Nipate
Forum => Kenya Discussion => Topic started by: MOON Ki on December 19, 2015, 02:01:19 AM
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"Borrowed" from Jukwaa: http://jukwaa.proboards.com/thread/9442/open-notes-mohamed-africa-rising?page=1&scrollTo=133967
This was bound to end in tears for Africa, and here they come:
http://www.nation.co.ke/oped/Editorial/World-Trade-meeting-merely-reinforced-biases/-/440804/3002168/-/11e0981z/-/index.html
Collectively, the meeting has not achieved much.
The rest of the editorial confirms that those who don’t pay attention end up weeping, and it then confirms that there is still not attention. We’ll get to that shortly.
A fundamental problem is that the African countries:
(1) rushed to bang their heads on a wall this is not about to go down,
(2) where there was an opening in another wall, they did not care to go through it.
The 10th Ministerial Conference, otherwise known as MC10, was billed to signal a trade breakthrough for developing nations, given that it was strategically hosted in Nairobi, but the deliberations have barely pointed in that direction.
Much of that “billing” was by Mohamed and Kenyatta (leaders) and a few followers who take the AU approach (most recently witnessed) at the ICC-ASP, i.e. “all we have to do is make a lot of noise”. That approach doesn’t work on things that others consider really important to their interests.
Let’s start with (2) above: hole in the wall
The unhappy editorial informs us that:
One of the key items on the agenda was the signing of the trade facilitation agreement that would allow Africa and other developing nations to access markets in Europe and the United States.
On paper, this would be a boost to the developing world, but, in reality, it is not. Most exports from Africa are largely agricultural and raw.
They hardly fetch good prices on the international market
That is confused in several aspects, but before we get into that, here’s another heated one from yesterday:
It is hoped that the Trade Facilitation Agreement (TFA) will be ratified in Nairobi.
This is a special agreement for Africa, particularly considering the low intra-Africa trade volumes. To improve their profiles at the multi-lateral level, African countries must increase their trade with one another, and one of the ways to do so is to have the TFA ratified in Nairobi.
A herculean task this might be, but it would revolutionise intra-Africa trade as it addresses the perennial impediments to trade, including border measures, customs procedures, non-tariff measures, simplification of trade procedures and documentation, physical infrastructure, and security concerns.
http://www.nation.co.ke/oped/Opinion/Africa-should-define-its-world-trade-agenda/-/440808/3000364/-/kdw8e2/-/index.html
The entire article is confused on several points---not in the above quoted part--that we need not get into. As far as the quoted part goes, one question that immediately comes to mind is this: if intra-Africa trade is so important to Africans, why don’t they get on with it? Why do they need the WTO.
Never mind. Let us suppose that this agreement is indeed important to Africa. This, of course, contradicts the Unhappy Editorial’s claims on why Africa won’t benefit. But we can simultaneously consider both, on the basic premise that (i) if an agreement is important to people, they will (bar some strong exception) sign it, and (ii) people should not expect to benefit from agreements that they are not willing to sign.
So has signed up on this one? (Kenya signed up a few days before the conference to avoid embarrassment.) The list:
Myanmar, Norway, Viet Nam, Brunei, Zambia, Ukraine, Hong Kong China, Singapore, the United States, Mauritius, Malaysia, Japan, Australia, Botswana, Trinidad and Tobago, the Republic of Korea, Nicaragua, Niger, Belize, Switzerland, Chinese Taipei, China, Liechtenstein, Lao PDR, New Zealand, Togo, Thailand, the European Union (on behalf of its 28 member states), the former Yugoslav Republic of Macedonia, Pakistan, Panama, Guyana, Côte d’Ivoire, Grenada, Saint Lucia and Kenya.
We may now review (i) and (ii) for an idea of who will be wailing about "the rich are cutting us out!".
