news analysis advocacy
tips on searching

Search AfricaFocus and 9 Partner Sites



Visit the AfricaFocus
Country Pages

Burkina Faso
Cape Verde
Central Afr. Rep.
Congo (Brazzaville)
Congo (Kinshasa)
Côte d'Ivoire
Equatorial Guinea
São Tomé
Sierra Leone
South Africa
South Sudan
Western Sahara

Get AfricaFocus Bulletin by e-mail!

Print this page

Note: This document is from the archive of the Africa Policy E-Journal, published by the Africa Policy Information Center (APIC) from 1995 to 2001 and by Africa Action from 2001 to 2003. APIC was merged into Africa Action in 2001. Please note that many outdated links in this archived document may not work.

US/Africa: Trade Wars, 1

Africa Policy E-Journal
June 29, 2003 (030629)

US/Africa: Trade Wars, 1
(Reposted from sources cited below)

As President Bush prepares for his trip to Africa from July 7-11, trade is high on the agenda. The official speeches during the trip are sure to tout the mutual benefits of trade, as host countries hope to gain additional access to U.S. markets. At the same time, however, U.S. and African agendas are diametrically opposed on a most issues being considered by the World Trade Organization which will hold its summit in Cancun, Mexico in September. The trade summit is held every two years, with Cancun following four years after Seattle's protests and two years after the meeting in Doha that was labelled as beginning a "development round" of trade talks.

Since Doha, in fact, the rich countries have fought a stubborn and so-far successful battle to block advances on priorities laid out by African and other developing countries, with the U.S. taking the hardest anti-African and anti-development line. The details of these debates are so buried in technical language and diplomatic understatements that it is difficult to discern the issues at stake, or the scale of the disagreements. Nevertheless, the consequences, in areas ranging from agricultural subsidies to the availability of generic AIDS drugs, are matters of life and death. The casualties easily compare with those from more visible armed conflicts. Clear statements such as the one below by Mali President Amadou Toumani Toure, laying out the damage done to West African cotton producers by international trade rules and calling for compensation to be paid, deserve far wider attention.

This set of two e-journal postings focuses on key trade issues, by highlighting recent African statements as well as analyses from the Third World Network, a group that closely monitors global negotiations on these issues. In order to cover a range of issues, the e-mail version of these postings contains brief excerpts only (as non-technical as possible) from a variety of documents. More details can be found in the archived version of the postings (goto>) or in links to other websites.

These issues will also be among the topics covered at a July 2 Briefing for White House Press Corps and other media "Heart of Darkness: The Truth about Africa Policy under the Bush Administration" []

For recent speeches and documents highlighting official perspectives on expanding trade, see the website for the African Growth and Opportunity Act at as well as the section on AGOA

The latest U.S. African Trade Profile, released in March, shows U.S./African trade for 2002 down 15% over the previous year, with both exports and imports declining

+++++++++++++++++end summary/introduction+++++++++++++++++++++++

(1) Double Standard on Subsidies - President Amadou Toumani Toure

While rich countries and international financial institutions press for minimizing "market-distorting" government subsidies in African countries, often at enormous human cost, the most massive interference with international agricultural markets comes from European and U.S. subsidies to rich farmers. This issue has gained new attention in recent years, as the World Bank has critiqued rich country governments and Europe and the U.S. have pointed their fingers at each other's offenses. But there has been little progress in changing this double standard.

West African cotton-producing countries have now filed a formal complaint with the World Trade Organization for damages to their cotton industries. In a statement submitted to the House Inernational Relations Subcommittee on Africa last week, Mali President Amadou Toumani Toure noted the damage done to African agriculture around the continent by $300 billion of U.S. and European subsidies. "We have decided to pull the alarm bell," he said.

For additional background see:

Cultivating Poverty. The Impact of US Cotton Subsidies on Africa>

Additional statements from the hearing, from Subcommittee Chair Edward Royce and ranking Democrat Subcommittee member Donard Payne, are available on the committee's website at

Mali President Says Agricultural Subsidies Undercut Development

House International Relations Committee. Africa Subcommittee

June 25, 2003

U.S. and European agricultural subsidies have undercut the ability of developing countries to export their products, weakened the commodity prices on world markets, and severely undermined African economies, Malian President Amadou Toumani Toure told members of Congress June 24.

