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Africa: Trade, Europe
Africa: Trade, Europe
Date distributed (ymd): 000602
Document reposted by APIC
+++++++++++++++++++++Document Profile+++++++++++++++++++++
Region: Continent-Wide
Issue Areas: +economy/development+
Summary Contents:
This posting contains the first issue of a new newsletter from
Action for Southern Africa on trade and development issues. A
related posting today contains news stories summarizing reaction
and content of the final version of the Africa Growth and
Opportunity Act passed by the U.S. Congress and signed by President
Clinton in May.
+++++++++++++++++end profile++++++++++++++++++++++++++++++
Southern Africa - Europe
Trade & Development Update
Volume 1 Issue 1
May 2000
About ACTSA's Trade & Development Update Trade and Development
Update is a new initiative from Action for Southern Africa. It will
aim to help policy-makers, researchers and campaigners keep up to
date with the latest news and policy developments in trade between
Europe and Southern Africa. It will particularly highlight Southern
African initiatives and analysis.
Produced quarterly, it is free and available by E-mail. If you
would like more information, to subscribe or if you have
suggestions or contributions, contact Liz Dodd at: ACTSA 28 Penton
Street London N1 9SA UK Tel: +44 20 7833 3133 Fax: +44 20 7837 3001
E-mail: [email protected]
ABOUT ACTSA Action for Southern Africa (ACTSA) is a lobbying and
campaigning organisation based in the UK. ACTSA challenges policy
and decision makers in the UK, Europe and internationally to
support peace, democracy and development across Southern Africa.
Formed in 1994, ACTSA is the successor organisation to the
Anti-Apartheid Movement.
Lome successor waiver blocked
Panama - with the support of Guatemala, Honduras and Ecuador - is
threatening to hold up the process of granting a new WTO waiver for
the successor to the Lome Convention until the separate banana
dispute is settled. The deal which took two years to negotiate and
will establish the basis for aid, trade and political co-operation
between the EU and 71 African, Caribbean and Pacific (ACP)
countries over the next twenty years is due to be signed in Suva,
Fiji on 8 June. It is widely believed, given the history of the
banana dispute, that the US is behind this blocking move. The
waiver request is expected to be discussed at the WTO General
Council on 7 July.
Glenys Kinnock, British MEP and Rapporteur to the European
Parliament's Development Committee on the negotiations comments,
"Any suggestions that the WTO waiver should be blocked, or
indefinitely delayed, has no political, economic or moral
credibility. The US should consider its position very carefully at
this time and should give unequivocal support to Europe and the
ACP's new partnership."
For a more detailed analysis of the new Suva Convention see below.
Getting to grips with grappa
In February, Italy and Greece threatened not to ratify the landmark
Trade, Development and Co-operation agreement between the EU and
South Africa which was signed by their representatives in October
1999, unless South Africa agreed to stop using the terms grappa and
ouzo. This threatened the whole deal estimated to be worth �10.6
billion. South Africa only produces 30,000 bottles of grappa a year
and produces no ouzo.
The EU's protectionist stance prompted an uncharacteristic outburst
from South African President Thabo Mbeki, who described the EU as
an "unreliable partner for trade negotiations". At the EU-ACP Joint
Assembly held in Abuja, Nigeria in March, South African delegate
and chair of the South African Parliament's Portfolio Committee on
Trade and Industry, Rob Davies noted that "certain vested
interests" had almost been allowed to hijack the new strategic
relationship between the EU and South Africa.
British MEP, Caroline Lucas also warned that the EU's behaviour had
set a worrying precedent for future talks between the EU and ACP
countries.
A compromise was finally hammered out where South Africa agreed
phase out the use of the terms pending a decision on the issue of
geographical indications within the Trade in Intellectual Property
(TRIPS) of Southern African activists - issued in April noted that
"The US declares itself champion of 'free trade', but unilaterally
restricts the US market only to those African countries that submit
to its conditions."
Too little, too late
Following the devastating floods in Mozambique and fresh calls for
total debt cancellation, the World Bank and IMF agreed to cancel
one year's worth of payments and to provide soft loans to help with
the relief effort. Campaigners have dismissed these gestures as
little more than worthless. The Mozambique Debt Group condemned the
World Bank's "sickening lack of humanity for all those Mozambicans
who for years have sacrificed to pay the debt service." The Group
has appealed to the World Bank to: Cancel Mozambique's foreign debt
completely; Give grants and not loans to help the emergency
situation; Not use funds released under HIPC to help in the
emergency.
WTO agriculture talks take off
New WTO negotiations on agriculture got off to a relatively smooth
start with delegates quickly agreeing on a timetable for the first
phase. Following some controversy, Peruvian Ambassador, Jorge
Voto-Bernales will Chair the Special Negotiating Sessions of the
Committee. The WTO Director-General, Mike Moore described the first
meeting as "constructive and businesslike?This is the WTO working
at its best."
