Africa and the Trade Wars

Africa and the Trade Wars

Not too long ago the media reported on a raging trade dispute between the European Union and China which it tagged the “Bra Wars”. It was basically a disagreement over Chinese textile exports to Europe. Never before had corsets been the subject of heated discussions at the international negotiating table.

The latest war of words is over cotton. Indeed cotton is the raw material that once
sustained slavery and the industrial revolution. The trades tough talk between the ministers occurred at the recently held Sixth Ministerial of the World Trade Organisation (WTO) in Hong Kong. This is not the first time that cotton producers have been thrust on to the world centre stage. As it stands, it was one of the issues that led to the collapse of talks at the WTO conference held in Mexico in 2003.

The main bone of contention is over farm subsidies especially in Europe and the US. In more specific terms the trade talks are all part of a larger campaign, which seeks to secure a fair trade deal for developing countries especially in Africa as a poverty reduction strategy. The argument is for the elimination of market access constraints as part of the larger goal of promoting fair trade. This, it is argued, would go a long way in helping Africa to overcome extreme poverty. According to UK Prime Minister, Tony Blair, “a one per cent increase in Africa’s share of world trade will benefit Africa by over $70billion”.

So in recognition of this need for Africa in particular, the issue of agricultural subsidies and tariffs as practised in Europe and the US dominated the Hong Kong trade talks. And cotton more or less became the symbol of global trade inequity depicted through the world’s richest nation – America – refusing point blank to make realistic cuts to the subsidies given to its cotton farmers. In fact amongst the US farming community we are told that cotton is called “White Gold” because it brings in enormous wealth making the US the world’s biggest cotton exporter. This is made possible through the cotton subsidies, which stand at $4 billion per annum and other cotton export support programmes which have given US farmers unfair leverage in the world market.

In Africa, cotton farmers lose as much as $450 million in income due to the cheap US cotton being dumped on the markets. The slump in prices has led to an increase in poverty amongst cotton farmers in countries such as Mall, Burkina Faso and Republic of Benin. The significance of the farm subsidies issue and how it affects Africa was further highlighted with the Beninoise singer, Angelique Kidjo going to Hong Kong to lobby trade ministers to think carefully about the impact their decisions would have on-the African cotton producers.

To the disappointment of the Africa cotton producers lobby, all the US was willing to concede was duty free access for cotton while the critical matter of the removal of subsidies which would go a long way to alleviate the difficulties of cotton producing countries was virtually left intact at least until 2010.

This naked display of self-interest is not an unusual occurrence by the US in its approach to global issues. Not for the first time has the nation blatantly put its self-interest above that of the rest of the global community. It displayed a similar brand of recalcitrance over the issue of carbon emissions and global warning in the Kyoto Treaty. As a matter of fact at the time the US

Not too long ago the media reported on a raging trade dispute between the European Union and China which it tagged the “Bra Wars”. It was basically a disagreement over Chinese textile exports to Europe. Never before had corsets been the subject of heated discussions at the international negotiating table.

The latest war of words is over cotton. Indeed cotton is the raw material that once
sustained slavery and the industrial revolution. The trades tough talk between the ministers occurred at the recently held Sixth Ministerial of the World Trade Organisation (WTO) in Hong Kong. This is not the first time that cotton producers have been thrust on to the world centre stage. As it stands, it was one of the issues that led to the collapse of talks at the WTO conference held in Mexico in 2003.

The main bone of contention is over farm subsidies especially in Europe and the US. In more specific terms the trade talks are all part of a larger campaign, which seeks to secure a fair trade deal for developing countries especially in Africa as a poverty reduction strategy. The argument is for the elimination of market access constraints as part of the larger goal of promoting fair trade. This, it is argued, would go a long way in helping Africa to overcome extreme poverty. According to UK Prime Minister, Tony Blair, “a one per cent increase in Africa’s share of world trade will benefit Africa by over $70billion”.

So in recognition of this need for Africa in particular, the issue of agricultural subsidies and tariffs as practised in Europe and the US dominated the Hong Kong trade talks. And cotton more or less became the symbol of global trade inequity depicted through the world’s richest nation – America – refusing point blank to make realistic cuts to the subsidies given to its cotton farmers. In fact amongst the US farming community we are told that cotton is called “White Gold” because it brings in enormous wealth making the US the world’s biggest cotton exporter. This is made possible through the cotton subsidies, which stand at $4 billion per annum and other cotton export support programmes which have given US farmers unfair leverage in the world market.

In Africa, cotton farmers lose as much as $450 million in income due to the cheap US cotton being dumped on the markets. The slump in prices has led to an increase in poverty amongst cotton farmers in countries such as Mall, Burkina Faso and Republic of Benin. The significance of the farm subsidies issue and how it affects Africa was further highlighted with the Beninoise singer, Angelique Kidjo going to Hong Kong to lobby trade ministers to think carefully about the impact their decisions would have on-the African cotton producers.

To the disappointment of the Africa cotton producers lobby, all the US was willing to concede was duty free access for cotton while the critical matter of the removal of subsidies which would go a long way to alleviate the difficulties of cotton producing countries was virtually left intact at least until 2010.

This naked display of self-interest is not an unusual occurrence by the US in its approach to global issues. Not for the first time has the nation blatantly put its self-interest above that of the rest of the global community. It displayed a similar brand of recalcitrance over the issue of carbon emissions and global warning in the Kyoto Treaty. As a matter of fact at the time the US

Not too long ago the media reported on a raging trade dispute between the European Union and China which it tagged the “Bra Wars”. It was basically a disagreement over Chinese textile exports to Europe. Never before had corsets been the subject of heated discussions at the international negotiating table.

