In Africa, Beyond Humanitarianism

In Africa, Beyond Humanitarianism

By Princeton N. Lyman and Patricia Dorff
Special to washingtonpost.com's Think Tank Town
Thursday, August 9, 2007; 12:00 AM

Africa has risen steadily in importance to the United States in recent years. Traditionally, Africa has been thought of primarily as an object of humanitarian concern. That perception has been highlighted by popular figures, such as Bono, Bob Geldof, George Clooney and others, focusing public attention on Africa's poverty, conflicts and major diseases. Africa has further captured worldwide attention due to the conflict in Darfur. Because the United States has judged the Sudanese government's campaign in the region to be genocide, the conflict has taken on enormous moral importance.

But Africa has other reasons, beyond these critical humanitarian issues, to command America's attention. Africa is currently the scene of major competition for access to its natural resources. China, India, Malaysia, South Korea, Brazil and other countries with rapidly growing economies are turning to Africa for oil, minerals, timber and other resources. China in particular has led in this competition with significant amounts of aid along with financial backing for hundreds of Chinese companies to invest in Africa.

This new competition comes at a time when Africa's oil is becoming more important to the United States. Currently, 15 percent of U.S. oil imports come from Africa, as much as from the Middle East. Moreover, Africa is poised to double its output over the coming decade and potentially could provide as much as 25 percent of U.S. imports. African capacity to export natural gas is also growing rapidly, with American and British companies making billions of dollars in investments in liquefied natural gas plants along the Gulf of Guinea. Yet nearly all of Africa's oil reserves are in countries experiencing violence or instability, and in some cases serious violations of human rights. As the United States is discovering in the Middle East and Latin America, it is impossible to count on a continuing supply of oil from Africa without attention to the quality of governance, the degree that indigenous populations are benefiting from oil, and long-term stability.

In addition, Africa's importance is also growing in trade negotiations. With 40 of the World Trade Organization's 185 members, Africa is demanding significant reduction of U.S. and European agricultural subsidies and tariffs in return for agreement on a new round of worldwide trade improvements. Teaming up with India, Brazil and other third world countries, Africa has essentially brought the negotiations of the so-called Doha Round to a standstill pending movement on these issues.

Africa is also rising in importance in the war on terror. Al-Qaeda terrorists bombed the American embassies in Kenya and Tanzania in 1998 and attacked Israeli facilities in Kenya in 2001. These acts revealed an extensive network of terrorist cells along the east African seaboard. The threat became apparent once again when an Islamic movement captured control of Somalia's capital, Mogadishu, in 2006 and seemed headed toward confrontation with America's ally, Ethiopia, and to be taking steps hostile to American objectives, such as protecting terrorists known to be associated with the 1998 embassy bombings.

Finally, Africa is at the center of worldwide concerns over global health. Africa is the epicenter of the AIDS pandemic, with 28 million of the 40 million infected with HIV worldwide. Africa suffers the most deaths from malaria, one million per year. Led by the United States, annual worldwide expenditures on AIDS programs have risen from less than $1 billion in 2000 to $8 billion in 2006, and the United States has begun a major malaria initiative. But estimates are that as much as $22 billion will be needed annually in the next few years for AIDS alone. Whether these costs can be met, or met without subtracting from other forms of aid for education, agriculture, etc., is very uncertain. Meanwhile, investments in health and agricultural infrastructure for control of a potential avian flu pandemic are only on the drawing board.

At the center of all Africa's issues and challenges lies the persistence of poverty. Africa is by far the poorest continent and marginal in the global trading system. Poverty adds to the potential for conflict, the vulnerability to terrorist influence, the pressures of illegal migration and the spread of disease; it constitutes a drain on worldwide aid resources. Thus, the humanitarian problems return to center stage in contemplating U.S. policy. But they cannot be treated as objects of charity, nor be satisfied with emergency aid for relief and postconflict emergencies, which have comprised much of America's recent increases in assistance.

The growing importance of Africa demands a much more focused, long-term, and carefully directed program of economic assistance and trade reform. The Bush administration has begun to move in that direction with the Millennium Challenge Account, and Congress has contributed with the African Growth and Opportunity Act, which opens the U.S. market to African exports. But much more needs to be done. Only when Africa is recognized for the growing importance it has for America will these shortcomings be overcome.