But there are serious differences of opinion as to how the talks
fit in with the wider WTO process which is in a state of confusion
following the breakdown of the Seattle Ministerial in November
1999. The Cairns group of agricultural producers, which includes
South Africa, insists that the talks are 'stand alone'. But the
European Union, which is reluctant to dismantle its own support
systems and barriers under the Common Agricultural Policy, argues
that the agriculture talks must be part of a wider, comprehensive
trade round. Other Southern African countries stress that
agricultural talks should concentrate on addressing the special
problems of poorer countries, who they argue have seen very little
benefits from liberalisation so far.
A break for LDCs?
At the first ever Africa-Europe Summit organised by the EU and OAU
in Cairo 3-4 April 2000, the EU reiterated its pledge to launch a
process this year which would mean that by 2005, Least Developed
Countries (LDCs) would have duty free access to the EU market on
'essentially all products'.
But only weeks later proposals by the 'quad' (US, EU, Japan and
Canada) to extend this offer were criticised by developing
countries, when it emerged that they would not include improved
market access for LDCs in precisely those areas where they are most
competitive - textiles and farm goods.
EU civil society trade consultations
On 19 April, European Union Trade Commissioner, Pascal Lamy and
representatives of a wide range of European NGOs met for the first
in a series of consultation meetings aimed at making dialogue
between the European Commission and stakeholders more solid, stable
and focused.
They discussed the WTO post-Seattle and also agreed a programme for
future meetings which will be monthly and focused around a specific
set of issues each time, including trade and health, services,
agriculture, environment, investment, competition, WTO reform and
regional trade. The first issue groups will take place 29-30 May in
Brussels.
For more information on the consultations contact Haitze Siemers at
DG Trade on +32 2 299 0185 or E-mail [email protected] Or
visit DG Trade's web site europa.eu.int/comm/dgs/trade
New HIV Initiative launched
On 11 May UNAIDS announced that five pharmaceutical companies
(Boehringer Ingelheim, Bristol Myers Squibb, Glaxo Welcome, Merck
& Co, and Hoffman-La Roche) have indicated that they are willing in
principle to discount the price of HIV drugs by up to 80 per cent,
but few have provided concrete details. Executive Director of
UNAIDS called the initiative "a promising step in a long-term
process". Campaigners greeted the announcement with considerable
scepticism. Medecins Sans Frontieres noted, "This agreement does
nothing to stimulate countries' rights to produce or import
inexpensive quality drugs. The net effect of implementing this type
of program may be to further consolidate the AIDS-drug market in
the hands of a small number of multinational drug companies."
Just days earlier United States President, Bill Clinton had signed
an executive order affirming the right of African countries to seek
low-cost drugs to treat AIDS as long as their actions were
compliant with the WTO agreement on intellectual property - TRIPS.
This move potentially threatens the dominant drug companies, as it
allows countries to but cheaper generic drugs. But the US, which
wants to see the TRIPS agreement tightened up, retains the right to
challenge whether measures taken are in fact TRIPS compliant.
The Suva Convention - implications for Southern Africa
Concluding a process that began in 1996 when the EU published
their Green Paper on future EU-ACP relations, on 3 February 2000,
agreement was reached on a new relationship between the EU and 71
ACP countries, including all members of the Southern African
Development Community (SADC). The agreement will be known as the
Suva Convention after the city in Fiji, where it is due to be
signed on 8 June.
The new Agreement, which will last 20 years and covers aid, trade
and political co-operation, retains some of the hallmarks of
previous Lome Agreements, such as partnership. In addition to this,
civil society groups successfully lobbied to improve the
Agreement's commitment to poverty focus, participatory approaches
and to mainstreaming gender, environment and institutional capacity
considerations.
On the controversial subject of trade there are mixed reactions. On
the positive side, determined and skilful ACP negotiators, led by
Anthony Hilton of Jamaica, managed to keep ACP options open, with
alternatives to the EU's preferred Economic Co-operation Agreements
(ECAs) or regional free trade areas, still on the table. There is
a commitment to look at alternatives prior to the start of
negotiations in 2002 and also to review progress of negotiations in
2006.
Timetable to a new EU-ACP trade regime
2000-2008 Preparatory period - current preferences maintained
2000 Begin to liberalise essentially all imports from all LDCs
Sept 2002 Formal negotiations towards economic partnership
agreements begin
2004 Assess situation of ACP non-LDCs not in a position to
enter ECA's
2006 Assess progress in negotiations towards ECA's
2008 New trading arrangements to enter into force
2008-2020 Transitional liberalisation period
Meeting in Abuja, Nigeria in March, the EU-ACP Joint Assembly
stressed that any review of progress in the talks must be based on
an analysis of the proposal's impact on poverty eradication and
sustainable development. The Assembly also commented that any
future trading relationship should broaden ACP access to EU
markets, especially in the areas where they are most competitive.