In written testimony presented to the House International Relations Subcommittee on Africa, Toure said these subsidies paid by developed countries to their farmers have been the major reason, for example, for a "drastic" fall in world cotton prices. The consequences of the subsides for developing countries have been significant, he reported: Mali's GDP dropped 1.7 percent and export receipts fell 8 percent in 2001; Burkina Faso lost 1 percent of GDP and 12 percent of export receipts; and Benin lost 1.4 percent of GDP and 9 percent of export receipts.

Toure cited cotton as an example of low prices created by subsidies in developed nations having caused poverty, which he warned, "leads to rural depopulation," unrest and terrorism.

"The paradox in the situation is that African producers can no longer live on their cotton," he told the lawmakers, "which still remains the most competitive product in the world."

Illustrating his point, Toure said "when the price of cotton was 35 cents a pound, in late 2002, the production cost was, on average, 47 cents a pound in Western and Central Africa against 73 cents a pound in the United States. Production costs in Europe (Greece and Spain) were even higher.

"African cotton-producing countries draw no profit from this comparative advantage because international trade rules, as defined by the World Trade Organization, are biased by the substantial subsidies granted to European, American and Chinese cotton producers," he said.

Those subsidies were estimated, in 2001, he said, at $700 million in Europe, $2.3 billion in the U.S. and $1.2 billion in China.

"Facing the growing deterioration of our economies and the threats on the survival of our cotton sector, we have decided to pull the alarm bell" and seek "an equitable solution in favor of African cotton producers," he said.

Toure said African leaders are "delighted" that the U.S. Congress has come to understand the problem and has begun holding hearings on the subject.

[The Malian President was referring to opening remarks by Ed Royce (Republican of California), who chairs the Subcommittee on Africa. Royce said that "no sector of the world economy ... is more laden with rules, tariffs, quotas, subsidies and other government interventions in the market than agriculture. While tariffs worldwide average roughly four percent on industrialized goods, the average on agricultural products is 62 percent." These tariffs effectively shut out many African products, deterring investment in African agriculture, he said. Farm subsidies, he said, "are another hurdle," encouraging overproduction, depressing world market prices and reducing the competitiveness of African agricultural products, both domestically and as an export."]

Following is the text of the Malian President's remarks, as prepared for delivery:

(begin text)

Written Statement by H.E. Mr. Amadou Toumani TOURE, President of the Republic of Mali, to the International Relations Committee, Sub-Committee on Africa, House of Representatives.

June 24th, 2003

I would like, first of all, to express, on behalf of the people and Government of Mali, most profound gratitude to the Congress and all its August Members, for the opportunity thus given to me to come and bear witness on the adverse consequences of agricultural subsidies on the cotton producers in Mali and all over the African continent.

I deem it a great honor for me to stand before you and talk to you on behalf of Mali and on behalf of my brother heads of Sates of Burkina Faso, Benin and Chad.

Mali and the United States share several common values. We both believe in an open and vibrant democracy; we believe in freedom of Speech and worship; we believe in human rights; we believe in market economy. Mali closely works with the United States in keeping peace and regional security, and remains a credible partner in the struggle against terror. We have come to the United States with the will to propose a sound partnership between our two countries, but not as beggars.

Over the past 12 years, we accomplished huge progress in Mali. We have established a strong tradition of democracy, held peaceful elections, promoted political decentralization, which led to the blossoming of the civil society, and undertaken in -depth economic reforms. The cornerstone of these reforms was the liberalization of our agricultural market starting with the cereal market. We have highly appreciated the assistance granted to us by the United States through the USAID, and the technical assistance from American universities when we initiated those reforms, including the competitive agricultural markets.

You will have a still clearer picture of our initiative, through some indicators on the importance and weight of agriculture in our economy. More than 70% of our fellow-citizens live in rural areas, and if the economy were to develop, it would surely do so through agriculture. Agriculture is the backbone of Mali's economy. As such, it stands for 42% of our country's GNP, and provides both the government and communal authorities with 75% of our exports receipts as well as a large portion of tax revenues.