Turning to (1) above: head against the wall
The first thing that must be noted is that the matter of agricultural subsidies is not just the matter of rich-vs.-poor countries that some make it out to be; India, for example, is big on such subsidies. I have specifically “picked on” India because last night at the very same time that Kenyan media---for unknown reasons---was peddling hopes for a “last minute solution”, the Indian media was gleefully noting that its representative was not budging
Hardening its stance in the ongoing WTO talks, India on Thursday strongly objected to the draft text on agriculture and said some countries are pushing for a deal on phasing out export subsidies with “some undue haste”.
http://morungexpress.com/india-hardens-stance-in-wto-objects-to-agri-draft/
India claims that its subsidies are to help it stockpile for food security, but that it is also working on a “paradigm shift”:
The government is working on a “paradigm shift” in the country’s agricultural subsidy regime — now mainly centered on minimum support prices (MSP) and provision of fertiliser, water and other inputs at below cost — to make them WTO-compatible without any reduction in the overall quantum of assistance to farmers.
http://indianexpress.com/article/india/india-others/govt-works-to-finetune-farm-subsidy-as-per-wto/
The second point is by way of a question: What exactly do the Africans have to export or wish to export to rich countries?
A couple of days ago, I had dinner with a friends who’s really worked up on this “agricultural unfairness”. I gave him a serviette and asked him to list 10 agricultural products that Africans badly want to, or need to, export to rich countries. Subject to two exclusions: (i) tea, coffee, cocoa are out, for the simple reason that people already brag about their exports in such areas; (ii) no “we want lower tariffs on raw products than on value-added products”, because that’s simply absurd. I’ll leave that one there for now …
What about the people whose lists and opinions really matter?
A few years ago, the USA---primarily for domestic budgetary reasons, but also to appease the WTO---made some non-trivial cuts in its farm subsidies. The US Trade Representative was asked if this would make an impact in Africa (and perhaps even lead to the phasing-out of AGOA.) His answer, in a nutshell: “I don’t see how. Most African farmers are small-scale farmers, in places with crappy infrastructure, places that badly need food, places with poor systems for export procedures, …. Etc. How on earth are all those one-hectare guys, in such circumstances, going to play in a global arena?” (Being a diplomat, he did not point out that there is a lot of hunger on the Beloved Continent.) The rep also had a question/answer that went something like this: "AGOA is about cutting tariffs, so let's put it aside. Suppose the USA reduced all its farm subsidies to zero, what impact would that have on Africa?". That question too I put to my dinner companion, and it too I will leave there for now ... but I welcome answers!
Make of all that what you will, but consider this:
- Over the last 50 years, Africa has gone from being a net exporter of food to being a net importer.
- Over the same period, per-capita food production in the rest of the world has gone up by something like 20%, whereas in Africa it has gone down by about 10% .
- In terms of value, Africans import about twice as much as they export, and much of what they import consists of basic foodstuffs.
- Estimates that in order to be able to feed itself in 2030, Africa needs to increase food production by about 50% .
And here’s the “funny” bit:
- Africa has something like 60% of the world’s uncultivated arable land.
The 2015 Global Food Security Index is out. Take a look at who’s shouting the loudest about exporting food to places that don’t need it and then compare with the list of those at the bottom of the index. 1+1=?
So, then. This head on the wall … It was always quite clear---to those paying attention---that there would be no movement on these matters. Let’s take the USA, for example. Forget what Mr. Froman, the US Trade Representative, says to clueless Kenyan (or other media) and look at what he says to his employers. A few months ago, during TPP negotiations, Mr. Froman was summoned for a Congressional hearing. It went something like this: US exports were doing quite well, except in agriculture. Did Mr. Froman appreciate this? Yes, he did, and he would do something about it. Agriculture was especially sensitive to funny trade deals. Did Mr. Froman appreciate this? Yes, he was very mindful of that and would do right by the USA. Etc. Etc. Et.
