Bridges Weekly Trade News Digest • Volume 6 • Number 7 • 26th February 2002
News From The Regions: Africa
USTR on tour in Africa
Meeting with representatives from the South African Development Community (SADC) as part of his African tour, US Trade Representative Robert Zoellick announced US grants totalling USD 8.7 million to help improve Southern Africa’s trading capacity. In particular, the US will provide $US 3 million over three years to support SADC’s regional integration plans and link them to the Africa Growth and Opportunity Act (AGOA), $US 2.7 million over two years on customs reform and trade facilitation, and $US 3 million over two years to help local food producers to meet US and EU health standards. In addition, USAID will provide scholarships to one trade official from each SADC member to participate in a WTO training course. While Malawi’s Minister for Commerce and Industry Peter Kaleso welcomed US cooperation on social and political development, he stressed that "such initiatives must be tailor made in order to cater for the distinctive nature of the member states of SADC."
Zoellick is also reported to be stepping up efforts to increase support for biotechnology in African nations. According to trade sources, the US is looking for support among developing countries should it decided to challenge the continued EU de facto moratorium on approval of new genetically modified organisms at the WTO (see BRIDGES Trade BioRes, 7 February 2002; http://www.ictsd.org/biores/02-02-07/story3.htm). So far, Zoellick has won the support of Kenya’s President Daniel arap Moi as well as South African President Thabo Mbeki. While South Africa is the only African country yet to approve the limited use of GMOs, Zimbabwe, Kenya and Swaziland have also begun to consider their use, with other nations likely to follow.
Tanzania qualifies for AGOA
On 12 February, Tanzania obtained the right to export a range of products, including textiles and clothing, duty-free to the US market under the US Africa Growth and Opportunity Act (AGOA). In order to qualify, Tanzania had to adhere to a number of strict conditions, including that exported products are verifiably produced in Tanzania, the lifting of barriers to US trade and investment, protecting intellectual property, fighting corruption, and reducing poverty. Tanzania was given a green light on many of these fronts late last year by the World Bank and the International Monetary Fund through its qualification for the Highly Indebted Poor Countries (HIPC) initiative, which maintains similar conditionalities.
Under the AGOA, participating countries can export unlimited quantities of clothing made from US fabric, yarn and thread to the US duty-free, and a limited amount of apparel made from fabric produced in the country in question (see BRIDGES Weekly Trade News Digest, Vol. 4, No. 37, 3 October 2000, http://www.ictsd.org/html/weekly/story5.03-10-00.htm). Currently, approximately 35 countries in Sub-Saharan Africa qualify for the programme.
In other news, on 11 February, the Government of Canada announced it would forgive all $US 52.2 million in debts it is owed by Tanzania. The agreement is in accordance with the Canadian Debt Initiative (CDI), which has to date benefited 11 HIPC-qualified countries.
G-8 warn against ‘unrealistic expectations’ for NEPAD funding
Despite recent high-level support for the New Partnership for Africa’s Development (NEPAD; see BRIDGES Weekly, 12 February 2002; http://www.ictsd.org/weekly/02-02-12/story3.htm), representatives from the Group of Eight (G-8) industrialised countries warned African leaders against "unrealistic expectations" regarding financial aid that the G-8 could provide to the Partnership.
Following a two-day meeting with South African President Thabo Mbeki and the 15-member NEPAD implementation committee, Canadian official Robert Fowler stressed that NEPAD was not primarily about money, but about helping to create the appropriate climate for increased investment. Conditions included, inter alia, a commitment to good governance, effective administration and the fact that African governments will measure each other, he said. The meeting also discussed concerns about the impact of Zimbabwe’s political crisis on NEPAD progress. While Britain’s junior Foreign Minister for Africa, Valerie Amos, said that Zimbabwe was putting the entire region at risk through its poor economic management and human rights abuses, she did not believe that Zimbabwe should be seen as a litmus test for the plan. Private investors, however, do not always share this confidence, fearing that the political situation could further undermine confidence in the NEPAD Partnership.
The Partnership, which aims to promote sound macro-economic policy and democracy in return for deeper investment commitments, will be presented to the G-8 meeting in Canada in June.
"G8 cannot provide immediate backing for Africa fund," FT, 15 February 2002; "Nepad not just about money - G8," IAFRICA.COM, 15 February 2002; "US trade chief pledges 8.7 mln dollars for southern Africa," AFP, 17 February 2002; "US Offical courts African allies for brewing biotech-food fight," WALL STREET JOURNAL, 20 February 2002; "Tanzania qualifies for US-Africa trade pact," AGENCE FRANCE-PRESSE, 12 February 2002.