That is why we are committed to make intensive agriculture the driving engine of Mali's development.

Agriculture provides us with more than food. It is the source of income for most of our 11 million fellow citizens. It creates other job and income generating activities in other sectors of the economy such as food industry and women's micro-enterprises. It supplies capital needed for investment in our rural areas, from enterprises to roads. It secures decentralized communities with incomes that enable them to pay for their schools and health centers. Unless agriculture prospers, Malian children will not learn how to read and write, families will be sick because of polluted waters, women's micro-enterprises will not be operational, and people will die from avoidable diseases. Our youth will be jobless, and feel frustrated and alienated.

To put it simply, a prosperous and profitable agriculture is absolutely essential to enable Mali pursue her democratic development in peace. That is why, my Government has placed agriculture and rural development at the core of our economic development strategy, and last year we increased our budget allocated to agricultural development by 30%.

In underscoring Mali's case, I wanted to concretely illustrate my talk. What you should retain from it is mainly the fact that I could have said the same thing talking about Burkina Faso, Benin and Chad: because the problem facing our cotton sectors is the same.

Therefore, it is on behalf of all these countries that I congratulate the Congress for this initiative, and I express our gratitude to the Foreign Affairs Committee, the Sub-Committee on Africa of the House of Representatives. Your initiative is a token of your great compassion towards the development of our countries. The assets to promote such development are, unfortunately, not too many. Among them, cotton often occupies a prevalent position. I have come here to talk to you precisely about the difficulties facing this cotton on world markets.

A few years ago, cotton was a source of wealth for us. Nowadays, it has turned into a burden, a factor of impoverishment. This trend mainly worsened over the last three years, marked with a drastic fall in world prices, which reached their lowest level, at 35 cents a pound in late 2002.

Although several factors concurred in this situation, agricultural subsidies are the main cause of this market deregulation, which has serious consequences on our economies.

As an example, in 2001 Mali lost 1.7% of her GDP and 8% of her export receipts; Burkina Faso lost 1% of her GDP and 12% of her export receipts; Benin lost 1.4% of her GDP and 9% of her export receipts.

Beside the macro economic impact of these losses in receipts caused by subsidies in developed countries, it is worthy to note the socio economic repercussions on the 15 million people out of which two million producers live directly on cotton. This situation generates poverty among African rural folks, and particularly in cotton producing areas. Poverty leads to rural depopulation. According to a survey conducted by the International Cotton Advisory Board, the withdrawal of US cotton subsidies shall increase Malian cotton farmers' income by more than 31%, from $500 to $659 a year, a huge amount in a country where very few people earn $1 a day. For the Malian economy as a whole, that will generate a gain of more than $55 million per year, a sum that is higher than the total value of the United States' assistance to my country.

The paradox in the situation is that African producers can no longer live on their cotton, which still remains the most competitive one in the world. As an illustration: when the price of cotton was 35 cents a pound, in late 2002, the production cost was, in average, 47 cents a pound in Western and Central Africa; against 73 cents a pound in the United States of America. Production costs in Europe (Greece and Spain) were even higher than in the USA.

African cotton producing countries draw no profit from this comparative advantage because international trade rules, as defined by the World Trade Organization, are biased by the substantial subsidies granted to European, American and Chinese cotton producers. Those subsidies were estimated, in 2001, to $700 million for Europe, $2.3 billion for the USA and $1.2 billion for China.

Facing the growing deterioration of our economies and the threats on the survival of our cotton sector, we have decided to pull the alarm bell, so that along with our partner countries we could come out with an equitable solution in favor of African cotton producers.

We are delighted to note that the US Congress has understood our message and decided to offer us such a forum. The request from Western and Central African cotton producing countries does not aim at any form of confrontation. It is a hand stretched out for dialogue and negotiation.

Each of the countries granting agricultural subsidies to their cotton producers has an important responsibility in our countries' development.