If anyone missed that, the “signs” were evident much earlier in the year, when Mr. Punke---yes, that’s really his name---the USA ambassador to the WTO stated that there is no way in hell that the USA will give blood in return for water or air. (The “in hell” part being in diplomatese.):
Meanwhile, those Members have stated clearly their expectation that this mind-boggling imbalance, which would clearly fall short of any true effort to reform trade-distorting agricultural subsidies, should be preserved. Using the lexicon of the WTO, we view that as blood for water, or blood for air, which is simply not an outcome that we could endorse.
https://ustr.gov/about-us/policy-offices/press-office/speechestranscripts/2015/february/statement-michael-punke-us
That seems quite rough, even in diplomatese, but I think that sometimes there is some advantage to the Americans' let’s-go-get-‘em, hamburgers-at-the-frontier style. Subtlety sometimes leads to misunderstandings. Immediate & pertinent example: A couple of days ago, at his WTO thing, the EU stated that on the matter of cuts in agricultural subsidies, it re-affirmed its strong commitment from 10 years ago. For its part, the USA stated that …. Actually having given vague “anything is possible”s before, Mr. Froman didn’t have anything to add to the EU re-affirmation, although he did put forth such fuzz as was required for the occasion. The Kenyan media then declared that: “USA, EU SOFTEN STANCE ON AGRICULTURAL SUBSIDIES!”.
http://www.nation.co.ke/business/US--EU-support-the-scrapping-of-farm-subsidies-in-rich-countries/-/996/2999380/-/ai0e3iz/-/index.html
The Unhappy Editorial also tells us that:
More substantively, the conference re-ignited old rivalries between the global North and South. For one, the US and the European Union introduced what they packaged as “new issues”, which essentially sought to insulate their multinationals from national trade regulations and policies, and hence pry open Africa’s market to the detriment of local firms.
There is some truth about the prying-open of markets, but isn’t that one of the major things that these representatives are supposed to do? I would be very concerned if the representative of the country in which I live wasn’t to pry open markets for our products, so that we could eat and live better. Fairness to other countries is not a bad idea, but, surely, they have their own (well-paid) representatives. [If at this point you, reader, are shaking your fist at the screen and yelling about cynical, insensitive, unfair bastrads or whatever, then, like the African representatives, you’ve missed the point: global trade negotiations are not about Live-Aid and whomever’s let’s-make-the-world-a-happier place. And this, Ms. Mohamed, is why “they are targeting us poor African!” might get some slack at the ICC-ASP, but it won’t fly here.]
Anyways ….
We need not get into what “old rivalry” that the editorial claims was re-ignited; there is a lot of rivalry about, but I doubt that many rich countries see poor ones as rivals. (The trade representatives etc. of various countries have their public websites, so that their people get to know what they are up to. One can look at these and get an idea of which countries the consider real rivals.)
The real problem with the quoted paragraph is that it’s an unhelpful twisting of the real story, which is this: It has been noted---and not just by international trade representatives---that the Doha-Round/Development-Agenda has been a long talkfest that’s been going nowhere for a long time. 15 years. Logic 101, 1st Lecture: if you aren’t getting anywhere, why not look at something new? So some countries have stated that they will continue talking about the same tired shite if there is something new as well, Logic 101 (Lecture 2): if you are going to look at new issues, shouldn’t there be some new issues? So some have been suggested.
And there has been the most illogical, emotional, panicked .. . whatever response. Kenya’s Daily Nation leading (or misleading):
Africa at risk as rich nations plot new deal!
http://www.nation.co.ke/news/Africa-at-risk-as-rich-nations-plot-new-deal/-/1056/3001052/-/hnriq0/-/index.html
And what risk would that be? According to this theory, merely putting things on the agenda, for future talks, means that there is a risk that they might be adopted, if and when they are talked about. Never mind the bit about "consensus" on a whole bunch of things and the fact that current agenda has been going nowhere for years! From the mere idea that new things should be on the agenda, some people are already calculating how much they will lose from tax evasion!
But here’s the real point that the Africans representatives and their supporters have missed: those “new-issue” countries will simply do what they have been doing while others make noise at the WTO Talkfests, which is to work out deals amongst themselves. The USA and others have just concluded a Trans-Pacific deal; now in the works is a Trans-Atlantic deal. The Asians too are working on their own deals. Guess who will be left crying about being marginalized.