Global news

4 June 2012

The EU's first EPA with an African region

The EU announced in a press release that the Economic Partnership Agreements have reached their conclusion with four Eastern and Southern African states - Mauritius, Madagascar, Seychelles and Zimbabwe - they took effect on 14 may 2012. These countries will gradually open their markets to European exports over the course of 15 years, with exceptions for certain products that the countries consider sensitive.

EU Trade Commissioner Karel De Gucht said "This is excellent news and I salute the hard work of negotiators and colleagues on all sides. With this trade deal we hope to accompany the development of our partners in Eastern and Southern Africa and open up better and lasting business opportunities."

At the end of 2007, Comoros, Madagascar, Mauritius, Seychelles, Zambia and Zimbabwe concluded an interim Economic Partnership Agreement with the EU. Four countries (Madagascar, Mauritius, Seychelles and Zimbabwe) went ahead and signed it in August 2009. These four countries have now taken and completed steps towards ratification or notified application, so that the agreement can now be properly implemented. This marks the first instance in which an African region interim EPA is fully applied.

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EU's EPA conduct condemned by EAC legislators and civil society

The European Commission has come under fire  from African legislators and civil organisations for its pursuit of "unrealistic" EPA deadlines (see TNI Vol 10 Number 7). The backlash follows the release of a joint EAC/EU statement at the end of April's EPA oversight conference, which called upon the EC to "desist from using policy leverage and unrealistic deadlines to achieve their ends in the negotiations to the detriment of a mutually beneficial agreement".

Kenyan MP, Musikari Kombo, specifically urged parliamentarians who attended the conference to "find their niche in the whole EPA process" so as to keep a more watchful eye on individual negotiators. Kombo said that "the EC has identified their interests. If we go for negotiations and we don't know our interests, then they will ride over us." Continuing, he declared that Africans "are not going to negotiate on the basis of intimidation. No deal is better than a poor deal". The chairman of the Uganda parliamentary committee on Trade, Kasaija Kagwera, further called for the EAC to keep its "options open".

The swelling numbers of critically-minded African policy makers are also finding agreement among civil society.  A coalition of organisations known as the Economic Justice Network (EJN) delivered a caution to politicians last week in Accra, which presented the EPAs as a threat to African economic integration.

Whilst fears about the potential negative impact of the EPAs upon rural livelihoods have been sparked by the EU's reluctance to abolish agricultural subsidies, The EJN's main point of contention is that the EPAs could turn Africa into nothing more than a perpetual supplier of raw materials by hindering Africa's ability to industrialize and move up the value chain.

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Malawi's new president drops peg with US dollar

Malawi's currency, the Kwacha, has dropped in value by about 50 percent following the new President's decision to break the peg with the dollar. This decision saw the exchange rate with the dollar increase from 165 to 250. The move comes as just one of many sweeping actions taken by new President, Joyce Banda, who took over leadership of the country following the death of Bingu wa Mutharika last month. She wasted no time in reshuffling the presidential cabinet and replacing the governor of the central bank.

Bridges Africa attends WTO panel on Plurilateral Trade Agreements

ast week, the WTO hosted an open panel to discuss the emergence of plurilateral trade agreements and their implications for the working framework of the WTO. Speakers included Roberto Azevedo, Brazilian Ambassador; Patrick Low, Chief Economist at the WTO; Xianhun Lu from the Chinese Mission; Gabrielle Marceau of the University of Geneva; and Kenneth Schagrin from the US mission.

The talks provoked more attention than anticipated, necessitating a change in venue to the WTO's Geneva headquarters. Speakers covered a lot of ground, beginning with an emphasis on the question of definition: what, according to the contrasting realms of law, politics, and economics, are Plurilateral Trade Agreements? It was quickly established that the legal perspective, in stressing the centrality of procedural consensus in decision-making, defines PTAs primarily as a deviation from one of the basic pillars of the multilateral system: the ‘Most Favoured Nation' principal, which ostensibly guarantees equal trade advantages to all WTO members. As a starting point for the debate, participants seemed to agree on the actual lack of a detailed definition.

Most speakers highlighted that the recent rise in PTAs - such as the Anti-Counterfeiting Trade Agreement and the Trans-Pacific Partnership - has its foundation in economics. With most nations being in no position to liberalise at the moment, the oxymoron of exclusion in integration is becoming the standard. Speakers could not, however, agree upon what exactly this proliferation of PTAs means for the multilateral system.

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Release of the first UNDP Africa Human Development Report 2012

Yesterday, the Bridges Africa team attended a UNDP Round Table Discussion on the recently published Africa Human Development Report 2012. The publication is the first regional report on Africa by the UNDP, and it bears a blunt warning: the recent impressive levels of economic growth on the continent are unsustainable as long as African countries continue failing to reach out to the poorest 25 percent of their populations. This group, consisting of every one-in-four Africans, amounts to 214 million people who are faced with food insecurity on a daily basis.  Africa's stark economic improvements have been "a dramatic turn around," said Pedro Conceição, Chief Economist at the UNDP, "but it has not translated into food security".

Key to the report's analysis is the idea that the resources to increase Africa's agricultural yields are there, what is lacking are the adequate policies. According to Pedro Conceição, four elements - the stability, availability, access to and use of food - are critical to food security; without them human development is affected directly in terms of health and education, as well as indirectly in terms of productivity loss and lack of social participation.

The Executive Director of UNITAR, Carlos Lopez said that the economic success of the continent is encouraging, especially in light of Africa's increased integration in the global economy, as well as the ever-increasing role of its service sector. "Africa could be on the brink of an economic takeoff just like china was 30 years ago," he said. "A green revolution is needed, but not the same kind as occurred in China throughout the 1970s".

"Africa cannot repeat the Asian experience," agreed Abdessalem Ould Ahmed, "because whilst it saved millions of people, it harmed the environment. We need to use eco-friendly technologies".

Participants agreed that food security is not a narrow issue related only to storage, prices or subsidies: a number of factors are important.  The report suggests a multifaceted approach. Specifically, four critical areas of reform are identified as essential: 1/ Agricultutal productivity ; 2/ Nutrition; 3/ Building and maintaining resilience and 4/ Empowerment and social justice.

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G8 pushes for private sector route to food security in Africa

On a 23rd of May Bridges Weekly published an article related to the announcement of G8 leaders to invest in African agriculture and enhance agricultural productivity. US President Barack Obama announced over US$ 3 billion in private-sector investment plans to boost food security. G-8 and African leaders committed to the New Alliance for Food Security and Nutrition in order to raise 50 million people out of poverty over the next 10 years by investing in modern agricultural methods and technologies. See full article here :

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