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Africa in brief

WTO rules against cotton subsidies

Brazil has won a case at the World Trade Organization (WTO) challenging subsidies paid out to cotton farmers in the US. If upheld on appeal, the decision may force the US to amend its farm payment policies. It could also prompt more challenges from other developing countries, which argue that the $300 bn in farm subsidies provided annually in developed countries promote excess production, depress world markets and give an unfair advantage to farmers in wealthy nations. Under the terms of the WTO's 1995 Agreement on Agriculture, countries were allowed, for a period, to continue agricultural supports provided they capped subsidies at their 1992 levels. Brazil argued that the US breached its 1992 cap and that as a result Brazil lost $600 mn in potential revenue in the 2001/02 season.

US cotton subsidies also were singled out at the WTO ministerial meeting in Cancún, Mexico, in September 2003, when several West African cotton-exporting countries called for their repeal. The dispute is one of several points threatening to derail the current Doha round of negotiations, scheduled to be concluded by 2005.

Botswana tops Africa business survey

Good governance and a business-friendly macroeconomic climate made Botswana number one in the World Economic Forum's annual Africa Growth Competitiveness Index this year, as the country most likely to enjoy sustained economic growth. To arrive at the ratings, the index combines assessments of a country's public institutions, macroeconomic record and technological sophistication with an opinion survey of some 2,000 African business executives. It was released at the Forum's Africa Economic Summit in Maputo, Mozambique, in early June.

Finland, the US and Sweden led the global ratings, with Botswana ranked 36 of the 102 countries surveyed. The Swiss-based Forum's chief economist, Mr. Augusto Lopez-Claros, said the purpose of the index was to identify obstacles to growth and help governments, the private sector and donors make Africa a more attractive "business address" for investors. "African countries do not on the whole perform well in the study," he noted.

 

Africa competitiveness index ranking
	Africa	World
Botswana	1	36
Tunisia	2	38
South Africa	3	42
Mauritius	4	46
Namibia	5	52
Gambia	6	55
Egypt	7	58
Morocco	8	61
Tanzania	9	69
Ghana	10	71
Source: World Economic Forum.

South-South trade talks launched

Leaders of developing nations, meeting at the UN Conference on Trade and Development (UNCTAD) in Brazil in June, launched new negotiations aimed at stimulating South-South trade. The talks are within the framework of the Global System of Trade Preferences, which currently involves 44 developing countries, 14 of them African. At the June 13-18 conference in São Paulo, the 44 countries urged other developing nations to join the talks, which are aimed at reducing tariffs among participants. China said it would seriously consider the invitation.

The World Trade Organization reports that trade among developing countries doubled during the 1990s, accounting for 12 per cent of world trade. Yet developing countries still face high trade barriers when exporting to each other.

Ugandan President Yoweri Museveni challenged larger developing countries to open their markets to poorer ones. He noted that while China charges no tariffs on raw coffee, it slaps 53 per cent duties on the processed product. "Africa has been standing with China for a long time and China was standing with us," he said. However, "the issue of trade . . . has not been addressed."

Group of Eight takes up Africa initiatives Following up on the last two summits of the Group of Eight industrialized countries, this year's G-8 meeting in the US also put Africa prominently on the agenda. Six African heads of state -- from Algeria, Ghana, Nigeria, Senegal, South Africa and Uganda -- were invited to the 9-10 June meeting in Sea Island, Georgia, where they again promoted the need for more support for the New Partnership for Africa's Development (NEPAD). The G-8 leaders agreed to several new initiatives on Africa: -- An action plan to train an additional 75,000 peacekeeping troops over the next five years. The plan's focus will be on Africa, extending a commitment made last year to help the African Union create a standby peacekeeping force. -- A "global HIV vaccine enterprise" to stimulate research into the development of a vaccine against the virus which causes AIDS. -- An initiative to "end the cycle of famine in the Horn of Africa," which will include measures to attain food security for 5 million more Ethiopians by 2009 and to raise agricultural productivity in the region. -- A commitment to ensure full funding for the World Health Organization's polio eradication campaign. -- An agreement to extend to 2006 the Heavily Indebted Poor Countries (HIPC) initiative, which was originally set to expire at the end of 2004. According to official estimates, HIPC so far has brought $31 bn in debt reduction to 27 countries, 23 of them in Africa. UN Secretary-General Kofi Annan, in a letter to the G-8 leaders, urged them to make poverty reduction and other Millennium Development Goals (MDGs) more central in their assistance to developing countries. He cited estimates that global aid would need to rise to at least $100 bn, from the 2003 level of $68 bn, in order to reach the MDG targets by 2015. To raise additional funds for fighting poverty, French President Jacques Chirac proposed an international tax, but he did not receive sufficient support from other G-8 leaders. South African President Thabo Mbeki called on the G-8 countries to end their trade-protectionist measures so that African countries can have "equitable access to world markets." The G-8 members declared that they are "determined" to resume the international trade negotiations that broke down in September 2003.

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