africa.

DRC (Democratic Republic of Congo) has but 300 miles of PAVED roads… yet it’s land mass is that of ALL of Western Europe. It is not enough to get a concession for the development of Natural resources in DRC… it must be transported to global markets.

Trans African Development is looking for sponsors to implement a strategy of marketing and promotions and PR to raise the funds for this Road rehabilitation that will not only bring African gratitude to those countries (and therefore those countries Companies) but will help hundreds of millions of Africans as well as give these “traditional” Western Companies access to those resources and be able to effectively compete with China for those resources and markets.

Sadly I believe that the “traditional” Western Companies may be too late already as their existing strategists have lacked the ability to think beyond their industry and their standard business models. But I welcome feedback form those “Companies” who wish to find alternatives to their current models and who are willing to seek markets outside the black box of traditional thinking that will only cause them to lose out to China in the long run especially in Africa.

September 23, 2007

African Countries Should REFUSE to Participate In Any Further EPA Negotiaions UNTILL…

Personal Opinion:

Given the obvious arrogance and condescending attitude of Peter Mendelson in his interactions with Africa and African Leaders and Trade Negotiators it is only reasonable to ask for… and even demand… his removal from all future EPA trade negotiations.

While I would offer my own services to end the impasse between the EU and Africa, I am afraid that Mr. Mendelson’s actions have not only put the EU in a bad position for these negotiations but has given Africa cause to embrace China and China’s more favorable terms and conditions on trade and investment.  Besides I doubt the EU could afford my services.

The current anomosity brewing in these negotiatyions is obviously caused by a mentality the does not recognize the differences in the African countries, nor shows respect for the needs of each African Country. The manner in which Mr. Mendelson has proceeded has only caused roars of neo-colonialisnm and raised questions as to what is the stick and where is the carrot in these negotiation.

As such it is only reasonable that African Countries STOP all discussions until Mr. Mendelson and his equally unmovable colleges are removed from these EPA discussion.

The faster the EU acts, the faster the Trade Negotiations can be productive and ease the animosity between the EU and Africa that Mr. Mendelson has caused. Unless of course the EU wants this division, in which case it has the right man to do the job.

Mandelson Continues to Alienate in EPA Talks

Mandelson Urges Final Push in EPA Talks

Ghanaian Chronicle (Accra)
NEWS
13 September 2007
Posted to the web 13 September 2007

By Joseph Coomson

EU Trade Commissioner Peter Mandelson on Tuesday urged ACP governments to join a final burst of negotiations to successfully complete Economic Partnership Agreement negotiations by the end of 2007.

He warned that there would be no legal basis for the extension of existing preferential trade terms between the EU and the 78 African, Caribbean and Pacific countries if the two sides do not initial new Economic Partnership Agreements before the end of 2007.

In the absence of such agreements, Mandelson said, the EU and the ACP would have no legal alternative but to switch to the EU Generalised System of Preferences which would mean less-generous tariff preferences for many ACP countries.

Speaking to the European Parliament’s International Trade Committee, Mandelson said: “I have no hat and no rabbit to pull out of it If we have no new trade regime in place by the end of this year the Commission has no legal option but to offer the region concerned [less generous] GSP preferences.

“This deadline is not a bluff or some negotiating tactic invented in Brussels. It is an external reality created in the WTO in Geneva. We are committed to replace Cotonou trade preferences with a new trade regime that does not discriminate against non-ACP developing countries. We have to do this by 1 January 2008″.

Mandelson said the European Commission was committed to a successful negotiation.

Noting that the EU has offered to eliminate all tariffs and quotas on all exports from ACP countries as part of an agreement, Mandelson said: “In the time we have available, we will do everything we can to ensure the ACP regions get the best legally secure EU market access available. I believe that EPAs remain attainable for every region, and we will continue to work for success”.

China WINS as EU Bullies Africa on EPA’s

Europe Cautions Africa to End Trade Impasse

Business Daily (Nairobi)
NEWS
13 September 2007
Posted to the web 13 September 2007

By Allan Odhiambo
Nairobi
The European Union has blown the whistle on Kenya and its African Caribbean and Pacific (ACP) counterparts over ongoing market access negotiations with a warning that it will not extend existing preferential trade terms should the talks fail to beat the December 31 deadline.

Mr Peter Mandelson, the EU Trade Commissioner, said there was be no legal basis for extending existing preferential trade terms saying ACP nations should prepare for less generous market access terms in the new year.

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“I have no hat and no rabbit to pull out of it…if we have no new trade regime in place by the end of this year the commission has no legal option but to offer the region [less generous] GSP preferences.

This deadline is not a bluff or some negotiating tactic invented in Brussels. It is an external reality created in the World Trade Organisation in Geneva.

We are committed to replacing Cotonou trade preferences with a new trade regime that does not discriminate against non-ACP developing countries. We have to do this by January 1,” Mr Mandelson told the European Parliament’s International Trade Committee on Tuesday evening.

Analysts said extension of the preferential trade terms would have provided a safety net for most ACP nations struggling to land new Economic Partnership Agreements (EPA) before expiry of the deadline.

This latest stand by EU puts to rest any hopes of possible extension because such a move would require the EU to apply to the World Trade Organisation for a waiver to extend the preferential trade arrangement with ACP member states.

Mr Mandelson said though negotiations with ACP countries were on course, concern was rising over progress in a number of regions including East Africa where issues of regional groupings and the platform of negotiating the new EPA remain unresolved.

“It is disappointing that a few weeks from the effective deadline for concluding an EPA these difficulties continue to hinder progress,” Mr Mandelson said.

“I have spoken recently to those concerned and all I can do today is to reiterate my plea that these issues need to be resolved now. It will not serve the interests of any country to be seen to be holding up the region as a whole.”

Mr Mandelson’s plea came as senior Government officials from the East African Community (EAC) arrived in Arusha for a two-day meeting meant to make a final decision on what platform would be used to sign a new EPA with the EU.

“We hope to reach a common ground on EPA. We are optimistic something tangible will come out of it,” said Mr David Nalo, the Trade permanent secretary.

EPA negotiations have slowed down in East Africa mainly because of Tanzania’s membership in Southern African Development Community (SADC) to the exclusion of other East African Community member states.

EAC member states have been negotiating new trade deals with the EU under the Eastern and Southern Africa (ESA) platform that is backed by the Common Market for Eastern and Southern Africa (Comesa) that Tanzanian abandoned four years ago.

Provisions of the WTO treaty, however require EAC member states to sign new deals with the EU as one Customs Union, meaning that all the five members have to provide a joint text for negotiations.

This requirement is what forced Tanzania to return to the regional fold and demand that new talks start under the EAC platform- a scenario that didn’t augur well with Kenya and other EAC members who maintained with less than three months to the December deadline, it would be impossible to land new deals if the negotiations were started afresh as a regional bloc.

They proposed that they build on the progress already attained under ESA- a path that Tanzania seems uneasy to walk.

EAC Heads of States last month ordered that officials explore possibilities of landing a joint EPA with the EU.

Mr Nalo however took issue with the EU for delaying responses to development texts presented to it for comment under the ESA platform, saying it had substantially pulled back progress.

“It is wrong for the EU to lambast us lump some because they have for instance delayed feedback on the development text forwarded to them for comment. They should stop posing gimmicks of negotiation to paint us negatively,” he said.

Projections by Kenya show that it stands to lose close to Sh114 billion in trade and investment should it fail to land new EPA with the EU largely because some of the products which it has been exporting to this key market at zero duty would now attract duty ranging between 8.5 per cent and 15.7 per cent.

Mr Mandelson however said despite the time pressure, the EU remained committed to ensuring they had new and favourable trade deals with all regions.

“In the time we have available, we will do everything we can to ensure the ACP regions get the best legally secure EU market access available. I believe that EPAs remain attainable for every region, and we will continue to work for success,” he said.

The official stated they will prepare for the rapid implementation of the various legislative and procedural steps needed to put EPAs into place in time to avoid a WTO challenge.

EU Warns Continent On Bilateral Trade … Pushes Africa Closer to China Trade

If the EU continues this line of negotiations I personally believe that ONLY China will benefit!..

Article below: 

EU Warns Continent On Bilateral Trade

Business Day (Johannesburg)
NEWS
13 September 2007
Posted to the web 13 September 2007

By Mathabo Le Roux
Johannesburg
THE European Union (EU) this week issued a stern warning to African countries negotiating economic partnership agreements (EPAs) with the union, saying that if negotiations were not completed by the end of the year, bilateral trade conditions between tho se countries and the EU would revert to the General System of Preferences (GSP), a more onerous trading regime. This would result in countries now enjoying favourable terms under the Cotonou agreement to lose those preferences.

The EU is negotiating EPAs with African, Caribbean and Pacific countries to replace the Cotonou agreement, which is incompatible with World Trade Organisation (WTO) rules.

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A waiver on the agreement expires at the end of the year.

The implications of the EU’s warnings for Southern African Customs Union countries are mixed. However, trading under GSP would not affect SA, as the country’s trade relationship with the EU is governed by a separate agreement – the trade, development and co-operation agreement.

Lesotho, as a least-developed country, is also shielded, as its trade with the EU would switch to an EBA. However, Botswana, Namibia and Swaziland are vulnerable. Disconcertingly, the EU cited SA’s “deeply negative” stance as holding up the crucial trade talks.

“Botswana and Namibia’s situation is most precarious and Swaziland is also vulnerable. Their trade with the EU will have to revert to GSP terms, which has slightly more onerous rules of origin terms, but more importantly also does not cover all products as favourably, for example beef and table grapes,” said Eckart Naumann, an economist and associate of the Trade Law Centre for Southern Africa.

Briefing the European parliament’s international trade committee this week, EU trade commissioner Peter Mandelson said there will be no legal basis for the extension of existing preferential trade terms if the EPAs are not finalised.

“This deadline is not a bluff or some negotiating tactic invented in Brussels. It is an external reality created in the WTO in Geneva.”

While talks with the Caribbean and Pacific regions are well advanced, prospects for concluding a deal before year-end with some of the African blocks are dim.

Mandelson singled out the negotiations with southern Africa as being of concern and in particular SA’s role. He said the ability to deliver an EPA with southern Africa largely depended on the region’s powerhouse.

Should EU’s EPA Trade Minister be REPLACED??

See  article below! It make me wonder if the EU should replace Peter Mendelson as their negotiator… the result of this man’s position could mean that Africa will move even closer to China for trade. This seems to be supported by what seems to be a 5 Billion Dollar deal between Congo (DRC) and China last week.