The Meaning of Our Sectoral Initiative on Cotton at the WTO

The recourse to WTO itself is an expression of our countries' trust and confidence in the system of world trade regulation and arbitration, in the inception of which the United States played a major role.

The sectoral initiative on cotton is based on principles stated in the new trade negotiations under the Doha cycle, which is aimed at establishing an equitable and fair trade system tallying with market rule.

A lasting settlement of the African cotton crisis shall be achieved through:

1 -- A recognition of the strategic importance of cotton in our development and in cutting poverty in our countries;

2 -- The total elimination of support measures to cotton production and export;

3 -- The setting up in Cancun, by the 5th WTO ministerial conference to be held from 10th to 14th September 2003, of a system to gradually reduce and eventually totally eliminate -- all cotton subsidies;

4 -- In appliance with the results of the Doha cycle, and until a total withdrawal of subsidies, compensations to be paid to the least advanced countries producing cotton in order to make up for the losses they incur.

Your debates here are of crucial importance to Mali and other African countries striving to tread the path of globalization, which, in their opinion, should lead to reducing poverty and famine. We are not requesting a special transaction; but we simply wish the globalization race field to be an arena where competitors shall have equal opportunities. We feel that, in working together, the international community as a whole will be able to make trade an instrument that can benefit all of us.

As we recommend the work initiated by your sub-committee, we are convinced that we can rely upon the support of the US Congress and Administration for the success of this initiative on cotton.

Thank you for your attention.

(end text)

(2) African Trade Ministers Declaration

Meeting in Mauritius June 19-20, 2003, trade ministers of the African Union re-affirmed African demands that the World Trade Organization address development issues that have been stalled, and rejected demands that the Cancun meeting in September move on to new issues requiring further market liberalization in such areas as investment and government services. As in Seattle and Doha, however, the pressure from the U.S. and Europe to divide African and other developing countries and push through new agreements will be enormous. [On Seattle and Doha, see, for example:> and>] Even in not in the official spotlight, these issues will be key behind the scenes on President Bush's Africa trip.

African Ministers Affirm Opposition to New Issues in Cancun
by Tetteh Hormeku, TWN-Africa
Grand Baie, Mauritius, 20 June, 2003

Third World Network Africa

See also statement from Civil Society Organizations present at the Mauritius meeting:

African Union ministers of trade, meeting in Mauritius, have re-affirmed the long-standing position of African countries that the forthcoming Cancun Ministerial Conference of the World Trade Organisation (WTO) should focus on addressing their developmental concerns in the existing agreements, instead of starting negotiations for new agreements, particularly on the so-called Singapore issues i.e. of investment, competition, government procurement and trade facilitation.

In a declaration adopted unanimously in Grand Baie, Mauritius, on Thursday June 19, the trade ministers noted that "WTO members do not have a common understanding on how [the Singapore issues] should be dealt with procedurally and substantively." And, "taking into account the potential serious implications of these issues on our economies", they called "for further clarification on these issues to continue."

At the same time, the Ministers focused attention on the missed deadlines in the current negotiations on issues such as agriculture, TRIPS and public health, special and differential treatment and implementation-related issues. Expressing concern at this evidence of general lack of progress on the issues of critical concern to their countries, they challenged the members of the WTO to "inject momentum into the negotiations on these issues in order to ensure that the Cancun WTO Ministerial yields positive results for African countries and makes the Doha Work Programme a truly 'Development Agenda'."

The declaration invoked the outcomes of earlier meetings involving African ministers such as the COMESA meeting in Nairobi, SADC in Lusaka, and the LDCs in Dhaka. It was adopted with little drama and no fuss, in an efficient display of unity of purpose and will. This was at the end of a day of deliberations in which a diverse range of speakers - Ministers, representatives of sister groupings like the ACP group of countries, as well as African civil society organisations -- all urged unity around a common African position as necessary to ensure that the core concerns of Africa prevailed in Geneva and Cancun, whatever pressures are brought to bear on these countries.

Apart from their position on the new issues, the Declaration contained specific positions in all the major areas of the on-going work in the WTO, including agriculture, services, industrial tariff, TRIPS, special and differential treatment, capacity building, and the lack of transparency and inclusiveness in WTO processes.

