[Africa] remove subsidies to fight poverty

From Reuters

By Manoah Esipisu

PRETORIA (Reuters) - Africans want the United States and Europe to draw up a time-table to end farm subsidies before global trade talks in December to prove their commitment to helping the continent fight poverty, analysts and officials say.

The Group of Eight industrialized countries (G8) have publicly committed themselves to increasing aid, cutting debt, encouraging foreign direct investment and funding campaigns against HIV and AIDS, malaria and tuberculosis.

Opening up their markets and removing subsidies to farmers, which undercuts Africans, is the real key and would sharply change the continent's fortunes, said Lesotho Trade Minister Mpho Malie, an influential voice in global trade issues.

"It is time to showcase Western commitment to fighting poverty in Africa and trade is the key," Malie told Reuters.

Many Africans are pressing for a united front at the December talks in Hong Kong, worried that failure there would hurt the continent.

The 148 members of the World Trade Organization must approve a blueprint for a new trade pact that could boost the world economy and help reduce poverty.

"WTO cannot afford another failure. It will be quite a severe blow to the multilateral trading system," said Karin Gregow of Kenyan non-governmental organization EcoNews.

South Africa's deputy trade minister, Rob Davies, said failure to reach agreement could see key players like the "United States slip back into the era of farm protectionism and a flurry of bilateral free-trade deals would flourish."

COMMON POSITION

"African members of the WTO must have a common position," said Seriba Ouattara, director general of commerce at the Trade Ministry in Burkina Faso, Africa's largest cotton producer. "Since June we have had that and we are now refining it."

Unlike at the previous ministerial meeting in Cancun, Mexico, in 2003, when disagreements brought the round to the brink of collapse, there is a preparedness among the rich nations to negotiate, he said.

"Europe and the U.S. have not committed to a concrete position. They have talked a lot, but each says the other must do something about its own trade policies. But, unlike at Cancun, the spirit of discussion is open. They are ready to talk."

British charity Oxfam estimates U.S. cotton subsidies cost Burkina Faso, one of the world's poorest nations, 12 percent of its potential cotton export earnings.

"Export subsidies are unfair," said Oxfam's Daniel Blais in the capital Ouagadougou. "The U.S. can sell its own cotton on the world market about 300 per cent below the cost of production because of subsidies.

"With so much cotton on the market, the world price falls, affecting farmers all over the world."

Africans and non-governmental organisations involved in trade issues question the drive for Africa to open its markets when the West is not making any concessions on farm issues.

"Rich countries ... are asking developing countries to pay for that with drastic liberalization of services sector and manufacturing. I think developing countries should be careful not to agree to drastic liberalization," said EcoNews's Gregow.