Power Struggle Continues With Unbalanced EPA Talks
Inter Press Service (Johannesburg)

NEWS
21 September 2007
Posted to the web 21 September 2007

By David Cronin
Brussels
African nations have been reduced to “begging” in negotiations on their future economic ties with the European Union (EU) in what has turned into exercise “assaulting democracy,” according to trade unionists and policy analysts from both north and south.

Trade talks have intensified in recent weeks between the EU’s executive, the European Commission (EC), and representatives of African, Caribbean and Pacific (ACP) governments. The Commission wants ACP countries to sign market-opening deals known as Economic Partnership Agreements (EPA) with it by the end of this year.

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Timothy Kondo from the trade union umbrella group Alternatives to Neoliberalism in Southern Africa (ANSA) said that the Commission has not been taking the concerns of poor countries seriously in the talks. Instead, it has been concentrated on reducing obstacles faced by western firms wishing to do business abroad.

“The attitude of the EU has to change,” Kondo told IPS. “Our governments in Africa have not been negotiating in the proper sense of the word. They have not been involved in what we trade unionists call collective bargaining. They have been involved in collective begging.”

“That is not to blame our governments. You shouldn’t blame the weak. The level of development between Europe and Africa is not the same. But the focus of the EPAs has been on removing barriers to trade between partners that are not equal,” Kondo continued.

Kondo took part in a Sep. 18 conference on the EPAs organised by left-wing members of the European Parliament.

He complained that suggestions put forward by ACP governments during the talks have been rejected by EU officials.

ACP countries have long argued, for example, that the talks should not cover such topics as competition, investment and government procurement. Yet the draft EPAs prepared by the Commission in the past few months have contained provisions on these issues, which primarily relate to the access that foreign firms would have to ACP markets.

Marc Maes, a trade campaigner with the Belgian anti-poverty group 11.11.11, said that most of the six ACP regional configurations with which the EU has been negotiating have refused to accept the Commission’s drafts. “West Africa has been very explicit on that,” he noted.

Nonetheless, the Commission has decided to keep its proposals on the table. “The texts that the Commission has tabled have reflected the Commission’s approach to global trade,” said Maes. “They do not reflect the interests and needs of ACP countries.”

The Commission has threatened to impose punitive tariffs on ACP exports bound for Europe if their governments do not sign EPAs by Dec. 31.

Earlier this month, the European commissioner for trade Peter Mandelson told members of the European Parliament (MEPs) that he would not consider offering more preferential treatment to ACP countries than the EU’s general system of tariffs if the Dec. 31 deadline cannot be met.

London Green MEP Caroline Lucas said that she had become accustomed to Mandelson’s “very blunt manner” from his involvement in British politics during his time the closest confidant to former UK Prime Minister Tony Blair. “But even I was shocked by the aggressive and bullying tone he adopted (in ruling out alternatives to the EPAs),” she said.

Addressing the European Parliament’s international trade committee on Sep. 11, Mandelson said it was “irresponsible” for anti-poverty activists to claim that tariffs would not have to be imposed on ACP countries if they do not sign the EPAs by the end of this year.

Mandelson maintained he has “no legal option” other than imposing tariffs in such an eventuality under rules set by the World Trade Organisation. A waiver to WTO rules applying to current EU-ACP trading arrangements will expire on Jan. 1 2008.

“I have no hat and no rabbit to pull out of it,” Mandelson said.

Mamadou Cissokho, president of the Network of Peasant Organisations and Producers in West Africa (ROPPA), said that ACP governments “are not negotiating, they are simply reacting to proposals put to us by Europe.” “European Union documents have been taken as the basis of our negotiations,” he said. “And all of the negotiation meetings have been funded by the EU.”

He pointed out that the EU spends 130 billion dollars per year on agricultural subsidies, even though farmers comprise just 4 percent of the Union’s population. Despite the huge competitive advantage enjoyed by European farmers, the Commission has urged ACP governments to reduce, and in many cases eliminate, the tariffs they apply to food imports from Europe.

Such trade liberalisation will have profound implications for small-scale African farmers and “jeopardise” the continent’s ability to feed itself, according to Cissokho. “Opening up markets willy-nilly means the traditional production methods we have in Africa are not going to be guaranteed or maintained,” he said.

Italian MEP Vittorio Agnoletto said that the Commission is trying to “claim that David and Goliath are equal” in the EPA talks.

“Frankly, this is a farce,” he added. “In this case Goliath – that is, the EU – is playing a false hand because it is not removing agricultural subsidies aimed at its exports.”

Agnoletto voiced concerns, too, over how the Commission has suggested that the EPAs commit the ACP side to a robust protection of intellectual property rights. By doing so, he contended, countries would be impeded from circumventing patents on drugs by importing cheap generic versions of treatments for AIDS and other major diseases. Some 30 million people in Africa are HIV positive.

Alexandra Strickner from the Institute for Agriculture and Trade Policy (AITP) in Austria argues that there had been a lack of debate in both Europe and in developing countries about the likely implications of the EPAs. It is particularly vital, she said, that parliaments should be given a formal role in scrutinising the accords.

“Mandelson is saying he would like to have the EPAs implemented immediately, without any ratification process in the ACP or in Europe,” she explained. “This is an incredible assault on democracy.”

September 20, 2007

Why Are MOST African Countries Reluctant to Liberalize Trade??

Why Countries Are Reluctant On Trade Liberalisation – Customs Chief

Daily Trust (Abuja)

NEWS
17 September 2007
Posted to the web 17 September 2007
Mr Buba Gyang, Comptroller General of the Nigeria Customs Service (NCS ), has explained why most African countries were reluctant to drop duties on imports.

“They (duties) provide a large part of their annual revenue,” Gyang told the News Agency of Nigeria (NAN) yesterday in Accra, Ghana.

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According to him, some African countries depend on the duties for more than 60 per cent of their annual revenue.

“If you look at the issue of collapsing trade barriers from one point, you will realise that the customs’ duty is a barrier but how many African countries will be willing to part with the duties ?”, he asked.

He said Nigeria, which has one of the largest economies on the continent, generates about

N400 billion from customs’ duties and other taxes, making it the second largest earner after petroleum.

According to him, a country like Ghana depends on the duties for about 50 per cent of their total revenue while the other West African countries wait on the duties to augment their budgets as well.

“That is why the African countries are asking the European Union, which brought in the idea of the Economic Partnership Agreement (EPA), to spell out alternatives, ” he said.

The EPA is a proposal by the EU to African, Caribbean and Asian countries to agree on liberalising their borders by the end of the year.

The Customs boss said the alternatives or development packages to supplement the revenue loss at the borders and ports had not been clearly spelt out by the EU, making many African countries reluctant on the EPA.

September 9, 2007

Africa’s Civil Society Accuses EU of ‘Bribing’ Continent

Civil Society Accuses EU of ‘Bribing’ Continent
Ghanaian Chronicle (Accra)

NEWS
7 September 2007
Posted to the web 7 September 2007

By Joseph Coomson

Civil Society Organisations (CSOs) have condemned the European Union (EU) for abusing the December deadline to put unjustifiable pressure on African governments to concede to its terms in the ongoing negotiation in the Economic Partnership Agreements between the EU and African Caribbean and Pacific (ACP) countries.

They cautioned African governments not to buy into the EU’s false claims. The CSOs from several African countries meeting in Accra yesterday re-stated that Africa has everything to lose and nothing to gain by signing Economic Partnership Agreements (EPAs) with the European Union.

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Contrary to European Union claims, African countries do not need to sign the EPAs to maintain their current market access levels to the European market.

Civil Society stressed that African countries can adopt the General System of Preference plus (GSP+) which will enable African countries to continue to have access to EU market at levels similar to what they enjoy now, and even an improved one.

“The EU claim that only the EPAs can guarantee this continued access is totally false”, said Tetteh Hormeku of Third World Network-Africa (TWN-Af).

He said signing onto the EPAs will trigger severe loss of jobs, threaten the peace of the continent, and strangle Africa’s right to evolve and pursue its own development agenda and lead to recolonisation of Africa by Europe.

According to him, the EPAs, if signed in its state now, will lead to the elimination of tariff but any tariff reduction and elimination will necessarily involve huge fiscal costs and many costs of implementation to Africa and other African, Caribbean and Pacific (ACP) countries.

The EU’s promise of two billion euros under the European Development Fund (EDF) to help with the cost of adjustment under EPAs was also described as false, misplaced and at best self-serving.

He said in the first place, the so-called additional two billion euros for adjustment is non-existent. “The additional funds is in fact only 700 million euros and this is meant to be shared between the 71-member ACP group of countries and other developing countries in Latin America,” he stated.

The Civil Society stressed that the EU money is not even sufficient to cover ACP losses arising from EPAs. EU’s promised aid “has nothing to do with development. It is more about buying acceptance of agreements by giving money”, said Marc Maes (of 11.11.11, Belgium), adding “EU aid will not right EPA wrongs”.

It further noted that the EU is also manipulating the expiration of the Cotonou waiver on December 31, 2007 to send panic waves to African leaders that African exporters will lose access to the European market after this deadline.

According to the outcome of the civil society meeting, the European Union is bound by obligation under the Cotonou Agreement, which has the force of international treaty, with the ACP to maintain market access for countries that decide not to sign the EPAs.

“The EU has deceived our governments, private sector and the horticultural sector that They will lose their markets after December 2007 and about alternative to EP As” said Jane Nalunga’ of SEA TINI, Uganda.

The EU is hiding its own offensive interests in market access, service, investment, and intellectual property interests. The EU contends that it has no offensive interests in market access negotiations in West Africa for instance. However the EU has raised concerns in its member countries about ‘buy national’ products campaigns in ECOW AS countries, said Ofei Nkansah of the Ghana Agricultural Workers Union.

Again EPAs claim to support regional integration was seen as false as ACP producers will lose regional markets to cheap and subsidized European products.

Civil Society went on to note that in spite of the obviously severe handicaps of the EPAs and the damage they will inflict on African economies and peoples, African leaders and regional blocks continue to negotiate for the EPAs.

“This is too high a price to pay” said Thomas Deve, the Project Officer of MWENGO, Zimbabwe. He said the Cotonou Agreement provides for countries not to sign on EPAs, African and therefore CSOs call on governments and negotiators to call the bluff of the EU and reject the EPAs.

