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Promoting South-South Civil Society Cooperation

Issue No. 11, 2006
A quarterly E-Newsletter
Published by CUTS-Africa Resource Centre, Lusaka, Zambia

CONTENTS

• EDITOR’S NOTE
  • EPAs Stake for Zambia
    
• ACTIVITY REPORT
• National Technical Workshop on EPAs
  
• NEWS BRIEFS
  • New Proposal on Cotton
  • Sudan Relaxes Rules on Kenya’s Exports
  • ‘Aid for Trade’ Challenges Ahead
  • Britain to Boost South Africa’s Capacity to Trade
  • US Propose Five Percent Cut on Farm Subsidies
    
• EVENTS AND ANNOUNCEMENTS
• TDP National Dialogue
  
• PUBLICATIONS
• Newsletter - Tradequity
  

EDITOR’S NOTE

EPAs Stake for Zambia
The ongoing Economic Partnership Agreement (EPA) negotiations between the European Union (EU) and the African, Caribbean and Pacific (ACP) countries have the possibility for reforming the trade preference between EU and ACP from a non-reciprocal to a reciprocal one.

Zambia, like many countries in the region is negotiating within the Eastern and Southern Africa (ESA) configuration, which is an alliance of 16 odd countries. At the national level, Zambia has a number of constraints ahead of EPAs, namely, the absence of a complete impact assessment study. Such a study would draw out the negative and positive impacts of EPAs, which is a big concern for stakeholders. In addition, Zambia is faced with supply-side constraints such as high cost of doing business due to inadequate infrastructure, land locked location, compliance with quality standards and low capacity to adapt to changes in world demand.

Further, Zambia is in a dilemma due to its dual membership of Common Market for Eastern and Southern Africa (COMESA) and Southern Africa Development Community (SADC). This is a challenge to the EU drive on trading partners to form customs union as the basis for EPAs in order to have one Common External Tariff (CET), which will, in turn, make it easier for European investors to invest in the region.

Editor

ACTIVITY REPORT

Technical Workshop on EPAs
CUTS Africa Resource Centre (CUTS ARC), Lusaka and Civil Society Trade Network of Zambia (CSTNZ), jointly organised a technical workshop on EPAs, at Lusaka, Zambia, on March 16, 2006. The workshop was held under the project entitled: ‘Capacity Building of Eastern and Southern African Civil Society during the EPA negotiations’, being implemented by CUTS London Resource Centre (CUTS LRC) in six countries.

The project has the following objectives:

• to contribute to the achievement of a development-friendly gender-sensitised outcome of the EPA negotiations, especially for Zambia and other ESA group of countries;
• to build the capacity of non-state actors (NSAs) to engage with the EPA negotiations; and
• directly contribute to the efforts to attain Millennium Development Goals (MDGs), i.e MDG 1: eradicate extreme hunger and poverty, and MDG 8: develop a global partnership for development.

In this context, the technical workshop aimed at consulting experts and stakeholder organisations on existing EPA impact assessments and the implications for civil society, marginalised and vulnerable.

(For details of the workshop, please visit: http://www.cuts-epa.org)

NEWS BRIEFS

New Proposal on Cotton

Benin, Burkina Faso, Chad, and Mali submitted a new proposal (TN/AG/GEN/12) calling cotton subsidies to be cut more deeply and more rapidly than domestic support to other products. The four proponents of the World Trade Organisation (WTO) work programme on cotton called for the reduction in trade-distorting domestic support to be three times higher than the cut agreed for domestic support in general, and the implementation period to be one third as long. This would be accomplished by linking the general reduction formula to a coefficient 'c' when calculating cut to cotton subsidies.

How cotton subsidies might be cut by three times more than overall domestic support is unclear, since for the proposals on the table, this would entail reductions of the order of 150 to 210 percent. However, sources suggest that the four countries are likely to spell out how this coefficient 'c' would translate into a higher level than that for other products very soon. Major cotton subsidising countries such as the US reportedly did not comment upon the proposal.

(Source: Bridges Weekly Vol. 10, No 6, 22.02.06)

Sudan Relaxes Rules on Kenya’s Exports
Under the COMESA rules of origin (RoO), member states aiming to export duty-free products into the COMESA Free Trade Area (FTA) must qualify for the acceptable 35 percent value addition for manufactured goods. In December 2005, Sudan commissioned a verification team to ascertain the latter’s compliance with COMESA RoO. This mission was jointly hosted by Kenya Association of Manufacturers (KAM), Ministry of Trade and Industry (MTI), and Kenya Revenue Authority (KRA).

KAM announced that certain products were allowed to access the Sudanese market following approval by a verification mission. Products identified for immediate preferential tariff treatment include copper electrical and telephone cables, MMC powders and cubes, rubber, paper, glass and pure pineapple products, mango juices and human and veterinary medicines.