The Ministers stated that agriculture was of critical importance to Africa's development, with the potential to "lift millions of our people" out of poverty. They added that progress in the agricultural negotiations was essential for the successful conclusion of the Doha work- programme, and strongly urged members to fulfil their Doha commitments. Ministers also noted the need for African countries to continue to enjoy agricultural trade preferences, calling for action to address the erosion of these preferences. Finally, they called for LDCs to be exempt from any obligations to reduce tariffs.

In relation to services, the Declaration charged the Services Council (of the WTO) with failure to satisfy the requirement in the General Agreement in Trade in Services (GATS) to carry out an assessment of trade in services. Furthermore, in a clear reference to the pressures from developed countries to liberalise their service sector against their will, the Ministers called for due respect for their rights to regulate trade in services and liberalise according to their national policy objectives. At the same time they emphasised the respect to the principle of progressive liberalisation subject to the principle of flexibility, as well as the need to promote and facilitate the participation of African countries in international trade in services. Developed countries only should therefore liberalise their sectors and modes that are of export interest to African countries.

On the Doha mandate regarding measures to enable countries which lack manufacturing capacity to access medicine for public health, the Ministers re-stated their support for their compromise deal reached in December last year, and wrecked by the United States. This deal, they added, still remains a means for members to fulfil their obligations as required by the Doha declaration.

For industrial tariffs, the Ministers stated the objectives of the negotiations as being to facilitate the development and industrialisation of African countries. These must be reflected in the modalities and actual negotiations by addressing tariff peaks and escalations, and take fully into account the special needs and interests of developing and least-developed countries. This required, among others, fulfilment of the principles of special and differential treatment, as well as the principle that developing and least developed countries must not make full reciprocal commitments to reduce their tariffs.

The Declaration welcomed proposals to exempt LDCs from making fully reciprocal commitments, and the proposed studies on tariff liberalisation on LDCs. While cognisant of the special situation of LDCs, it calls for the studies to be extended to other African countries, and should take into account the effects of previous liberalisation measures undertaken by these countries as well as the potential impact of any proposed modalities for liberalisation. The Ministers also expressed deep concern that the proposed modalities for liberalisation do not take into account the vulnerabilities of African industries, especially in clothing, fisheries and textile sectors, as well concern of African countries over the erosion of their trade preferences. They called for appropriate modalities to address these concerns.

On special and differential treatment, the declaration re-iterated Africa's oft-stated demand that all S&D provisions in the WTO agreements be reviewed with a view to strengthen them and make them more precise, effective, binding and operational. As on implementation issues, Ministers called for urgent need to complete work in this regard, as a matter of priority before Cancun.

In another declaration on the Economic Partnership Agreements (EPAs), Ministers affirmed the importance of consistency between these negotiations and the aims and objectives as set out in the Constitutive Act of the African Union, with the various regional economic groups as the building blocs of African integration. The EPA declaration also emphasised the importance of the unity and solidarity of the ACP group as necessary for the EPA negotiations.

In clear reference to the pressures by the European Union to rush the process of negotiations and fragment the collective ACP strategy, the Declaration on the EPAs emphasised the "importance of phase I of the negotiations in which ACP groups as a whole negotiated the applicable principles, as a foundation and framework to phase II of the negotiations, during which groups of countries are expected to set out to negotiate free trade agreements with the EU. It also urged the ACP and EU to address all outstanding issues under the phase I negotiations.

Both declarations were adopted following focused deliberations on the measures needed by Africa to ensure that its interests prevailed in the face of stark balance sheet of the disappointed hopes of Doha. In his welcome address to the Ministers, Honourable J Cuttaree, Minister of Industry and International Trade of the Republic of Mauritius asked Ministers to draw their strength and decision of purpose from their unity in order for Africa's pressing concerns over the core issues of the Doha agenda to be recognised in Geneva and Cancun.

He reminded ministers that nineteen months after the hope and optimism evoked with the launch at Doha of trade negotiations under the "title of Development Round", the development agenda is stranded in missed deadlines. The negotiations have failed to yield "balanced outcomes in which the interests of all, particularly those who are in most need are truly attended".