East African Leaders Interested in African People or African Markets?? Scathing Op-Ed Piece

East African Leaders Go Into Slow Motion

Weekly Trust (Kaduna)
OPINION
4 September 2007
Posted to the web 4 September 2007

By Dr. Tajudeen Abdulraheem
Kaduna
At the historic summit of the AU in Accra in July President Yoweri, Kaguta Museveni of Uganda, was one of the surpriseed pro-gradualism leaders who made it easy for the other leaders principally led by South Africa’s Thabo Mbeki, who are only interested in Africa and Africans as markets rather than peoples, to gain their pyrrhic victory.

His reasons for becoming a latter day gradualist at the continental level while he had been a faster-faster unionist and ardent promoter of the political federation of East Africa was that regional integration needed to be consolidated because there was more likelihood of convergence on economic, social, political and even historical non state linkages that would make this possible. That was the mantra of all leaders in Accra. Many of them not known for caring much about their people’s wishes also became listening leaders in Accra, arguing that the bulk of the people have not been consulted. How one wishes that this love for consulting the people was genuine! How many of them bother to even consult their own cabinet, parliament or political parties before signing away the future of their countries to foreigners in the name of encouraging investment? Did any one of them subject their neo-liberal policies to the masses’ consent?

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The main political gain in Accra for those of us who believe in immediate political union was that nobody, no head of state argued against political union. What they lacked was just the courage to agree to concrete steps towards it, instead they heed behind ‘step by step’ and the need to consolidate regional economic communities (RECs) which was a very seductive argument but used to subvert the African Unity agenda. For instance, if indeed post apartheid South Africa had been interested in regional integration in the SADC region instead of just expanded markets for South African goods and services that region could have been more integrated with full freedom of movement by now. Confronted with the prospects of African Union, President Mbeki suddenly discovered the virtue of regional integration!

President Museveni must be reflecting over his Accra opportunistic switch now that his pet dream of faster political integration and federation of East Africa has been deferred at the recent summit of the East African states.

How can you argue for gradualism at the continental level and not concede the same at the regional level and also at the national level? That is the ridiculous but logical conclusion of the gradualist argument on Pan Africanism. They will never be ready.

In the 1960s, they used to argue that the nations newly liberated from colonialism were too young, needed consolidation therefore, could not go for political union continentally. More than four decades for most of them not many of them have been united. If gradualism is the route we should all be one happy family in the various countries but are we? So now they have shifted the goal post to ‘let us unite the region first’. And even that they want to do gradually!

Even those of us who believe in immediate union have no illusions that it would happen over night, but if we agree that destination the way we approach it will be radically different. We will give the required political authority and financial resources to the AU to carry out clearly defined functions on our behalf and align our regional and national policies accordingly. The RECs route would have been more sensible if there are not many of them wrecking any prospects of unity. We declare them to be the building blocs of the Pan African Enterprise but for more than four decades we have remained at the foundation level!

Actually, we keep building new foundations. Hence our states belong to more than one regional economic groupings. If you have so many foundations, when are you going to finish the building?

There are practical reasons why the East African Federation timeliness needed to be changed given its recent enlargement with the ascension to full membership by Rwanda and Burundi but these are not enough to halt the match towards political union. The presidents must stop looking at these issues as either/or.

How can the EAC leaders expect to negotiate the European Union dictated Economic Partnership Agreements (EPAS) regionally or form custom unions when they all belong to more than one regional economic block? Tanzania which ironically is now the most reluctant regional integrator ( Nyerere must be turning in his grave because he even offered to delay Tanzania’s independence for the sake of greater East Africa!) is in SADC in addition to all of them being in EAC and COMESA. The same is true among West African States and in the SADC countries.

They are talking about aligning economies that they do not control. The Chinese, Asians and globalisation are already aligning us forcibly and you can see them across this continent. Our only leverage is to have the political will to act together instead of being picked one by one to the slaughter house! These African leaders have to stop treating African unity as an ala carte menu. They are either committed to it in total and take necessary steps including abandoning their narrow ‘big man in Africa’ complexes which they conveniently interpreter as ‘sovereignty issues’ or quit deceiving us with a unity agenda that in effect mean ‘NOT IN MY LIFE TIME.’

August 18, 2007

Call to the West to STOP Controlling African Development… or Another Reason Why China is Winning in Africa


Environment, development and Africa

Special CFACT feature article published in the magazine of the European People’s Party



The following article was recently published in the special “Energy, Environment and Politics” Autumn 2006 edition of “European View,” the magazine of the European People’s Party in Brussels. The full magazine can be read online at http://www.epp.eu/dbimages/pdf/_copy_4..As European nations adjust their internal and external policies regarding energy, the environment, and economic development to accommodate the needs and desires of the new European Union, there is a great opportunity to ensure that the new policies will be beneficial to the developing world, and in particular to African nations that were once European colonies.

Clearly, most Africans have not benefited much from the worldwide economic boom that has lifted many in the Pacific Rim and other formerly poor nations out of poverty and into the middle class. Indeed, Africa today has about 13% of the world’s people but accounts for only 2% of world gross domestic product – and the trend is downward, not upward. Reversing this trend will be good news for worldwide economic growth and for the environment. By playing a significant role in turning Africa around, Europe could likewise reap significant benefits.

The answer to Africa’s needs, however, is not more handouts, or even aid forgiveness, as was recommended at the June 2005 G-8 summit in Gleneagles. Rather, it is in creating a new class of entrepreneurs from among the poorest Africans and affirming the value of market principles, a reliance on sound science, and a re-commitment to the Judeo-Christian principle that “all men are created equal, endowed by their Creator with certain inalienable rights, [among which] are life, liberty, and the pursuit of happiness.”

This paper will show that, despite Europe’s presumed good intentions, Africans are increasingly uncomfortable with the vestiges of the colonialist mentality, whether it be environmental mandates or restrictions on economic development (sometimes the two are intertwined). These holdover policies and practices are hurting economic growth – and thus the development of indigenous environmental movements – all across Africa.

Unless Europeans undertake a major change in course, there is evidence that Africa may be seduced by new, possibly less scrupulous, trading partners. Fortunately, there is a path that fits in with the stated desires of many Africans — a new approach to development that focuses on people-to-people, rather than government-to-government, relationships. By taking this path, Europe can greatly expand economic and political freedom in many African nations and also regain prestige and respect among African people themselves ? while also realizing significant financial benefits for individual European investors.

Self-Determination for Europe – But Not for Africa?

As Europeans turn toward creating a common approach to major policy issues, the temptation is to be Euro-centric, especially when addressing issues such as energy, economic development, and environmental policy. Meanwhile, African nations today are beset with major obstacles to achieving the kind of political and economic freedom upon which good societies are built. Among these problems are low savings and investment rates, unstable economic and political institutions, limited quantity and quality of infrastructure and human capital, the prevalence of disease, and negative perceptions on the part of international investors.

History shows that, rather than advancing freedom, a prerequisite for truly constructive development, the demands of Western institutions when addressing these issues have typically downplayed the role of the individual and instead pressured (or allowed) governments to institute policies that further limit individual rights. As a result, the West has become to Africa like the overprotective mother who refuses to let her children grow up and then blames them for not exhibiting all the vestiges of maturity. Worse, Western policies have often left Africans enslaved once again by locally grown dictators (of the sort that first sold their brothers and sisters into slavery).

A major reason, according to economist William Easterly, for the failure of Africa to prosper has been that planners at the World Bank, the United Nations, and other Western institutions of power have never motivated people on the ground to carry out the good intentions formulated in their “marvelous plans.” Easterly’s insights belie the premise, laid down by Nobel laureate Amartya Sen, that “the expansion of freedom is … both the primary end and the principal means of development.”

Indeed, many Africans today recognize that the West’s good intentions have had negative results. They see the root cause of these misfires in the failure, both yesterday and today, of the West to listen to the voice of freedom-seeking Africans. Instead, the West has sought to impose its own priorities upon Africa.

Afonso Dhalakama, president of Centrist Democrat International Africa, notes that most of the economic development in sub-Saharan Africa during the colonial period focused on meeting the needs of colonial powers. In the push toward independence that followed World War II, the departing Europeans typically (and blindly) turned over power to communist movements or parties that continued to stifle the cries of most Africans for both political and economic freedom.

Today, there are new threats to Africans’ dreams of freedom, none more daunting than that posed by China, whose president has stated, “Chinese cooperation [with Africa] does not depend on good governance and democracy in African countries.” Dhalakama’s great fear is that Europeans, by insisting that Africans do everything Europe’s way, are opening the door wide for the Chinese to exploit Africa’s resources to fuel China’s development and further frustrate the advance of democracy in Africa.

Dhalakama urged Europeans today to assist Africans in developing political parties that will be responsive to the will and the needs of their own people and to support Africa’s growing economies by undergirding and strengthening national polities. Europe will benefit from providing such assistance, but could lose heavily by failing to strengthen indigenous and free African institutions.

Expressing a similar viewpoint, former Eritrean finance minister Gebreselassie Tesfamichael responded to the June 2005 Live 8 campaign (and the nearby G8 summit in Gleneagles) with these highly charged words:

The fundamental problem in Africa is not lack of resources, but the failure of political leadership. The modern African state is a colonial creation, extractive in its design. Its mission was not to serve the people, but to dominate and exploit them. Despite independence, and despite improvements brought by numerous democratic elections, the nature of that state remains intact.

Tesfamichael also expressed his frustration that the international aid community insisted in imposing its own guidelines for Africa to follow in pursuing development. “We wanted something different. We wanted a partnership rather than a donor-client relationship,” and so Eritrea refused to follow guidelines mandated by the International Monetary Fund. Instead of micro-management from thousands of miles away, Eritrea conducted reforms dictated by the realities on the ground and grew its economy by 7% a year during the period 1992-97.

Cameroonian journalist Jean-Claude Shanda Tonme likewise wondered how Live 8′s supporters had so clearly failed to understand that “Africa’s real problem is the lack of freedom of expression, the usurpation of power, the brutal oppression,” and that none of these problems can be solved with debt relief, food aid, or an invasion of experts.

World energy statistics bear out the perception that Africa’s resources are being exploited today nearly as much as in the colonial era. World Energy Council Deputy Secretary General Jan Murray reported in 2001 that two-thirds of all energy consumption in Africa came from high-polluting and disease-causing appropriate technologies – wood, charcoal, dung, and crop residue – that Europe now disdains. Moreover, Africa’s per capita energy consumption was very low, and most of the commercial energy the continent produces was being consumed elsewhere. In short, little of Africa’s commercial energy was being used to advance freedom on the continent.