(Source: The Standard Online 20.03.06)

‘Aid for Trade’ Challenges Ahead
Aid for Trade (AfT) in the broadest sense is intended to address capacity constraints by Least Developed Countries (LDCs) to take advantage of Multilateral Trade Agreements (MTAs) such as the WTO Agreements.

On March 20, 2006, the WTO AfT Task Force in its second meeting discussed recommendations on the ways such assistance could contribute to the development dimension of the Doha Round. The Task Force is composed of representatives from thirteen Member countries and is chaired by Ambassador Mia Horn Af Rantzien, Sweden. It is scheduled to report to the General Council in July 2006. The gathering was primarily a brainstorming exercise on what an AfT mechanism acceptable to both recipient and donor countries might look like. The discussions focused on the need to agree on the scope of such a package, as well as its financing, implementation, and monitoring.

(Source: Commonwealth secretariat press release, 21.03.06)

Britain to Boost Southern Africa’s Capacity to Trade
In 2005, the Commission for Africa (CfA) identified regional economic communities as the building blocks of the continent's development. Some of the problems identified were the low levels of foreign investment in Africa and the numerous differences in regulatory regimes. It has been identified that large-scale investment in infrastructure is a key to driving economic growth in Africa and an estimated US$10bn a year is needed for its facilitation.

Britain has come forward to provide aid to Africa by investing US$218.210 (£120mn) in Southern Africa to try to accelerate the region's economic integration and unlock its potential for trade and growth. The Department for International Development (DFID) has proposed an expenditure of US$36.3 (£20mn) for 2006 and US$181.841 (£100mn) for the next five years, chiefly in South Africa. It believes this will indirectly benefit South Africa's neighbours.

Among the department's investment aims over the next four years are to increase South African supermarkets' regional sourcing by 30 percent; increase horticultural exports by five percent; reduce the waiting time at border posts by 30 percent; reduce transport costs for landlocked countries by 25 percent; cover 10 percent of the costs of reducing predictable hunger; reduce the malaria-related mortality rate by 50 percent; curb the HIV infection rate; and increase TB detection and treatment by 50 percent.

(Source: Tromp, Beauregard; www.iol.co.za)

US Proposes Five Percent Cut on Farm Subsidies
A new proposal from the US aims to cut by five percent commodity subsidies to US farmers in the fiscal year beginning October 01, 2006. It also proposes to lower the cap to US$250,000 on the amount a farmer could receive in a year from price and income-support payments. The current cap is US$360,000 a year.

Farm subsidies are one of the toughest issues in long-stalled WTO negotiations. In the fiscal year 2007 budget request, sent to Congress on February 06, 2006, Bush requested to boost spending on food aid to poor countries to US$1.3bn from the US$1.2bn requested for 2006. The new US proposals are similar to those proposed by the administration in 2005, which Congress did not enact. The proposal would increase "Title II" funding for emergency food aid targeted to the world's most food insecure countries.

(Source: http:www.allafrica.com. 07.02.06)

EVENTS AND ANNOUNCEMENTS

TDP National Dialogue
CUTS ARC and the Organisation Development and Community Management Trust (ODCMT) will hold a 2nd National Dialogue, at Lusaka, Zambia, on July 12, 2006. This will be held under the ongoing project entitled: ‘Linkages between Trade, Development and Poverty Reduction’ (TDP), being implemented by CUTS, in collaboration with partners in 14 countries. The dialogue will discuss case studies on two sectors: agro processing and textiles, which were undertaken in the last quarter of 2005.

(For more details, contact: cutsarc@zamnet.zm)

PUBLICATIONS

Newsletter

• Tradequity(January-March 2006)
  The latest issue focuses on AfT. AfT is an important component to the economies of the LDCs. It is being perceived that without technical support and aid, LDCs will not be able to cope with emerging challenges of global trade and globalisation in general.
  
  The first formal appearance of AfT as a WTO negotiating item was in the WTO agreement in July 2004 (WT/L/579) which stated that developing countries would be entitled to ask for assistance to implement the new element of the current round, ‘trade facilitation’– the simplification and harmonisation of trade procedures (including customs and procedures of transport). AfT was also explicitly mentioned in the final texts approved at the WTO Hong Kong Ministerial held in December 2005.
  

  For more details contact:
  lusaka@cuts.org and cutsarc@zamnet.zm

Contact Us:

Africa Resource Centre
Suite 4.11, Main Post Office Building,
Cairo Road, P.O. Box 37113, Lusaka, Zambia
Ph: (00) 260-1-224992
Email: cutsarc@zamnet.zm
lusaka@cuts.org

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