In the wake of the Seattle debacle, ACP countries also managed to
secure a longer transition period to the new arrangements than the
EU had initially been prepared to consider. But many are still
concerned that the time scales are too tight to allow ACP countries
the necessary time to adjust their economies, build both economic
and negotiating capacity and fully explore other options. The
agreement also retains a commitment to compliance with WTO rules,
without exploring the option that the EU and ACP between them have
enough political clout to alter those rules.
The key beef and veal, and sugar protocols, which are of enormous
economic importance to Southern Africa, will be maintained,
although there is provision to review them in the light of whatever
new trade arrangements are agreed on. The SYSMIN and STABEX
instruments, which were designed to provide support for countries
affected by fluctuations in commodity prices, will be absorbed into
balance of payments support under national aid programming.
Over the next two years, groups within the ACP, including SADC,
will be investigating the pros and cons of an Economic Co-operation
Agreement for their area and assessing on what terms it would be
beneficial.
According to a recent study by Gottfried Wellmer (see below), the
disadvantages of a move towards an Economic Co-operation Agreement
far outweigh the advantages for the SADC region. The impacts would
include loss of customs revenue for SADC countries, this is
estimated to be as much as 30% of total customs revenue for
Tanzania, 23 per cent for Mozambique and 70 per cent for
Seychelles. In terms of industrial development, SADC countries will
be threatened by cheaper imports from the EU and loss of the EU
market through competition with other trading partners. In addition
there are serious concerns that such an arrangement with the EU
would undermine SADC's own moves, now behind schedule, to establish
a regional free trade area.
Many will also be looking to the lessons of the difficult and
protracted EU-South Africa negotiations. After the EU refused South
Africa full membership of the Lome Convention, South Africa agreed
to a bilateral arrangement with the EU on assurances that this
would be asymmetrical and would allow South Africa to protect its
industries as its struggled to overcome the legacies of apartheid
inefficiency. But throughout the talks, which lasted five years,
South Africa was faced with considerable European protectionism,
including the initial exclusion of 40 per cent of South Africa's
farm goods from better trade access.
As Member of the European Parliament and rapporteur on the
negotiations Glenys Kinnock warns, "EU Member States' should be
wary of allowing national interests to supersede the development
needs of developing countries and the EU's commitment to
development co-operation."
New Trade Research
New research: SADC - EU trade relations
World House, Bielefeld and Coordination Southern Africa (KOSA) of
Germany recently published Gottfried Wellmer's study, "SADC Between
Regional Integration and Reciprocal Free Trade with the EU: A Study
on Future Trade Relations between the EU and SADC States." This can
be ordered direct from the publishers for DM12.00 plus postage.
For more details contact: World House Bielefeld/KOSA August Bebel
Street 62 D-33602 Bielefeld Germany Tel: +49 521 62802 Fax: +49 521
63789 E-mail: [email protected] Web:http://www.welthaus.de
Launch of new Trade Research Centre
In March the 'Trade and Development Studies Centre Trust' (TRADES
CENTRE) opened in Harare. Formerly known as the Lome Trade Research
Unit and headed up by Dr. Moses Tekere, the centre aims to provide
policy-relevant research and analysis particularly focusing on the
relationship between trade and development in the context of WTO,
post-Lome IV ACP-EU co-operation and EU-SADC co-operation.
The centre will provide Southern Africa and other developing
counties with technical support to back up their position in trade
negotiations.
For more information contact: Dr Moses Tekere TRADES CENTRE Tel: +
263 4 740259 Fax: +263 4 702322 E-mail: [email protected]
New Series of trade briefings
Chris Stevens of the Institute for Development Studies in the UK
has produced a series of 10 very useful background briefings on
WTO- related issues, including agriculture, regional trade and
intellectual property rights. Although put together before Seattle
they are highly relevant and can be found at the IDS web site.
Institute of Development Studies University of Sussex Brighton BN1
9RE UK Tel: +44 (0)1273 606261 Fax: +44 (0)1273 691 647
http://www.ids.ac.uk
Useful Web Sites
Official SADC site
http://www.sadc.int
ACP Secretariat
http://www.acpsec.org
Organization of African Unity
http://www.oau-oua.org
ACP-EU Joint Assembly
http://www.europarl.eu.int/dg2/acp/en/default.htm
Africa Policy Information Centre (US)
http://www.africapolicy.org
Southern African Research and Documentation Centre (SARDC)
http://www.sardc.net/
Alternative Information and Development Centre (AIDC)
http://www.aidc.org.za
Eurostep
http://www.oneworld.org/eurostep
Euforic
http://www.euforic.org
UNCTAD
http://www.unctad.org
World Bank
http://www.worldbank.org
WTO
http://www.wto.org
European Commission Trade
http://europa.eu.int/comm/dgs/trade
European Commission Development
http://europa.eu.int/comm/dgs/development
ECDPM
http://www.oneworld.org/ecdpm
Development Bank of Southern Africa
http://www.dbsa.org
This material is being reposted for wider distribution by the
Africa Policy Information Center (APIC). APIC provides
accessible information and analysis in order to promote U.S.
and international policies toward Africa that advance economic,
political and social justice and human and cultural rights.
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