Europeans clearly understand the value of energy resources. Andris Piebalgs said in the inaugural issue of European View, “Without reliable, affordable and safe energy, our economy would simply come to a halt. In other words, we depend on energy for our prosperity.” But European policies toward Africa have ignored (or rejected) the potential for building prosperity in Africa based on such a model. Africa has huge reserves of oil and gas and coal and the potential for hydropower and even nuclear power to provide locally usable energy, yet Europe has balked at helping Africans develop these resources.

The West has also taken a peculiarly jejune, yet pharisaic, attitude toward Africa’s manifold health problems. For example, malaria was virtually eradicated in Europe and the United States through the use of the pesticide DDT, but for decades the West has imposed a virtual ban on DDT use for any purpose. Meanwhile, malaria attacks 400 million Africans a year, killing well over a million and leaving countless others debilitated for life.

Semiannual indoor residual spraying of small amounts of DDT is a proven weapon that dramatically reduces the incidence and severity of malaria without harming the environment, but Western financial institutions, in collaboration with environmentalists, have long insisted that Africans rely solely on bed nets and expensive after-infection treatments to fight this killer.

It has taken a worldwide campaign, led by Nobel laureates Archbishop Desmond Tutu and Dr. Norman Borlaug, Greenpeace co-founder Patrick Moore, American civil rights pioneer Roy Innis, and others – sparked by African voices – to effectuate a major change in policy in the United States (in May 2006) on the use of DDT to fight malaria. The World Health Organization has also switched sides on DDT, but the battle continues. Many African nations still fear that the World Bank or individual European nations will not renege on past promises to ban agricultural imports from nations using DDT to protect human lives.

Africans are also at odds with the West over agricultural issues that range from protectionist tariffs and farm subsidies (in Africa as well as the West) that leave African farm goods uncompetitive in Western markets, to the angst over biotech foods. Neither the EU nor the U.S. budged an inch at the recent World Trade Organization talks in Geneva, though changes have been discussed for years.

Economist Thomas R. DeGregori has been a major voice supporting green biotechnology as a way to help Africa raise yields and protect plants from disease. DeGregori argues that media-led opposition to the use of green biotechnology in Africa has deep roots in misguided beliefs about science, agriculture, and food production that go back two centuries. Kenyan biotech advocate Florence Wambugu likewise contends that Africa must pursue biotechnology both to feed its growing populations and to solve its environmental problems. Africans, she insists, “must [be allowed to] participate as stakeholders” in biotechnology and other emerging technologies so that they can have some control over their development and use.

Africa desperately needs to increase its food supply: Malnutrition rates are falling worldwide but are rising dramatically in sub-Saharan Africa. Whether biotech is or is not the way to go, actions to suppress agricultural biotechnology in Africa provide yet another example of how non-Africans are making decisions that affect the very survival of Africans.

On yet another front, the highly acclaimed Equator Principles, which require Western financial institutions to meet the social and environmental policies of the World Bank, may well be discouraging much-needed economic development in Africa’s undercapitalized nations. The Chinese, of course, have not adopted these principles – nor have many rogue nations with which they are gaining influence.

As Africa Develops – Is Anybody Listening?

Thanks in part to the almost universal access to cellular telephones and the Internet, Africa is maturing politically and economically, even in countries where oppression is widespread. As Africans, even in remote locations, gain ready access to real-world information (from war news to stock quotes), the old American pop song becomes applicable: “How you gonna keep ?em down on the farm after they’ve seen Paree?” European influence in Africa is thus at a true turning point. Many Africans are tired of 400 years of colonialism and its ongoing vestiges in the post-colonial era, and others are responding to their cries to “let my people go.”

Europe stands to benefit greatly by supporting increased political and economic freedom in African nations. A major reason is that Africans for centuries have been educated in European academic institutions, learned European customs and languages, and interacted daily with European businesses, governments, and non-governmental organizations. There is tremendous untapped potential.

C. K. Prahalad argues that we must stop thinking of the poor as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value-conscious consumers. Serving the world’s poor will provide wonderful opportunities for innovations that focus on conserving resources through eliminating, reducing, or recycling wastes, because the poor cannot afford to pay for wastage. These innovations can then be transferred to markets in the developed world. Better still, as poor consumers and entrepreneurs gain experience in market mechanisms, they may well be able to transform their societies and economies dramatically in a very short time frame.

Bringing an end to, or even greatly shrinking, African poverty is a daunting proposition. Yet changing the way Europe and the West look at and deal with Africa’s poor requires some major changes in perspective and philosophy – beginning with a re-assessment of the nature of man and of the state.

The American Revolution was largely influenced by the writings of John Locke, whose political philosophy promoted individual rights and limited constitutional government as the basis of freedom and economic security. Building on Locke’s vision, Thomas Jefferson penned these immortal words found in the U.S. Declaration of Independence:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain inalienable rights, that among these are life, liberty and the pursuit of happiness ? that to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed.

Nearly a century later, Jean-Jacques Rousseau, believing Locke’s worldview would divide humanity by focusing on self-interest, individual rights, and property, set forth his own “Social Contract” in which the “General Will” of the people is embodied in the power of the state. Thus the state can both create and distribute rights to whom it pleases – and is in effect the ultimate authority. In defending the American vision, James Madison agreed that the hearts of men are wicked but believed that in a free society the evil machinations of various factions would be canceled out through the political process, leaving the good to triumph.

Recently, the ideals of Locke, Jefferson, and Madison were incorporated into the Cornwall Declaration on Environmental Stewardship, an eloquent document which encapsulates a Judeo-Christian view of environment and development, but whose principles are applicable well beyond the faith community. Cornwall states that many people mistakenly view humans as principally consumers and polluters rather than as producers and stewards and thus ignore the human potential to add to the Earth’s abundance. Thus, many oppose economic progress in the name of environmental stewardship, failing to recognize the simple truth that the more prosperous a society, the more likely it is to make environmental protection a high priority.

Cornwall further asserts that free and prosperous (and informed) citizens have the potential for very beneficial management of the Earth’s resources, and that nature does not fully “know best.” This recognition, after all, forms the very basis for holding any faith in beneficial environmental stewardship. Locke and his modern-day disciple, Peruvian economist Hernando de Soto, would hold that the private ownership of property is a key motivator for sound stewardship of land, water, and other resources. Common sense and empirical data both show that people take better care of property when they have an ownership interest.

Finally, Cornwall argues that some environmental concerns are without foundation or greatly exaggerated, while other critical environmental issues are ignored or downplayed. A major reason for this (for example, eschewing DDT’s benefits in combating malaria) is the failure – whether conscious or unconscious – to consider the environmental impacts on specific human populations in setting environmental policies.

Thus, based upon Cornwall’s prudent perspectives, perhaps the most vital thing that Westerners can do today in Africa is to humbly accept Prahalad’s observation that the poor are “resilient and creative entrepreneurs and value-conscious consumers” from whom we can learn much and gain much. Westerners need to stop dictating and start listening to the hopes and aspirations and plans of these thoughtful and energetic human beings who yearn for freedom to build out their own visions for tomorrow. This means Europe and the West must move from a Rousseauian to a Lockean mindset – one that seeks to address the needs of individuals rather than one that pursues political policies and agendas to impose on them.

The stakes are high. African nations could simply allow the Chinese and other like-minded entrepreneurial neo-colonialist states access to its markets, generating economic development but without any commitment to expanding human freedom or protecting the environment. One thing is certain: Africa will not long remain under the heavy thumb of their European “parents” who deny them the freedom to make their own decisions about things that matter.

A New Approach to African Development

Europeans might take a serious look at the new Millennium Challenge Corporation (MCC), a creation of the U.S. State Department. Under this new program, the U.S. has set guidelines for aid eligibility that require nations to meet standards for ruling justly, investing in individual people, and encouraging economic and political freedom (including freedom for women). The rules require nationwide stakeholder meetings to identify in-country barriers to development, ensure the participation of civil society, and make public the intended uses for aid dollars. These reforms should foster greater accountability for those in charge of aid-funded projects.

In Madagascar, the MCC approved a US$110 million grant to help formalize that nation’s land tenure system, modernize its land registry, expand land title services to rural citizens, improve the national banking system, and establish a body that identifies investment opportunities for rural citizens to reach markets and trains farmers and other entrepreneurs in production, management, and marketing techniques.

These are all institutional reforms that address afore-stated problems of low savings and investment rates, unstable economic and political institutions, and the limited quantity and quality of infrastructure and human capital. If implemented, these reforms, which require accountability at every step in the process, should increase the confidence of individual investors that their profits will not be stolen and thus expedite investment and business development.

The Committee For A Constructive Tomorrow, an international NGO which works in the U.S., Europe, and other nations on issues of environment and development, is also pursuing a program that utilizes Lockean principles in a constructive manner. CFACT is developing a new international development program that is modeled in large part on work done on a very small scale by faith-based and other charitable organizations on the ground in developing nations, and in part on activities reported on by Prahalad and others. The program begins with encouraging people in local communities to devise their own plans for economic growth and environmental protection and then joining with them as partners and advisors to help them achieve success.

This Social Entrepreneurship and Free-Market Environmentalism Demonstration (SEFED) program builds on the time-honored principle that, unless people who live in developing nations take ownership of their economies and their environment, the next fifty years of foreign “assistance” is likely to be no more successful than the last half century’s efforts. SEFED’s initial efforts have confirmed that de Soto was right on the money when he stated …

The cities of the Third World and the former communist countries are teeming with entrepreneurs … The inhabitants of these countries possess talent, enthusiasm, and an astonishing ability to wring a profit out of practically nothing…. Most of the poor already possess the assets they need to make a success of capitalism.

The SEFED program provides an avenue by which Westerners all too accustomed to dealing with the poor from a charitable, paternalistic viewpoint (or worse, from the old opportunistic exploitation viewpoint) can learn to interact with intelligent, motivated, yet still poor, entrepreneurs and community builders as equal partners, supporting projects conceived of and being developed principally by people whose lifestyles have not included the myriad of amenities to which most Westerners are accustomed.

Conclusion: Time for a Change

In sum, all that is really needed for Europe to reverse four centuries of unfruitful mentoring of African economic, political, and societal development is a change of heart and of attitude – and the actions that naturally should follow such a rebirth of vision. People who can plead for species preservation on grounds that even the least impressive (from our viewpoint) species may hold the key to significant benefits for humankind and the planet should be able to see the same potential in every human being.

There is so much to be gained, both personally and economically, from expanding our horizons and partnering with people who previously may have been overlooked (or looked down upon), and Europeans are in a particularly advantageous position to take full advantage of these opportunities. The time has come and is indeed near past when Europeans (and others in the West) can begin to ask themselves, what do Africans really want and how can we work together for mutual benefit to ensure that they get what they truly need?

The alternatives to this approach all forebode trouble. Inaction or continued (hard-headed) paternalism will surely allow unscrupulous developers to enter Africa, further despoil the environment and further frustrate the desire of many Africans for freedom and respect as full partners in economic development and environmental protection. But a new engagement with Africans at the ground level will enable them to make their own economic and environmental decisions – decisions that, given Africa’s long history with Europe and the recognition that all humanity wants a healthier, wealthier future and a cleaner world, could foster real change for the better.

The keys, then, are, first, the humility to listen to the ideas and visions of the poor; and, second, the willingness to visualize and assist in bringing to fruition the economic growth and increased political and social freedom that will help the poor achieve their goals. The rewards from such an approach can be great – both for Africa and for Europe, too.

Special thanks to CFACT senior policy analyst Duggan Flanakin who greatly contributed to this article.

August 16, 2007

Africa To Sign ONLY Limited EPA … For Now

Continent to Sign EU Market-Access Pact First

East African (Nairobi)
NEWS
14 August 2007
Posted to the web 14 August 2007

By Julius Barigaba
Nairobi
With barely five months to the expiry of the current trade arrangement between the European Union and Africa, Pacific and Caribbean countries, the East and Southern Africa region will sign only parts of the new trade pact, the Economic Partnership Agreement.

The current rules, contained in the EU-ACP Cotonou Agreement, which was signed in 2000, gave preferential market access to the EU to 77 ACP countries.

The agreement, which governs trade and development co-operation between the two blocs, expires in December.

However, the ESA region has agreed to prioritise negotiations on market access and development to meet the December deadline.

The grouping will sign pacts on the two issues and push negotiations on the other EPA issues beyond December.

“We are prioritising market access in order to be WTO-compatible. If we sign on market access we will then maintain our preferential access to EU markets,” said Emma Mutahunga, a trade policy analyst in Uganda’s Ministry of Tourism, Trade and Industry.

The EPA has six areas of concern that are being negotiated – market access, development, fisheries, trade in services, trade related issues and agriculture. Signing part of the EPA clusters is a strategy that the ESA group adopted at a regional negotiation forum in Port Louis, Mauritius, from August 3-5.

The strategy will enable the region to maintain its preferential access to the EU markets and, at the same time, remain compatible with World Trade Organisation rules, which require all countries to open up their markets.

This means that the next two forums of regional trade experts, as well as the ESA-EC ministerial meeting, will devote more discussion to market access, while the other pending clusters will be put on hold.

According to Mutahunga, once the region wraps up the deal for market access and development, it will then seek to negotiate the remaining clusters in 2008, since they do not impact on WTO rules.

At next ESA-EU meeting in September the region is expected to table its strategy to focus the talks on market access, but this could also be a tenable proposition for the EU.

Already, the EU has planned a proposal for duty-free quota-free market access for the ESA group, according to Peter Thompson, trade director at the EU Secretariat.

The EU wants countries in the region to respond to this proposal before the end of 2007.

“On market access for goods, the EU has an offer on the table. We have had indications from ESA on their approach, but have yet to see the details. It is something on which we must move forward quickly,” said Mr Thompson.

Uganda and 15 other countries from the ESA are negotiating the trade agreement with Europe and have two more regional meetings in which to wrap up the negotiations.

The negotiations started in 2004; they have to be concluded and the respective blocs have to sign the deal by December 31, or the ESA will lose European market access.

Mr Thompson says the African countries have had the offer since April, to be effective from the date of signing the agreement, with a transition period for sugar and rice, which ends in 2015 and 2010 respectively.

The African countries are expected to gradually open their markets for EU products with a phased removal of tariffs. Uganda currently exports products worth about $380 million to Europe annually.

But for the signing to take place, Africans say the EU must commit more development resources to the region to enable it to address production, infrastructure and marketing constraints. This is one of the issues that will dominate the remaining rounds of negotiations.

During the February ESA-EU ministerial meeting in Brussels, the conclusions on financing adjustment costs such as loss of revenue pointed to the need for the EU to provide 2 billion euros ($2.8 billion) by 2010.

These funds are to be available before the EPAs are signed, the Brussels meeting noted.

August 12, 2007

A Cow in Japan Receives US$4 Per Day in Subsidies While the Majority of Africans Live on Less Than US$1 Per Day.

How the West Impoverishes Africa

Mmegi/The Reporter (Gaborone)
NEWS
9 August 2007
Posted to the web 9 August 2007

By Thato Chwaane
Mbabane
Participants at a regional seminar on poverty held in Swaziland are absorbing the cruel facts and figures that show the devastated face of the African continent in its state of underdevelopment. Staff writer, THATO CHWAANE, is following the deliberations and below she captures the highlights of the discussion on ‘trade, development and poverty’.

Everyday 840 million people go hungry and more than two billion suffer from dietary deficiencies, a Southern African Regional Poverty Network (SARPN) official has said.

Presenting a paper on “Trade, Development and Poverty: The Case of Africa,” in Mbabane on Monday, Jack Zulu SARPN programme manager for economic dimensions, said that children and women are the most vulnerable groups.

He said that 12 million children die every year from preventable diseases, when immunisation could save three million of them.

“Each dollar spent on immunisation saves between US$4 and US$5 in preventable direct medical costs later on,” he said.

He added that everyday 8,200 people all over the world die because of HIV/AIDS and 6,000 of these deaths occur in Africa.

He said with pharmaceutical cartels declaring profits of US$517 billion, in 2003 if there was a change in rules that protect patented medicines, millions of people would have a chance to live longer.

Meanwhile, he said expenditure on the military worldwide was more than US$1.5 billion per day in 2001.

Whilst the US military budget for 2003 was increased by US$167 billion for the war in Iraq “reconstruction of Iraq will cost between US$30 billion and US$100 billion,” he said.

He said that if US$1 billion per day in agricultural subsidies in developed countries was re-allocated, world poverty would go down by 75 percent.

Zulu said that a cow in Japan receives US$4 per day in subsidies while the majority of Africans live on less than US$1 per day.

He said rich countries claim that free trade, without local subsidies or protection is the key to escaping poverty, but that when poor countries open up their markets to free trade, foreign firms enjoy huge advantages.

This, he said, means local companies cannot compete favourably.

He said South East Asian countries have grown because of managing their economic development and not by using free trade policies dictated by the IMF, World Bank and World Trade Organisation (WTO).

Zulu said developing countries have a natural comparative advantage in producing agricultural goods but that the current trade system seems designed to undermine that advantage.

“There is a system of trade rules and regulations that allow rich countries and their companies to make lots of profits but prevent poor countries from developing their own economies,” Zulu said.

He said trade done under right conditions, supported by the right quantities and qualities of aid can be a powerful tool for poverty eradication.

August 3, 2007

I Europe Pushing African Countries Into Signing Trade Agreements

Europe Not Pushing Countries Into Signing Trade Agreements

Rwanda News Agency/Agence Rwandaise d’Information (Kigali)
NEWS
1 August 2007
Posted to the web 1 August 2007
Nairobi
African countries are not being forced by the European Union to finalise a trade deal before the end of the 2007 deadline, Kenya’s top trade official said Wednesday.

“Europe has not pushed the December 31 2007 deadline on us. It is part of the Cotonou agreement that we all agreed to and signed”, David Nalo the Trade Ministry’s Permanent Secretary, said.

The Cotonou Agreement was signed in June 2000 between the European Union and the group of African, Caribbean and Pacific states (ACP). It was signed in Cotonou (Benin) by 79 ACP countries and the then fifteen EU states.

The deal has allowed ACP countries non-reciprocal market access to EU member states at preferential tariffs since 2000, meaning ACP did not have to give EU products market access in return.

The European Union obtained a waiver from the World Trade Organisation until December 2007 for its deals with the ACP block, among them Rwanda.

This will change from January 1, 2008 because the EU now wants access for the goods and services offered by its member states to ACP countries.

Rwanda and fifteen other countries in the Eastern and Southern Africa (ESA) are negotiating a reciprocal free trade agreement with the European Union (EU).

Mr. Nalo denied what he called the misinformation that Africa had been coerced to agree to the deadline for the new trade plan, known as the Economic Partnership Agreements (EPAs).

“That is contained in the Cotonou agreement to which we contributed and put our signatures”, he told African journalists at a Reuters Foundation workshop in Nairobi.

EPAs are basically reciprocal free trade agreements that upon signing will open developing country markets to the products and services from the European Union block – which now has 27 members.

Mr. Nalo said the trade benefits to the East African Community states (EAC) will offset the revenue loss after the new trade deal is concluded. Rwanda and Burundi joined the EAC in June bringing the family to five states including Uganda Kenya and Tanzania.

Critics of the plan have continuously argued that African countries are ill-prepared and would face detrimental effects from the deals such as loss of much needed revenue.

Africa: Multilateral Still Better Than Bilateral Talks

Multilateral Still Better Than Bilateral Talks

Inter Press Service (Johannesburg)
NEWS
31 July 2007
Posted to the web 31 July 2007

By Tonderai Kwidini
Harare
Kumbirai Katsande, the managing director of a top Zimbabwean horticultural company, is in a buoyant mood. He hopes that his firm, Ariston Holdings, will make a big break in the lucrative European horticultural market where it sells its products.

“Our dream is to increase the volumes of flowers and fruit that we export to Europe. We have set ourselves a target of sending a full cargo load of our products to Europe within the first week of summer in Zimbabwe,” said Katsande with a broad smile.

But while he is optimistic, Katsande is very much aware of the pitfalls of the skewed game of international trade. These may well prevent his dream for his company from becoming true.

“Although we are producing probably one of the best flower breeds in the world we still have no choice when it comes to determining the prices of our product on the international market. This is done by merchants in Europe and we do not know what will happen there,” Katsande told IPS.

It is against this background that the Zimbabwean government, as part of the African, Caribbean and Pacific (ACP) group of countries, has been engaging the European Union (EU) with a view to doing away with unfair trade imbalances through the EU’s proposed economic partnership agreements (EPAs).

The Zimbabwean government says it supports the ongoing EPA negotiations between the ACP and EU countries.

Minister of Industry and International Trade Obert Mpofu told IPS in an interview that the Zimbabwean government supports the EPA talks but also supports the efforts of Brazil and India to level the playing field in international trade in the World Trade Organisation.

“We have bilateral trade agreements with European countries but when it comes to international trade issues we will support the multilateral route, which is why we hold memberships to the various international bodies. We do not believe that the bilateral route will not take us very far in international trade,” said Mpofu.

Added Deputy Minister of Information and Publicity Bright Matonga, “at least we are to negotiate as part of a big bloc, the Southern African Development Community (SADC), and the Europeans will not be able to choose a preferred customer. When we try to negotiate as individual countries, we give them the ammunition to divide and discriminate against us”.

“There are serious structural issues which are overcome by negotiating as a bloc. For example, Zimbabwe’s impasse with the United Kingdom was made an EU issue. For them, what is bad for one country is bad for all of them and that is exactly what we are saying with regards to these trade issues.

“There should not be any discrimination and if the EU comes with any prescribed measures on who to trade with and who not to trade with, then African countries as a bloc should take a common stand.” Matonga is adamant that Europe should not be given the leeway to choose who it wants to do business with.

“We support the collective approach to trade issues. As long as trade is approached from an African perspective, Zimbabwe will support the talks. We understand that there are standards that have to be adhered to.

“We welcome these as long as they do not discriminate against certain countries,” he said in apparent reference to rich countries’ punitive measures against the Zimbabwean government, taken in an effort to influence its policies.

Like other developing countries, the Zimbabwean government is also worried about the issue of agricultural subsidies in large markets such as the US and EU.

Zimbabwe is one of the African countries which have benefited from preferential trade agreements between the ACP and the EU over the years. The Lome agreements allowed unrestricted access to most of Zimbabwe’s exports to the EU, including products such as beef and flowers.

The EU and the ACP’s Cotonou trade agreement of 2000 was ratified by Zimbabwe’s parliament on November 15 2002. One of the objectives of the agreement is the eradication of poverty to enable the creation of stable economies.

The ACP countries and the EU also decided to act together and negotiate the EPAs to better integrate ACP countries into the global economy.

Zimbabwe introduced export processing zones (EPZs) as a way of boosting the country’s export earnings. The country’s export earnings have been poor for many years due to the worsening political crisis. Under the EPZ programme, exporting companies are given various incentives such as a five-year tax holiday and a low import duty of 15 percent at first, to be replaced by duty free importation of capital goods and machinery after a set period.

Some of the farms in the EPZ were acquired under the controversial land reform programme in 2000. Some of the notable companies affected by the land reform programme were Kondozi farm and Charleswood Estate in eastern Zimbabwe. Both produced world-class fruit and flowers for export.

Jabusile Shumba, a Harare-based researcher who has attended World Social Forum (WSF) meetings, warned that Africa should not wait for “manna from heaven” in the current EPA negotiations.

“We need an African programme with which to achieve what the Asian tigers have achieved with minimal resources. We should make ourselves globally competitive by adding value to our products.

“Take a look at developing countries that produce coffee beans which are sold for two US cents but when it returns, it is coffee which will be sold for two dollars. The ACP-EU negotiations are very necessary but they should be done within a legal context to ensure that no country, poor or rich, break the agreed rules.”

July 24, 2007

Hope Mixed with Concern Greets China’s Growing Prominence in Africa

Hope, Concern Greet China’s Growing Prominence

Inter Press Service (Johannesburg)
NEWS
23 July 2007
Posted to the web 23 July 2007

By Michael Deibert
Paris
While China’s growing trade and investment flows to Africa have sparked a sometimes contentious debate with the United States and Europe over who has the continent’s best interests at heart, a closer look at the dynamic developing reveals a political landscape where the rhetoric is rarely in line with the reality, observers say.

When a recent World Bank report revealed that trade between Africa, the European Union (EU) and the U.S. is nearly equalled by that between Africa and Asia, a closer look at the numbers brought the picture of China’s involvement in Africa into even starker relief.

African exports to China grew 48 percent annually between 1999 and 2004, with 10 percent of all sub-Saharan exports now destined for the Asian behemoth. Likewise, as a whole, over the last five years Asian exports to Africa increased at an annual rate of 18 percent, higher than that of any other region, including the EU.

China’s deepening involvement in Africa has been driven by its domestic demand for the natural resources and raw materials that are needed to support its population of 1.3 billion and a booming economy — the country has the second-largest economy after the U.S. and the world’s largest current account surplus nearly 180 billion dollars.

It is a development that is profoundly — and, many believe, permanently — changing the nature of Africa’s relationship with the former colonial powers of the EU, and re-writing the nature of African realpolitik. But at present the EU remains Africa’s largest trading partner with trade totalling more than 200 billion euros in 2006.

“I think it’s going to dramatically change the diplomatic and economic landscape,” says Mamadou Diouf, a noted West African scholar who directs the Institute for African Studies at Columbia University. “In the previous world defined by the Cold War, the pressure was much more ideological, Africa had to align itself ideologically rather than come up with its own agenda. Today they are negotiating between different choices and possibilities.”

The seeming lack of conditionality to China’s aid, such as the absence of any stipulation based on anti-corruption measures, as well as the speed with which it is dispersed have both proved attractive to African governments with varying degrees of accountability and respect for human rights.

“China’s zero-condition policy is appealing to a country which doesn’t have very transparent reporting and budgetary mechanisms,” says Katherine Constabile, an Africa analyst with the New York-based Eurasia Group, a global political risk consultancy.

Among the more controversial aspects of China’s involvement in Africa is that of the PetroChina company, a subsidiary of the state-controlled China National Petroleum Corporation, which owns a major stake in Sudan’s national oil consortia, and maintains extensive operations there.

To help meet its demand for fuel, China purchased more than half of Sudan’s oil exports in 2006. Critics charge that profits from these sales have enabled the Khartoum government to buy weapons with which to continue its military operations — both directly and by proxy — in the nation’s Darfur region.

The Sudanese military and government-aligned Janjaweed militia forces stand accused here of carrying out war crimes against the area’s civilian population. The chaos engulfing Darfur has claimed an estimated 200,000 lives, mainly civilians, since 2003, according to a study published in the journal Science.

Some in Africa, though, despite being skeptical of China’s motives, see a certain amount of selective memory in the West’s position.

“Both the U.S. and Western Europe, particularly over the last two decades, have linked their involvement in Africa — whether trade or other — with demands for reform or better governance and a more democratic substance,” says Ayesha Kajee, programme director with the International Human Rights Exchange (IHRE) at the University of the Witwatersrand in Johannesburg, South Africa.

“But elections have come to represent the be all and end all, with very few (African) governments paying more than lip service to them,” Kajee says. “When it comes to the institutions of democracy, and instituting democratic practice in society, the U.S. and Europe haven’t been half as vocal.”

Western powers, even in recent years, have appeared to be willing to turn a forgiving eye to questionable regimes when the moment suited them.

In 2002, U.S. President George W. Bush invited Ethiopian President Meles Zenawi to the White House, and then conducted a high-profile meeting with Ugandan President Yoweri Museveni outside of Kampala in 2003. Both men had also enjoyed warm relations with the administration of former president Bill Clinton.

Zenawi’s government has been accused of massacring nearly 200 protestors around the Ethiopian capital Addis Ababa in violent upheaval following disputed May 2005 elections, and routinely jails opposition politicians. He has been named ‘Predator of Press Freedom’ by the journalist’s advocacy group Reporters Sans Frontières.

During elections in 2005, Museveni arrested Uganda’s main opposition leader, Kizza Besigye, and posted heavily-armed government partisans around the court where his bail hearing was being held.

At the same time, the EU seems willing to engage in a bit of its own non-conditionality to adapt its Africa involvement to this new reality with the announcement that it will invite Zimbabwe’s President Robert Mugabe to an EU-Africa summit scheduled in Lisbon this coming December, despite Mugabe being the subject of an EU travel ban.

Mugabe stands accused of gross human rights abuses and economic mismanagement in his 27-year rule of his country, once one of Africa’s richest. Zimbabwe’s inflation is now believed by unofficial estimates to measure around 15,000 percent. A recent report by the New York-based group Human Rights Watch concluded that “police routinely arrest and detain political opponents and government critics, and then abuse them in custody.”

The African Union (AU), a body of 53 African states formed in 2001 with the ostensible aim of integrating the region’s currency and its defence forces, as well as promoting human rights, had threatened to boycott the summit if Mugabe was excluded.

Stepping into this landscape of grey area and compromise, Chinese President Hu Jintao has visited 17 countries on the continent during the last year, making him the most frequent visitor among heads of state.

“The EU knows how much influence China has in Africa, they know that it’s profound and that it has implications on EU-Africa relations,” says Veronika Tywuschik, an academic researcher based in the Netherlands currently exploring Chinese-African relations.

In a June report ‘From Cairo to Lisbon — The EU-Africa Strategic Partnership’, the European Commission, which serves as the executive body of the European Union, called for a reassessment of EU-Africa relations based on “a genuine partnership of equals.”

The report went on to say that the new understanding between the two regions should “promote peace and security, governance and human rights, trade and regional and continental integration in Africa” as well as to “facilitate and promote a broad-based and wide-ranging people-centred partnership for all people in Africa and Europe.”

In an almost musical corollary, though, in late June, China’s state-controlled China Development Bank commenced the first phase, measuring a billion dollars, of its 5-billion-dollar China-Africa Development Fund.

Belying China’s supposed carte blanche to its African counterparts, this aid in fact comes with many strings attached, though none, perhaps attractively for some governments, related to human rights or anti-corruption.

The conditions include that the aid’s availability will be restricted solely to investment in Chinese enterprises and projects in Africa, and that 70 percent of the contracts be set aside for Chinese companies, with the rest going to African businesses, many already working with Chinese enterprises.

Despite all the sound and fury, some Africa observers say, what we may be witnessing is the same old networking simply presented in a new wrapping.

“By and large, when you look at foreign interest in Africa, it is still directly linked to geo-strategic concerns,” says Human Rights Exchange’s Kajee.

Fish Exporters Set Conditions for Economic Partnership Agreements

Fish Exporters Set Conditions for Economic Partnership Agreements

The Monitor (Kampala)
NEWS
23 July 2007
Posted to the web 23 July 2007

By Joseph Olanyo
Kampala
With barely five months to go before the Economic Partnership Agreements (EPAs) come into force, it is still unclear whether agreements in the negotiations will be reached.

EPAs are trade deals being negotiated between the European Union (EU) and African Caribbean and Pacific (ACP) countries.

The EPA allows products from any member country access to any market within the partnership at competitive tax rates. Along with 15 other countries in the Eastern and Southern Africa (ESA) region, Uganda is negotiating the EPAs with the EU.

At a one-day consultative workshop in Kampala on July 20 to review progress of EPAs for the fisheries sector, Uganda Fish Processors and Exporters Association (UFPEA) said while the probability of signing EPA was high, there were some areas that needed to be considered. UFPEA and Private Sector Foundation Uganda (PSFU) contended that the signing should be subject to certain conditions.

UFPEA want among other things, increasing funding on Lake Victoria management project, financial support for more laboratories, and support fish food for aquaculture.

“We are saying that we want to be part of EPA. We want it to be signed, continue with market access and also develop our sector in terms of increased production,” said UFPEA Chief Executive Officer Ovia Katiti Matovu.

The fisheries sector, one of the clusters being negotiated under the EPAs, are a leading Ugandan export, a major employer to many lake communities and the major market is Europe. The others sectors are agriculture, trade related issues such as services and market access.

“The opportunity cost of not signing EPA is high,” said PSFU trade policy officer Mr John Ssempebwa. In 2002, the EU and ACP countries officially opened negotiations on EPAs.

The negotiations, which are to take place over five years, are aimed at redefining the trade regime between the two groups of countries. Uganda is a member state. The negotiations have now entered a critical phase before the expiry of the December 31 deadline.

The outcome of the negotiations will see a series of new Free Trade Agreements (FTA) replacing the Lomé system of preferential access to the European market.

Fish processors and exporters contend that there are possible dangers that full liberalisation of fisheries might deplete Lake Victoria when better vessels from Europe are allowed to fish on the lakes.

In addition, the failure for Uganda to sign the EPAs means that Ugandan fish exports will now be subjected to some kind of tariff which is charged to fish from non-Least Developed Countries (LDCs).

With the high costs of business like high costs of power in processing fish, limited freezing facilities, fish exporters will have a hard time to compete with fish from more competitive non-LDC countries like Kenya.

A lot remains at stake for Uganda’s fish exports because the fisheries negotiations are dominated by sea fisheries while inland fisheries are given very little attention.

EU & China Bid for Markets in Africa

EU, China Bid for Markets

Zimbabwe Standard (Harare)
NEWS
22 July 2007
Posted to the web 23 July 2007

By Ndamu Sandu

AHEAD of the second EU-Africa summit in December, the European Commission has adopted a proposal presenting key flagship initiatives embodying a new approach to relations to be deliberated at the indaba.

The policy initiatives will be put forward by the future Joint EU-Africa Strategy to be deliberated by both the EU and Africa at the summit in Lisbon, Portugal.

In a news release the European Commission said: “The Joint Strategy, to be adopted during the second EU-Africa Summit in Lisbon in December, will outline a long term shared vision of the future of EU-Africa relations in a globalised world.”

The European Commission policy initiatives embody partnership in energy; climate change; migration, mobility and employment; democratic governance; and political and institutional architecture.

The Joint Strategy aims to strengthen the EU-Africa political dialogue so as to bring the EU-Africa partnership beyond development co-operation by opening up the EU-Africa dialogue to issues of joint political concern and interest. It envisages to bring partnership beyond Africa by moving away from a focus on Africa matters only and openly address European and issues of global concern and to act accordingly in the relevant fora to make globalisation work for all.

The joint strategy sees partnership beyond fragmentation in supporting Africa’s aspirations to find regional and continental responses to some of the most important challenges. It also looks at partnership beyond institutions in ensuring a better participation of African and European citizens, as part of an overall strengthening of civil society in the two continents.

EU and African countries are locked in negotiations for the reciprocal Economic Partnership Agreements (EPAs). African, Carribbean and Pacific (ACP) countries used to enjoy unilateral trade preferences with the EU for almost three decades under the Lomé Conventions. The Fourth Lomé Convention was replaced by the Cotonou Agreement in 2000, which extends these unilateral trade preferences up to the end of 2007.

Negotiated World Trade Organisation (WTO) compatible reciprocal trade agreements, EPAs, will replace the current non-reciprocal preferential trade regime. These EPAs have to be concluded by no later than the beginning of 2008.

EU and China are tussling over the control of African market following heavy investments by Beijing into the continent.

Zimbabwe Standard (Harare)
NEWS
22 July 2007
Posted to the web 23 July 2007

By Ndamu Sandu

AHEAD of the second EU-Africa summit in December, the European Commission has adopted a proposal presenting key flagship initiatives embodying a new approach to relations to be deliberated at the indaba.

The policy initiatives will be put forward by the future Joint EU-Africa Strategy to be deliberated by both the EU and Africa at the summit in Lisbon, Portugal.

In a news release the European Commission said: “The Joint Strategy, to be adopted during the second EU-Africa Summit in Lisbon in December, will outline a long term shared vision of the future of EU-Africa relations in a globalised world.”

The European Commission policy initiatives embody partnership in energy; climate change; migration, mobility and employment; democratic governance; and political and institutional architecture.

The Joint Strategy aims to strengthen the EU-Africa political dialogue so as to bring the EU-Africa partnership beyond development co-operation by opening up the EU-Africa dialogue to issues of joint political concern and interest. It envisages to bring partnership beyond Africa by moving away from a focus on Africa matters only and openly address European and issues of global concern and to act accordingly in the relevant fora to make globalisation work for all.

The joint strategy sees partnership beyond fragmentation in supporting Africa’s aspirations to find regional and continental responses to some of the most important challenges. It also looks at partnership beyond institutions in ensuring a better participation of African and European citizens, as part of an overall strengthening of civil society in the two continents.

EU and African countries are locked in negotiations for the reciprocal Economic Partnership Agreements (EPAs). African, Carribbean and Pacific (ACP) countries used to enjoy unilateral trade preferences with the EU for almost three decades under the Lomé Conventions. The Fourth Lomé Convention was replaced by the Cotonou Agreement in 2000, which extends these unilateral trade preferences up to the end of 2007.

Negotiated World Trade Organisation (WTO) compatible reciprocal trade agreements, EPAs, will replace the current non-reciprocal preferential trade regime. These EPAs have to be concluded by no later than the beginning of 2008.

EU and China are tussling over the control of African market following heavy investments by Beijing into the continent.

Many Africans Fear ‘Ruin’ from EU Amid the EPA Trade Talks

Africans Fear ‘Ruin’ in Europe Trade Talks

Africa Renewal (United Nations)
NEWS
23 July 2007
Posted to the web 23 July 2007

By Gumisai Mutume

The warnings are grim. Cape Verde may lose 80 per cent of its import revenues. Three-quarters of Ghana’s industry may collapse. And African countries could end up even more dependent on trade with Europe than with each other. Such worries about the possible impact of ongoing “free trade” negotiations between Europe and its former colonies in Africa, the Caribbean and Pacific (ACP) are beginning to galvanize public debate in the region.

African governments, policy analysts, regional economic groups and civil society organizations are increasingly speaking with one voice: the Economic Partnership Agreements (EPAs) now being hammered out between Europe and the ACP countries must be significantly modified to safeguard those countries’ prospects for development.

“If the EPAs are signed as they are, it will be suicide and death for farmers,” Jules Zongo, national president of Burkina Faso’s regional chambers of agriculture, declared at a protest march and rally of 2,000 farmers in that country’s capital, Ouagadougou, in December. Several months earlier, civil society organizations rallied in Senegal, as part of a global Stop EPA campaign, to demand that their government not sign the agreements unless significant changes are made.

African leaders have taken note of such calls. When heads of state from throughout West Africa converged on Ouagadougou for a summit meeting in January 2007, Burkina’s President Blaise Compaoré affirmed that the “legitimate concerns” of farmers and other producers must be considered in any trade talks with the European Union (EU).

Among other venues, opposition to the EPAs also featured at the World Social Forum in Nairobi, Kenya, in January, at which tens of thousands of civil society representatives chanted and carried signs declaring: “Fight poverty… Say no to EPAs.” In April, the Africa Youth Coalition Against Hunger mobilized more than 1,000 activists from 20 countries in the Gambia to launch a “big noise campaign” to stimulate public debate on the proposed agreements.

Beyond the concrete impact that the new agreements may ultimately have on people’s lives, the negotiations are attracting wider attention for another reason: they began at a time when talks to further liberalize global trade, under the so-called Doha round of the World Trade Organization (WTO), seemed stalled.

One factor in the indefinite suspension of the Doha round last year was the reluctance of richer countries to liberalize their agricultural sectors, while at the same time they insisted that developing nations open their own economies even further to products from the North. Some analysts regard the EPA negotiations as an attempt by the more powerful EU to extend to its weaker ACP trading partners, through a different forum, agreements that it could not obtain at the WTO. The 27 countries of the EU have a combined gross domestic product of US$14 bn, while 39 of the 79 ACP nations are among the world’s least developed countries (LDCs).

New scenario

Although the Doha round talks have bogged down, earlier changes at the WTO have already seriously affected the nature of the EU’s relations with the ACP countries. From 1975 to 1994, the EU and ACP shared special development cooperation arrangements through a series of five-year agreements, originally known as the Lomé Conventions. Through those agreements, the EU granted trade preferences to ACP exports, without requiring similar treatment for EU products in ACP markets.

The so-called Uruguay Round of trade negotiations, which concluded in 1994, adopted new rules requiring parties to regional trade agreements to eliminate duties and other restrictive regulations on “substantially all the trade” among them. But for some regions application of the rules was postponed, as the WTO, which emerged from the Uruguay talks in 1995, agreed to a special exception allowing the EU to maintain “non-reciprocal” preferences for ACP exporters until December 2007.

With the WTO deadline in mind, in 2000 the two groups signed a new cooperation accord known as the Cotonou Agreement, covering aid, trade and political cooperation. Its aim was to “facilitate the economic and political integration of the ACP countries into a liberalized world market.” Its framers also envisaged the conclusion of negotiations on EPAs or other alternative trade arrangements by the start of 2008, to comply with WTO rules. Initial talks on the EPAs began in 2002.

Some developing countries now fear that the EU’s approach to such EPAs will oblige them to remove trade protections so quickly and to such an extent that the development of their own industries will be harmed. “At no point in time was an EPA as a free trade agreement the first choice for the ACP,” says Mauritius’ ambassador to the EU, Sutiawan Gunessee. “It was not. But we had no alternative.”

According to Zimbabwean Trade Minister Obert Mpofu, any new trade agreements should reinforce, not undermine, “the development of our economies, employment generation, wealth creation for our people and ultimately poverty reduction.”

Ending dependency?

In contrast, EU Trade Commissioner Peter Mandelson views the EPAs as beneficial. He argues that they will shift the relationship between the EU and Africa from one of dependency on tariff preferences to one that promotes business competitiveness. After 30 years of preferential market access, African countries still export a limited range of basic commodities, he points out. “Most of these are sold at lower prices than they were 20 years ago. This is not sustainable. It certainly isn’t sustainable development.”