The latest war of words is over cotton. Indeed cotton is the raw material that once
sustained slavery and the industrial revolution. The trades tough talk between the ministers occurred at the recently held Sixth Ministerial of the World Trade Organisation (WTO) in Hong Kong. This is not the first time that cotton producers have been thrust on to the world centre stage. As it stands, it was one of the issues that led to the collapse of talks at the WTO conference held in Mexico in 2003.

The main bone of contention is over farm subsidies especially in Europe and the US. In more specific terms the trade talks are all part of a larger campaign, which seeks to secure a fair trade deal for developing countries especially in Africa as a poverty reduction strategy. The argument is for the elimination of market access constraints as part of the larger goal of promoting fair trade. This, it is argued, would go a long way in helping Africa to overcome extreme poverty. According to UK Prime Minister, Tony Blair, “a one per cent increase in Africa’s share of world trade will benefit Africa by over $70billion”.

So in recognition of this need for Africa in particular, the issue of agricultural subsidies and tariffs as practised in Europe and the US dominated the Hong Kong trade talks. And cotton more or less became the symbol of global trade inequity depicted through the world’s richest nation – America – refusing point blank to make realistic cuts to the subsidies given to its cotton farmers. In fact amongst the US farming community we are told that cotton is called “White Gold” because it brings in enormous wealth making the US the world’s biggest cotton exporter. This is made possible through the cotton subsidies, which stand at $4 billion per annum and other cotton export support programmes which have given US farmers unfair leverage in the world market.

In Africa, cotton farmers lose as much as $450 million in income due to the cheap US cotton being dumped on the markets. The slump in prices has led to an increase in poverty amongst cotton farmers in countries such as Mall, Burkina Faso and Republic of Benin. The significance of the farm subsidies issue and how it affects Africa was further highlighted with the Beninoise singer, Angelique Kidjo going to Hong Kong to lobby trade ministers to think carefully about the impact their decisions would have on-the African cotton producers.

To the disappointment of the Africa cotton producers lobby, all the US was willing to concede was duty free access for cotton while the critical matter of the removal of subsidies which would go a long way to alleviate the difficulties of cotton producing countries was virtually left intact at least until 2010.

This naked display of self-interest is not an unusual occurrence by the US in its approach to global issues. Not for the first time has the nation blatantly put its self-interest above that of the rest of the global community. It displayed a similar brand of recalcitrance over the issue of carbon emissions and global warning in the Kyoto Treaty. As a matter of fact at the time the US is said to have continuously disregarded the Kyoto Agreement. “Kyoto would have destroyed our economy”. President Gorge Bush is quoted as saying when asked about his country’s commitment to cutting greenhouse emissions. Disappointment over his stance on the issue of
global warming was expressed during the countdown to the G8 Summit last June. A public opinion poll conducted in the UK revealed that 8.3% wanted Prime Minister Tony Blair to confront President George Bush over global warming. This is an indication of how the British public felt about America’s lukewarm attitude to the matter. This is significant because as
far as fair trade is concerned there is also a marked difference between the attitudes of the US and the EU to the issue of agricultural subsidies. The EU led by the United Kingdom has said their subsidies would be cut by 46% and that other rich nations should follow suit.

Basically, there is nothing so wrong in pushing a national interest agenda. There is, however, everything wrong if this agenda is being shoved into the face of the rest of the world at the expense of the vulnerable. In this case, it is the cotton farmers in West and Central Africa who are left holding the short end of the stick. Sometimes one is tempted to query just how committed in America to the global poverty reduction campaign. For instance it gives only 0.2% of its GDP in overseas aid, which is well below the UN’s 0.7% target. If it’s truly committed to poverty reduction in developing countries it certainly needs to display its leadership qualities and political will which by the way it appears to display in other areas – and champion the relevant trade reform required to address the trade imbalance. In a recent speech to the UN, President Bush is quoted as saying on the issue of the removal of all agricultural and industrial subsidies that the US would do it if other countries did too”. Sounds like a case of who would blink first!

The US is very concerned with security issues in the developing world. One wonders if the continual stunting of economic growth of some developing nations due in part to the lack of access to industrialized countries markets isn’t sowing the seeds of instability and unrest,
which may boil over into larger conflicts. Indeed this is one security issue for them to mull over and decide if they want to be part of the committed global action that seeks to address world poverty.

Speaking recently on the matter of trade, Tony Blair noted; “self-interest and mutual interest are inextricably, linked. National interests can best be advanced through collective action”. This is clearly diplomatic speak addressing the reluctance of the US to remove agricultural export subsidies.

The US loves to uphold the cause of freedom and as we have witnessed thrives on driving this agenda of freedom especially outside its own shores. Making trade work for the developing countries especially in Africa would be a demonstration of its desire to enthrone economic freedom and give millions of people an opportunity to escape poverty. The livelihoods of at least 10 million farmers and their dependents are caught up in the dispute over cotton subsidies. Some development experts argue that trade reforms alone are not sufficient to pull developing countries out of extreme poverty. The same may be said of subsidies too. In fact, some have queried whether ending subsidies would make a difference? Suffice to say this does not negate the argument that the need to improve market access in order to boost export growth is still valid.

And while it is true that all these are part of the broader global trade policy that can only work in favour of Africa if all the pieces of the jigsaw are in place, there is certainly a need for the continuous public debate on the various components in the fair trade issue as well in the global campaign for the reduction extreme poverty.

Sustained lobbying of the US and her allies by civil society is very necessary to ensure that trade barriers are eventually removed. This is purely in the interest of sustaining economic growth in Africa and in the long term giving her the chance to climb out of extreme poverty.

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