Page 7, 20th September 2002

20th September 2002
Page 7
Page 7, 20th September 2002 — When does 'free' mean 'unfair?'

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Locations: Geneva, Seattle, Genoa, Doha, Brussels


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When does 'free' mean 'unfair?'

When it comes to Europe's trade with Southern Africa, says Clare Riches Time after time, from Seattle to Genoa, Doha to ICananaskis, world media attention has panned in on the street protests and violence as the world's leaders gather to discuss the global economy. Seattle was a landmark in the growing movement of governments and civil society rallying against the failure of globalisation and "liberalised" trade to deliver for the majority of the world.

The mantra of "free trade is good for all" is beginning to sound hollow. More than 15 years since the Uruguay round launched the first global trade talks, it is no wonder the poor nations are up in arms. While they are being forced to open up their markets, Europe is not prepared to open up its own markets in those very areas where the developing countries have an advantage, like agriculture and textiles. Contrary to World Bank claims that globalisation is reducing world poverty, that same globalisation has not delivered for Africa.

At the various summits in recent months, African leaders have reiterated the same message. "The multilateral trading system must address decisively the issues of development and the promotion of development should form the core business of the system." While we have heard noises of agreement and stern promises from Western decisionmakers, the world's poor are increasingly marginalised within the global trade system. Last year, the US Federal Reserve Chairman Alan Greenspan publicly asserted that, "probably the single most effective action that the industrial countries could implement to alleviate the terrible problem of poverty in many developing countries would be to open, unilaterally, markets to imports from those countries." We have also listened to Tony Blair on many occasions pronounce his noble intentions for Africa in offering a route out of poverty and the critical role of trade. At the most recent gathering of the world's rich leaders, for the G8 summit in Canada in June, there was little to be said on the West's responsibilities for creating and sustaining underdevelopment, despite broad recognition ahead of the summit by G8 leaders of the hypocrisy of discussing poverty whilst blocking access to rich country markets.

Decisions made every day in Brussels or Geneva have a profound effect on the daily lives of people in Southern Africa — whether a factory is closed and jobs lost, whether a farmer grows maize or roses, whether families can earn enough to send their children to school. The EU is still Southern Africa's main trading partner — around one third of all Southern Africa's imports come from the EU and just under half its exports go there.

The region is an efficient agricultural producer and has identified moving into "nontraditional" agricultural products, such as cut flowers and vegetables as well as more processed goods, as key areas for future export development. Agriculture is extremely important in terms of livelihoods and contribution to the national economies. In Zambia, Tanzania, Mozambique and Malawi over 75 per cent of the labour force is employed in agriculture — including a very high proportion of women. In Mozambique and Tanzania the agriculture sector contributes more than 50 per cent to GDP.

Getting a fair deal from Europe is therefore critical if the region is going to address the burning issues of poverty and food insecurity as well as developing its agricultural sector, diversifying its manufacturing sector and ending the reliance on dwindling aid flows.

A report produced by the United Nations Conference on Trade and Development last September revealed that if the terms of trade had stayed at 1980 levels, Africa's share of world exports would be double today's figure. African growth per annum could have been 1.4 percent higher, raising per capita income to a level 50 percent above the current figure. This secular decline in the terms of trade has meant that African economies have had insufficient resources to invest in their own people and businesses.

Decision-makers, however, rarely take into account the effects that their policies have beyond Europe's borders, however profound these may be. This failure leads to often startling levels of incoherence between different policies – and a waste of European taxpayer's money. A poignant example of this is in 1994, when the EU increased the level of support it gave to exporters of beef to South Africa. This led to a massive upsurge in the amount of very cheap, subsidised British and Irish beef being sold in South Africa, undercutting Namibian beef farmers who heavily relied on sales to South Africa. Throughout this period, the EU was giving aid to the Namibian farmers to help them market their beef to South Africa.

Negotiations of the Cotonou Agreement, a trade deal signed between the EU and 77 African Caribbean and Pacific (ACP) countries in 2000, begin towards the end of this month and will set the framework for Southern Africa's trade with the EU for the next twenty years. It is imperative that the EU give Southern Africa the opportunity to exploit its most competitive sectors.

Firstly, the EU should remove all barriers that stop Southern Africa selling to EU markets. Tariff barriers have been re-introduced for goods which Southern Africa produces more efficiently than Europe, such as dairy products, vegetables, nuts and fruits.

Secondly, the EU must stop dumping subsidited produce on to Southern Africa's markets. Research carried out last year by the UN Economic Commission for .Africa, has shown "that rich countries continue to subsidise their agricultural sectors to the tune of £250 billion a year, flooding markets and lowering prices world-wide. This has stopped efficient farmers in Africa from realising their economic potential – resulting in stagnating incomes and greater poverty."

Finally, Southern Africa should be allowed to develop its ability to trade by protecting key sectors. European trade policies should be designed to support local efforts to build a regional trading bloc. Currently, the EU is putting this delicate process under considerable strain. Despite strong complaints by African Ministers at the international double standard which forces developing countries to open markets while continuing to allow rich country protectionism, the only achievement in the area of agriculture was a promise from the EU that it will "phase out" its massive subsidies. No timetable was placed on these commitments.

People in Southern Africa and across the developing world rely on agriculture for their living. The region is an efficient producer which has managed to diversify production into new areas and is ready to develop more valueadded goods. But it is blocked at every turn by EU protectionism and unfair competition.

European leaders should see the violence on the streets of Seattle or Genoa through the eyes of the people of developing countries who have yet to benefit from the fruits of globalisation. Dr Peter Henriot of the Jesuit Centre for Theological Reflection, a Zambian group which campaigns for social and economic justice, brings the message home. "I don't endorse street violence but neither do I accept the 'boardroom violence' of decision makers who ignore the plight of people who suffer daily from unjust international structures."

Clare Riches works for Action for Southern Africa. For further information on ACTSA, or to order an Education pack, please see or contact ACTSA on 020 7833 3133 or [email protected]

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