Princeton N. Lyman, a former ambassador to Nigeria and South Africa, is the adjunct senior fellow for Africa policy studies at the Council on Foreign Relations and an adjunct professor at Georgetown University. Patricia Dorff is director of publications at the Council on Foreign Relations. This article is excerpted from a new CFR Book, Beyond Humanitarianism: What We Need to Know About Africa and Why It Matters.

Trade Between FTA Signatories In Asean+6 Hits US$ 521.7 Bln

Trade Between FTA Signatories In Asean+6 Hit A Staggering US$521.7 Bln


KUALA LUMPUR, Aug 8 (Bernama) -- As Free Trade Agreements (FTA) have gone into effect one after the other in the Asia-Pacific region, trade between the FTA signatories has reached US$521.7 billion (US$1=RM3.45), or 44.3 percent of the US$1.1768 trillion total of trade inside the ASEAN 6 region.
Asean is a grouping of ten countries namely Malaysia, Singapore, Brunei, Philippines, Thailand, Indonesia, Vietnam, Laos, Cambodia and Myanmar, while Asean 6 includes Japan, China, South Korea, India, Australia and New Zealand.
Assuming that FTA negotiations now underway between ASEAN countries and Japan, India, and Australia move forward, the proportion of trade accounted for by FTA signatories is sure to increase, said the Japan External Trade Organisation (JETRO) in a research report released here, today.
Intra-regional trade has expanded and, as of 2006, already accounted for 43.3 percent of ASEAN 6's total trade, up from 40.6 percent in 1999.
JETRO said as the World Trade Organization (WTO) talks in the previous Uruguay Round and the current Doha Round have been slow to bear fruits, more countries have started to pursue FTAs to supplement the lagging WTO.
As of July this year, 143 Free Trade Agreements (FTAs) were effected worldwide.
"Until 1989 there were only 19, but starting in the 1990s the number has increased dramatically. In the 1990s, 48 agreements were formed, and 76 new agreements have been created since 2000," said JETRO in the 42-page report.
It said the shift towards FTAs by the major trading countries such as United States, which has driven other competing countries to turn to FTAs, as another possible reason for this acceleration.
"In other words, each new FTA spurs the creation of yet more FTAs."
Recent years have also seen an increase in regional FTAs that cut across regional boundaries and create a global network of agreements.
FTAs between advanced and developing countries are also on the rise. This type of FTA represented only about 30 percent of all agreements prior to 2004, but the figure has increased to more than 50 percent since 2005.
On a regional basis, notable examples include the European Union with West Asia East, Eastern Europe and Africa, the U.S. with Central and South America, and Japan with other Asian nations, including those in ASEAN, aimed at securing fast-growing markets in each region, said JETRO.
Recent FTAs also go beyond the elimination of tariff and non-tariff barriers to cover a wide range of fields including services, investments, intellectual property, competition policy and dispute settlement.
According to a WTO report, until 1999 there were only 11 FTAs that included services but since 2000, that number has increased by 32 to a total of 43.
It said that 63.2 percent of FTAs concluded since 2005 include services.
Turning to the Asean region, JETRO said last year the total value of exports from Thailand and Malaysia taking advantage of Common Effective Preferential Tariff (CEPT) was US$8.4 billion. This figure accounted for 23.5 percent of all exports from the two countries to ASEAN, excluding Singapore.
"If we look at breakdowns by destination country, the highest proportion of CEPT utilisation was for exports to Vietnam, where the share of exports falling under CEPT was 42.4 percent for both Thailand and Malaysia."
Given that Vietnam's simple average most favoured nation (MFN) tariff rate had been a high 16.8 percent, the January 2006 reduction for most products to the AFTA's 0-5 percent level significantly expanded use of the CEPT advantage.
Utilisation of FTAs between ASEAN countries and China remains limited, but the trend is upward for Thailand and Malaysia totalling 10.6 percent, it said.
In the case of Malaysia, 2006 utilisation of FTAs accounted for 8.9 percent of total exports, up dramatically from 2.9 percent in 2005.
Of total exports for both Thailand and Malaysia, utilisation of FTAs rose from 4.8 percent in 2005 to 10.6 percent in 2006, it added.

-- BERNAMA
Copyright © 2007 BERNAMA. All rights reserved.

France sees little chance of WTO trade accord given current offers

France sees little chance of WTO trade accord given current offers
08.08.07, 6:44 AM ET

PARIS (Thomson Financial) - WTO trade liberalisation talks stand little chance of bearing fruit given the proposals under discussion by negotiators, the French trade minister warned.
Secretary of state for industry and foreign trade Herve Novelli told a press conference he sees 'few chances' that the Doha round of talks aimed at reducing global trade barriers will succeed given what is on the table.
'The proposals have to be substantially improved,' he said, adding that talks 'have stumbled on the questions of (trade in) agriculture and industry.'
The Doha round aimed at extending the benefits of freer trade to poor countries was launched in the Qatari capital in 2001 but has foundered ever since.
Emerging market and developing countries are demanding lower tariffs for their goods exported to industrialised nations.
Rich countries are for their part seeking greater access for industrial products in emerging and developing nations.
Negotiators, operating under the auspices of the World Trade Organisation, will open a new series of talks in Geneva on Sept 3.
tfn.paris@thomson.com
afp/hem/gp
Copyright AFX News Limited 2007. All rights reserved.

Africa: WTO Braces for Make Or Break Doha Talks

WTO Braces for Make Or Break Doha Talks

Business Daily (Nairobi)
OPINION
7 August 2007
Posted to the web 7 August 2007
By Martin Khor
The World Trade Organisation broke for its one-month summer break after an uneventful General Council meeting on Friday which dealt mainly with regular agenda items such as review of waivers and various work programmes.
The WTO members appeared relieved that there was not a more serious session, after they had gone through stressful and eventful meetings of the past three days - the review of agricultural modalities draft on Tuesday, the review of the non-agricultural market access (NAMA) modalities draft on Wednesday and the Trade Negotiations Committee on Thursday.
However, as they left for the break, many diplomats were wondering what will happen in September, which is widely believed to be the crucial month in which the Doha negotiations will finally "make or break."
The negotiating atmosphere has been badly damaged by the strong negative reaction by most developing-country groupings to the NAMA draft of Canadian Ambassador Don Stephenson. In the Wednesday and Thursday meetings, they strongly attacked the draft for being biased, prejudging the negotiations, and for having the potential to harm the industrialisation prospects of developing countries.
In contrast, WTO members seemed able to broadly accept the agriculture draft of Ambassador Crawford Falconer of New Zealand as one that can facilitate further negotiations, even though most groups and members that spoke found problems with various elements of the paper.
Also in September, meetings are expected on other aspects of the Doha agenda, including services and rules. It will be a full and intense month, in the atmosphere of "this is the last chance to save the Round", as a couple of Ambassadors put it at this week's meetings.
It is generally thought that by October, the United States will be pre-occupied with its Presidential elections, and would not be able to focus on the Doha talks, and it would also be clear by then that there would be no fast-track authority renewal.
But the September "invisible deadline" has instead suffered a severe setback, with a majority of developing countries feeling and expressing a strong alienation from or even revulsion of the NAMA paper.
This has left the next steps of the negotiations in even greater uncertainty.
The TNC meeting on Thursday ended without a substantive conclusion from Lamy. Some delegates had expected him to proclaim the two drafts to be the basis for September's negotiations, but the battering that the NAMA draft received made it unwise for any attempt to be made to bless either text as even a basis for negotiations.
The writer is the director of Third World Network

Copyright © 2007 Business Daily. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com).

US stance on world trade deals seen hardening

U.S. stance on world trade deals seen hardening
Tue Aug 7, 2007 4:17PM EDT


NAPA, California (Reuters) - The appetite for trade deals in the United States is fading and the window to strike an agreement in the Doha round of farm talks is closing, analysts and lawmakers said Tuesday.
"There is a growing protectionist side in both political parties," Jim Wiesemeyer, vice-president of farm and trade policy at Informa Economics, said in a speech at the annual meeting of the industry group American Sugar Alliance here.
He said progress must be made in the Doha round of farm talks by the end of the month or there is a risk that a watered-down version of the trade agreement will be the result in what he called "Doha lite."
"The days of the multilateral (trade agreements) are over," he said, adding that agricultural powerhouses like Brazil and India are more interested in what they can derive from a deal but have made few concessions in getting something done. "They want to get and not give."
His sentiment was echoed in part by lawmakers who attended the conference of the U.S. sugar industry.
"Our biggest challenge in the next few years is what happens in trade," said Rep. Mike Simpson (R-Idaho) who quickly added that any deal must be fair for American farmers as well.
He said that he is increasingly looking at the idea that trade deals entered into by the United States should also look at labor rules and environmental standards.
Sen. Norm Coleman (R-Minnesota) groused that the Doha round of talks is "proceeding at a snail's pace" and pacts with countries like South Korea would have to deal with issues like beef sales to the North Asian country which were affected by lingering fears over mad cow disease.

© Reuters 2007. All rights reserved.

Trading Without America

Trading Without America
August 7, 2007; Page A10
Wall Street Journal

Washington's political class likes to fret about China's rising influence, especially in Asia. So it's nothing short of astonishing that the U.S. Congress seems prepared to kill a U.S.-South Korea Free Trade Agreement that would strengthen America's economic and strategic position on China's doorstep for years to come.
[Trade Fever]
Only two months after pressuring Seoul to insert labor and environmental concessions, House Democrats now say they won't approve the FTA in any case. Their nominal excuse is that the car import provisions aren't good enough, but Senator Hillary Clinton also claims the pact will increase the U.S. trade deficit and cost middle-class jobs. Presidential hopefuls John Edwards and Barack Obama are taking the same AFL-CIO line. If they prevail, they'll be doing great harm to U.S. economic leadership in Asia and the world.
The U.S.-South Korea FTA is the most ambitious free trade agreement Washington has signed outside North America. Running to 1,400 pages, it represents a radical opening of Korea's market in multiple areas, including finance, services, agriculture and, yes, automobiles. Economists estimate liberalization could raise Korea's GDP by as much as 2% over time, as competition drives down prices and promotes innovation. Korea is the world's 10th-largest economy, and already America's 7th-largest export market, but the FTA would open the country to far more American goods.
The pact is also vital to continued U.S. influence in Northeast Asia. China is already South Korea's largest trading partner, and Chinese Premier Wen Jiabao has said he wants to negotiate an FTA with Korea "as soon as possible." This is part of the larger Chinese attempt to expand their political and economic influence throughout Asia and the Pacific: Beijing has signed a deal with the 11-member Association of Southeast Asian nations and is negotiating with Australia and New Zealand. By defeating the Korean FTA, Congress would be pushing Seoul further into China's orbit and diminishing American influence.
More broadly, as the Doha multilateral trade round sputters, the rest of the world is pursuing FTAs whether or not the U.S. joins the party. (See the nearby chart.) This is not a desirable trend if it means a world dividing into preferential trade blocs. We'd prefer a world with everyone trading by the same open-market rules. But if Doha is going to fail, it makes no sense for the U.S. to sit on the sidelines and let other countries give their companies and workers an edge over Americans in growing economies. While Congress fiddles, the European Union is pressing its own talks on a trade pact with Seoul.
In any case, the U.S.-Korea FTA is a big new opportunity for American goods and services. As soon as the deal goes into force, 95% of tariffs on consumer and industrial goods will be eliminated. Within a decade, almost all remaining tariffs will hit zero. In financial services, U.S. firms will have carte blanche to start up or acquire South Korean companies, part of Seoul's aspiration to become a regional financial hub.
Agriculture has long been a bulwark of Korean protectionism, but under the deal more than half of all U.S. farm exports will receive duty-free treatment. The pact also guarantees that U.S. investors will be treated on a level playing field in Korean courts. And it sets up an international arbitration panel for U.S. firms that believe they've been wronged by the Korean government.
Even in autos, the pact is a big improvement over South Korea's current protectionism. Last year Korea imported 4,344 U.S.-made passenger vehicles, while the U.S. imported more than 695,000 from Korea. Seoul has also failed to follow through on its 1995 and 1998 auto agreements with the U.S., but the biggest losers on that score have been Korean consumers. The free-trade pact would eliminate South Korea's 8% tariff on passenger cars (versus 2.5% in the U.S.), and it would introduce a new mechanism to provide a head's-up about Korea's bad habit of imposing non-tariff import barriers.
The problem with U.S. autos in Korea is more than trade barriers, by the way. European car makers are subject to similar barriers, but their sales are doing just fine. It's also worth noting that, while Ford and Chrysler oppose the FTA, General Motors does not, perhaps because it is doing well in its joint venture with Daewoo.
No bilateral trade agreement is ideal, but any pact should be judged on whether it opens markets more than current law and in a way that benefits the broad national interest. The U.S.-South Korea trade pact clearly meets those tests. Defeating it will send a message of American weakness and insularity to the fastest-growing region of the world.

Africa: Development Through Trade

Development Through Trade

Business Day (Johannesburg)
OPINION
6 August 2007
Posted to the web 6 August 2007

By Nkululeko Khumalo
Johannesburg

HIGH-ranking officials, including US Trade Representative Susan Schwab, and representatives from African countries that are beneficiaries of the Africa Growth and Opportunity Act (Agoa), descended on the Ghanaian capital Accra to attend the Sixth Agoa Forum on July 18-19.
Agoa is a non-reciprocal preferential trade scheme whereby the US offers the 38 eligible countries (including all Southern Africa Customs Union member states) duty and quota-free access to its market. The scheme covers more than 6000 products.
The forum is meant to celebrate Agoa's achievements and seek to help the beneficiaries maximise existing market access opportunities, and involves Africa's business community as well as the civil society organisations. While Agoa has had a very positive effect since it came into force in 2001, it is high time African countries started thinking about the future of their trade relationship with the US beyond 2015, when the current arrangement expires.
This is imperative, particularly for Sacu countries that are among the biggest Agoa beneficiaries. Though Sacu is the US's second largest trading partner in Africa (Nigeria, whose exports are mainly petroleum products, occupies the first spot), there is no contractual agreement to guarantee and extend the market access opportunities they currently enjoy.
Further, the current relationship does not include the fastest growing area of trade, namely trade in services. Nor are there legally binding pacts to regulate important issues in bilateral economic relations, especially investment and intellectual property rights.
The US-Sacu free trade agreement (FTA) negotiations that began in June 2003 aimed to address this situation. Through the FTA, Sacu sought to achieve Agoa-plus liberalisation (by locking in and possibly extending current market access); address non-tariff barriers affecting their US-bound exports; spur regional integration in Sacu; and strengthen relations with the US, possibly as an insurance against potential failure of the Doha Round.
The US, on the other hand, aimed to use the FTA to eliminate barriers to its goods and services exports in the Sacu market, strengthen intellectual rights, build alliances for the WTO negotiations, and level the playing field vis-€-vis the European Union, which benefits from the Trade, Development, and Cooperation Agreement they signed with SA.
However, owing to differences between the parties on a range of issues, including the scope and anticipated depth of commitments, the parties finally decided in April 2006 to abandon the FTA in favour of a less contentious and politically palatable piecemeal approach (which they hope will lead to a fully-fledged FTA in future).
In terms of this plan, Sacu and the US will sign a Trade, Investment and Development Cooperation Agreement (Tidca) that would enable them to consult one another with a view to facilitating two-way trade and investment, conclude mutually beneficial agreements , and work towards reaching an FTA. The parties are reportedly making headway and were expected to sign the Tidca on the margins of the Agoa Sixth Forum.
While the Tidca idea seems workable, there is a danger that it may end up replacing the original ambition to have an FTA instead of being a necessary building block towards it. There are concerns that it might simply provide an excuse for failure to resume negotiations when the US Trade promotion Authority is renewed in future.
To be meaningful, the Tidca should have a clear agenda on how the parties envisage the resumption of actual FTA talks. Sacu countries, in particular, should ask themselves whether they intend to wait for Agoa to expire -- in which case they will have less bargaining power -- before they consider the FTA or not.
In my view, it would be in Sacu's interest to actually drive the Tidca process to ensure that they lay a solid foundation for an FTA whose terms are favourable to them. The argument that services and trade related issues should be excluded from the FTA because the region does not enjoy harmonised policies is beginning to ring hollow in light of the SADC-EU Economic Partnership Agreement negotiations. All Sacu countries have no objections to negotiating on these issues, barring SA and Namibia. Tellingly, even Lesotho, a least developing country that is not required to make any commitments on services and regulatory issues in terms of WTO rules, is apparently not threatened by them.
Clearly, the Agoa Sixth Forum was a good opportunity for both celebration and deep reflection, especially for Sacu. African countries do not have much luxury to procrastinate -- the Doha Round remains semi-paralysed and Agoa and even the Generalised System of Preferences (another preference scheme catering for developing countries in general, not just Africans) are not permanent. Therefore Agoa should not be seen as a viable alternative to a contractual agreement, which typically should have a development component.
Finally, it is not clear which course Agoa beneficiaries will take post-2015, but what is certain is that unilateral preference schemes have an expiry date.

Nkululeko Khumalo is senior researcher: trade policy at the South African Institute of International Affairs.

Copyright © 2007 Business Day. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com).