Countered Nigerian Commerce Minister Aliyu Modibo Umar: “If 30 years of non-reciprocal free market access into the EU did not improve the economic situation of the ACP, how can a reciprocal trading arrangement achieve anything better?” Instead, he argues, simply liberalizing trade will “further widen the gap between the two [blocs] and probably destroy the little development that some ACP countries have managed to achieve over the past years.”

Unloading grain at the port of Dakar, Senegal: Africa worries that Europe is trying to bring in new trade issues that have not been agreed at the World Trade Organization.

Hard choices

Under the type of EPAs currently proposed by the EU, ACP countries would eventually have to liberalize 80-90 per cent of their trade with the regional bloc in order to gain duty-free access to European markets. That would allow ACP countries to use tariffs to protect only a small portion of their products from competition with European goods.

To stay within that narrow band, governments would have to make some hard choices, notes Oxfam in a 2006 report, Unequal Partners. They could choose, for example, to maintain tariffs on valuable revenue-raising imports such as cars and electronics, protect staple foods such as maize, exempt a few existing industries from competition or retain the ability to support future industrial development.

Fiscal losses

In the short term, lifting tariffs on European goods would deprive many governments of an important source of fiscal revenue. “Many countries would lose the valuable income they earn from tariff duties,” notes Mr. Godfrey Kanyenze of the Labour and Economic Development Institute of Zimbabwe. Until countries are able to diversify their revenue bases – often a long process – they could be confronted with national budget deficits, possibly leading to lower spending on education, health care, poverty reduction and social security.

A 2002 study by the Common Market for East and Southern Africa, a regional trade bloc, found that if all EU imports entered that region duty-free, governments would lose about 25 per cent of their trade taxes and about 6 per cent of total tax revenue. Another study, by Germany’s Hamburg Institute of International Economics, estimated that declines in import duties in countries of the Economic Community of West African States would range from the equivalent of $2.2 mn in Guinea-Bissau to $487.8 mn in Nigeria. The decline would be sharpest in Cape Verde, where 80 per cent of import revenues are likely to be lost. If no adjustments on spending were made, Cape Verde and the Gambia would incur budget deficits of 4.1 and 3.5 per cent respectively.

Such “doomsday” predictions need to be treated with caution, responds EU Trade Commissioner Mandelson. “If we look closely, most studies are highly theoretical,” he argues. “They assume immediate and complete liberalization, and ignore the economic benefits of reform.” According to Mr. Mandelson, the EU and ACP can negotiate the timing and phasing of tariff reductions to guard against any sharp drops in government income.

The commissioner adds that while some “transitional protection” may be necessary, the aim should be to reduce protection to encourage local industries to become more competitive. Over time, ACP countries will need to adapt their economies to compete with the rest of the world.

‘Back door’ issues

In principle, the central objective of the Cotonou Agreement is poverty reduction. Both parties agree that whatever arrangements are negotiated, they should foster development in the ACP countries. But they differ on what policies would best serve that purpose, echoing debates that previously unfolded within the WTO.

The EU, for example, is proposing that ACP countries adopt stringent rules to protect foreign investment, promote domestic competition and increase transparency in government procurement procedures. Similar proposals – known as the “Singapore issues” after the WTO ministerial meeting at which they were first raised – were blocked by developing countries, which feared the rules would hinder their ability to use trade policy to promote development (see Africa Renewal, January 2004).

But rich countries, following their failure to introduce such issues into WTO agreements, are now trying to insert them into multilateral and bilateral agreements as conditions for aid or loans, notes Mr. Irungu Houghton of Kenya, a pan-Africa policy analyst for Oxfam. EPAs are one part of this broader effort to bring the Singapore issues in through “the back door,” he argues.

In several countries, Mr. Houghton told Africa Renewal, “there is intense pressure to open up procurement processes for public contracts and supplies to non-indigenous suppliers, who because of their international reach are able to produce those goods at a much lower cost than local contractors.” Such a liberalization of procurement would take away one of the few tools governments have traditionally used to promote local industry – that is, favouring domestic companies ahead of foreign ones.

Mr. Houghton notes that similar changes in government procurement policies are also appearing in Country Assistance Strategies – documents that spell out loan conditions from the continent’s main lender, the World Bank.

The implications of adopting all the Singapore issues in Africa have not been fully studied. But policy analysts agree that simply implementing new laws to enact the reforms will by itself be costly. Oxfam estimates that rewriting domestic laws and changing business procedures in each of the 16 areas of reform agreed under the Uruguay Round would cost an average country $2.5 mn.

The European Commission (the secretariat of the EU) insists, however, that there will be “no EPA without investment rules and full reciprocity.” The commission argues that “the EPAs are, at root, about putting progressive trade policy into practice,” by reducing bad business practices hindering investment in Africa.

‘A field of ruins’

But opposition is mounting to the EPAs, as currently envisaged by the EU. In 2004 civil society organizations from across the world rallied in London to launch a Stop EPAs campaign. The campaigners charge that in their current form EPAs are essentially narrow “free trade” agreements intended to further liberalize the markets of ACP countries. They cite examples of earlier trade liberalization measures. In 1986 Côte d’Ivoire cut tariffs by 40 per cent, resulting in massive layoffs in the chemical, textile, footwear and automobile assembly industries. Senegal lost one-third of manufacturing jobs between 1985 and 1990 after reducing tariffs from 165 per cent to 90 per cent. The campaigners are calling for EU-ACP trade relations that support the weaker partners’ pursuit of economic development.

The organizations endorsing the campaign include the Economic Justice Network in South Africa, Third World Network-Africa in Ghana, Civil Society Trade Network of Zambia, Action Aid and Oxfam International. In a number of African countries, including Burkina Faso, Ghana, Nigeria, Kenya and Senegal, thousands of farmers, workers and civil society activists have staged public protests against the perceived consequences of EPAs.

In April, West African business representatives also voiced alarm. Meeting in Dakar under the auspices of the regional chamber of commerce of the eight-country West African Economic and Monetary Union, they affirmed their readiness to become more competitive in global markets, but not to enter into competition “with unequal arms.” Commenting specifically on the EPAs, Mr. Iddi Ango, president of the regional chamber, said that “if we open up our countries, given the current state of our enterprises, it will not be an opportunity, but a disaster, a field of ruins.”

Mr. Ibrahim Akalbila, national coordinator of the Ghana Trade and Livelihood Coalition, comprising civil society and farmers’ groups in that country, cites the high domestic subsidies that many European governments continue to provide their producers, allowing European products to undersell producers in poor developing countries. “Whether it is tomatoes and rice, textiles or iron rods,” he said in April, “cheap imports, illegally dumped into our markets, are destroying whole areas of economic activity, and with it, the lives of millions.”

‘EPA light’

Some European analysts acknowledge the validity of the ACP criticisms. But they also note that the EU faces a dilemma: how to reconcile the special status of the ACP group with its obligations to the WTO.

One possible solution, they suggest, is for the EU to accept an agreement that is only as reciprocal as necessary to meet WTO requirements, while leaving the ACP countries some room to safeguard their domestic markets and industries. The European Centre for Development Policy Management, an independent foundation funded by a number of European governments, proposes the adoption of an “EPA light.”

Such an arrangement would initially require ACP countries to open up their markets only enough to comply with WTO rules. They would liberalize just 50-60 per cent of their EU trade over a long transitional period of 20 years or more, while the EU would continue to grant full market access to all ACP countries. During the transition, the EU also would support the building of viable industries in ACP countries.

Along similar lines, the UN Economic Commission for Africa (ECA) argues that the primary focus of EPAs over an initial 12-year period should be to strengthen intra-African trade, to help local industries first become more competitive with their African counterparts. Only after this period, notes the Addis Ababa-based ECA, should EPAs then consider opening African economies to EU competition. And even then, tariff reductions should be phased in gradually, to allow countries time to adjust to the rigours of global markets.

Alternative options

If ACP countries ultimately decide not to sign EPAs, there are a number of other options they could pursue. At the Cotonou meeting in 2000, the EU agreed that if EPAs were not accepted, it would propose “alternative possibilities, in order to provide these countries with a new framework for trade which is equivalent to their existing situation and in conformity with WTO rules.” A country, however, would first have to reject an EPA before work could begin on an alternative.

One such option would be to develop new trade arrangements agreeable to both sides. For example, notes Action Aid, the EU could continue offering ACP countries preferential access to European markets while allowing them to protect their vital industries or cut tariffs in ways that do not jeopardize their economic development goals. But such provisions would require changes to current WTO rules on regional trade agreements. With the Cotonou deadline looming and the Doha round talks still suspended, that option seems unlikely.

Therefore, both parties may have to rely on existing trade regimes. One of these is the Generalized System of Preferences (GSP): nonreciprocal market-access schemes open to all developing countries that meet certain standards in human and labour rights, environmental protection and good governance.

Nations classified as least developed countries – 39 out of the 77 countries currently taking part in the EPA negotiations – could benefit from one of the variants within the GSP framework, the “Everything But Arms” initiative. It grants LDCs nonreciprocal duty-free and quota-free access to the EU for all goods except arms and munitions.

Non-LDCs could also decide to seek GSP treatment, but they would not be eligible for full duty-free access to the EU market. Moreover, GSP arrangements are narrower in scope than EPAs or the current ACP-EU agreement, since they cover only market access. Unlike the Lomé or Cotonou agreements, they do not include any development assistance, in the form of either financial aid or technical cooperation. GSP rules are also considered more restrictive and onerous than those of the Lomé/Cotonou agreements: hence the reluctance of ACP countries to rely solely on them.

The European Commission acknowledges that the GSP alternative would be a “second best” solution, from the development perspective of the ACP countries. A GSP arrangement is not negotiated, like a contract. The EU would design it and offer it on its own terms, and could amend or suspend it at any time. The products covered would not include all those of interest to ACP countries. And if an ACP country were to develop a new product not on the list, that item would be excluded.

Some civil society organizations argue that in a worst-case scenario, GSPs could be used as a starting framework for a new trade arrangement, but with their flaws corrected to provide both market access and development assistance to ACP countries.

Because of the controversy, the British Parliament held public consultations on the EPAs in 2005. Subsequently, its parliamentary committee on international development recommended that the UK push the EU to ensure that alternatives for non-LDC ACP states guarantee the same level of market access as the Lomé arrangements. “Development,” it concluded, “should be integral to any trade options presented to the ACP, even when they are not the first choice of the EU.”

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