Cuttaree stated that "had the WTO been effective in finding expeditious solutions to the problems of TRIPS and Public Health, we should have seen an improvement for millions of people in Africa who are suffering from deadly diseases".

Nor have African countries had any comfort "on their basic concerns in the areas of special and differential treatment, agriculture, and textiles.

He pointed to the double standards at play in the area of industrial tariffs. Here, proposals to drastically cut and eliminate tariffs, which African countries have already declared a recipe for disaster, are being pursued by countries that had themselves used this instrument in the early stage of their industrialisation process. "Having used the ladder for so long, it is not fair that they should kick the ladder off to the detriment of our countries".

In a similar vein, Ambassador Vijay Markham, Interim African Union Commissioner, cautioned that while trade is important Ministers need to beware of those who sing the praise and play the tune of unbridled trade liberalisation. He reminded them of the case of the former UK trade minister, Stephen Byers who, while in government promoted trade liberalisation as panacea to problems of development, only to confess once outside government, that his optimism had not been borne out in practice. Markham argued that a "conducive international trading environment is as important, if not more important, than efforts at national level to make trade an effective instrument for development". This requires action on the imbalances and inequities of the international trading system, such as the persistent deterioration in the terms of trade for primary commodities, tariff peaks and escalation, the asymmetry in the treatment of capital and labour in the area of services, as well agricultural subsidies in developed countries which are daily destroying the livelihood of African farmers.

Referring to the failures in the Doha agenda to address these problems, Markham said that this created a situation where "once again pressure will be brought to bear on us to compromise on our stand so that Cancun can be a success. This cannot and should not be allowed to happen."

On her part, Adelaide Mkhonza, Assistant Secretary-General of the African, Caribbean and Pacific (ACP) countries stated that the glimmer of hope contained in the Doha development agenda for ACP and other developing countries to rebalance the rules of the WTO has been undermined by a stalled process. The missed deadlines are set to over-load and stretch the agenda to the detriment of countries with limited resources. The African Union provided a foundation of collective action of African countries, together with other countries of the ACP group, for the necessary action to redress these imbalances.

African civil society organisations, who for the first time were allowed to meet under the auspices of the conference and to address the Ministers, underscored their support for the collective effort of the Ministers for international trade rules which reflected the needs and interests of the people of Africa.

In their statement, presented on their behalf by Jane Ocaya-Irama of Uganda, the civil society organisations called on the Ministers to focus on addressing the inequities of the existing agreements of the WTO, and reject any attempt to launch negotiations on the Singapore issues in Cancun. They made detailed recommendations for redress of imbalances in areas such agriculture, TRIPS, services, S&D.

In addition they drew attention to the undemocratic, and untransparent processes of the WTO, and called for the elimination of such abusive practices such as exclusive informal meeting, miniministerials, and such other untransparent devices as "friends of the chair". Aware of the pressures by developed countries to derail African countries from their concerns in the trade negotiations, they pledged to work with ministers as they strive for rules and agreements which will serve the interest of African women and men.

The very presence of civil society organisations formally at the gathering of Ministers and the fact that they addressed their concerns directly to the Ministers was a welcome precedence for AU. But while the civil society organisations lend support to the Ministers, it was clear that their demands were stronger, and went far beyond what the Ministers were able to adopt in their Declarations.

According to Thomas Deve of MWENGO from Zimbabwe, this gap between civil society demands and the Ministers' positions sets a mark for judging how far the Ministers will go in the coming months to hold up to their collective positions in the face of pressure. It also outlines the tasks ahead of civil society groups in Africa and beyond to ensure that Ministers live up to their commitments to Africa.

+++++++++++++++++++++Document Profile+++++++++++++++++++++

Date distributed (ymd): 030629
Region: Continent-Wide
Issue Areas: +economy/development+ +US policy focus+

The Africa Action E-Journal is a free information service provided by Africa Action, including both original commentary and reposted documents. Africa Action provides this information and analysis in order to promote U.S. and international policies toward Africa that advance economic, political and social justice and the full spectrum of human rights.

URL for this file: