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EXCERPTS FROM Chapter 12 – Subsidies Free Trade Tariffs etc
See: DeGeorges, P.A.& Reilly, B.K. 2008. A critical evaluation of
conservation and development in Sub-Saharan Africa. The Edwin Mellen
Press: Lewiston, New York, NY, USA. 3,572p.
12.0 SUBSIDIES, FREE-TRADE, STRUCTURAL ADJUSTMENT AND DEBT RELIEF IN
SUB-SAHARAN AFRICA - IMPACTS ON RESOURCE EXPLOITATION
12.2.4.1 Agricultural tariffs
The average import duties on farm products to the EU and America are
40-50% (Legum, 2002). According to the Commission for Africa (2005)
"Average applied tariffs in agriculture in the EU are 22%, and in the
U.S. 14%, some 3-4 times higher than in manufactured goods. There is
also substantial use of 'tariff peaks', or very high duties on
specific products. These affect over 40% of agriculture tariff lines
in the EU and Japan".
As an example, tariffs on peanuts coming into the U.S. are 132%
(Commission for Africa, 2005). The EU, paradoxically one of the
leading proponents of trade liberalization, has one of the most
protected agricultural sectors in the world through its Common
Agricultural Policy (CAP) (Sharma, 2002). For instance, canned fruit
going to the EU from South Africa has a tariff of 15-30%, while
tariffs as high as 30% are placed on apricots and other fruits going
to the U.S., weakening a fruit industry valued at Rand 1.5 billion
that is employing 27,000 people in South Africa (Moneyweb, 2005).
September 2003 WTO discussions in Cancun, Mexico, collapsed over
differences between the West and the developing world concerning
agricultural subsidies and protected uncompetitive markets, especially
by America and Europe, and at the beginning of 2008 show little or no
progress.
12.2.4.2 Agricultural subsidies
Annual subsidies amounting to US$ 300 billion to the Organization for
Economic Cooperation and Development (OECD) agriculture are equal to
Sub-Saharan Africa's GDP (World Bank, 2000). The United Nations
Economic Commission for Africa (ECA) (2003) and Hassett and Shapiro
(2003) estimated in 2001, that developed countries paid their farmers
subsidies amounting to US$ 311 billion, as much as Sub-Saharan
Africa's entire economic output (Hassett & Shapiro, 2003). Similarly,
it is estimated that the total value of agricultural subsidies in
developed countries (OECD) is almost US$ 1 billion/day. Annually,
this is more than the GDP of Sub-Saharan Africa (Legum, 2002; Sharma,
2002; Guest, 2004; Commission for Africa, 2005) which was US$ 303.5
billion in 2002 (UNDP, 2004) and US$ 279 billion/year by 2005/6 – over
three times the value of global aid to developing countries
(Offenheiser, 2006). As subsidies continue to rise, the Commission
for Africa (2005) estimates agricultural subsidies in developed
countries amounted to US$ 350 billion in 2003.
"Of this, US$ 257 billion was support to producers and US$ 52 billion
was support to R&D,1 training, marketing and promotion. Most support
to producers is provided through market barriers that keep prices
artificially high – some US$ 160 billion – as opposed to the US$ 97
billion paid directly to producers. The EU, U.S., and Japan account
for 90% of total OECD support, and the bulk of this support is for
milk, meats, grains and sugar. This support is 16 times OECD aid to
Africa (US$ 22 billion in 2002)" (Commission for Africa, 2005).
UNDP (2004) estimates Official Development Assistance (ODA) to
Sub-Saharan Africa was US$ 17.2 billion in 2002 (see Chapter 11, Table
11.4, Official 2002 development assistance (ODA = foreign aid) as a
percentage of all investment inflows to Sub-Saharan).
The OECD has a method of measuring market protection in a given member
state called "Producer Subsidy Equivalent/Producer Support Estimate
(PSE)". PSE is
"a broadly defined Aggregate Measure of Support (AMS) to agriculture
that combines into one total value aggregate, direct payments to
producers financed by budgetary outlays (such as deficiency payments),
budgetary outlays for certain other programs assumed to provide
benefits to agriculture (such as research and inspection and
environmental programs), and the estimated value of revenue transfers
from consumers to producers as a result of policies that distort
market prices" (USDA, 2003) or "the monetary value of transfers
(direct and indirect) from consumers and taxpayers to producers"
(OECD, 2005).
Expressed as a percentage, the %PSE provides an indication of how much
of a farmer's earnings are from government support/interference, this
percentage being paid either directly or indirectly by government
and/or by increased costs to the consumer (e.g., in a protected
market).
"The %PSE, accounted for 32% of farm receipts, a slight increase from
2002, but down from 37% in 1986-88. The PSE in 2003 is estimated at
$US 257 billion, or EUR 229 billion…Support to producers in 2001-03
was below 5% of farm receipts in Australia and New Zealand, 20% or
less in Canada, Mexico, Poland, Slovakia, Turkey and the United
States, around 25% in the Czech Republic and Hungary, 35% in the
European Union (EU), and 60% or more in Iceland, Japan, Korea, Norway
and Switzerland" (OECD, 2004).
Similarly, "The EU is the largest protector of agriculture in the
world. The EU also accounts for 90% of OECD export subsides in
agriculture. Gross support from consumers and taxpayers to farmers
constitutes only 2% of farm receipts in New Zealand, but around 20% in
the U.S. and Canada, 35% in the EU, and 58% in Japan. Japan spends
1.4% of GDP on agricultural support, the EU 1.3%, and the US 0.9%"
(Commission for Africa, 2005),
these costs being passed on to the consumer through higher food costs
and taxes.
Percent PSE for key commodities in 2003 for the OECD as a whole
include: wheat/37%, maize/21%, rice/74%, sugar/56%, milk/49%, beef and
veal/35%, sheep/42% and all commodities/32% (OECD, 2004).
In 2004, the Total Support Estimate (TSE), an OECD indicator of the
annual monetary value of all gross transfers from taxpayers and
consumers arising from policy measures to agriculture in OECD
countries, amounted to about US$ 378 billion (EURO 305 billion), the
United States accounting for about US$ 109 billion (29%), the European
Union (EU) for about US$ 151 billion (40%), and Japan for a little
less than US$ 61 billion (16%). Of the US$ 378 billion, about US$ 280
billion was paid by OECD countries in support (Producer Support
Estimate) to farmers (leaving out general services [about US$ 65.8
billion] and consumer subsidies [about US$ 32.6 billion]), the U.S.
transferring US$ 46.5 billion, the EU - US$ 133.4 billion and Japan -
US$ 48.7 billion. These three were responsible for 85% of the TSE and
82% of the PSE in OECD countries. The level of producer support in
the OECD as a whole, as measured by the %PSE, is estimated at 30% in
2004, the same level as in 2003 (OECD, 2005).
In general, subsidies, tariffs and quotas increase costs to OECD
consumers, keep prices artificially elevated and result in flooding of
world markets dropping global commodity prices. While the OECD is
supposed to be helping Sub-Saharan Africa develop economically and
improve its agricultural production through foreign aid and technical
assistance, it is simultaneously creating commodity shocks through its
policies (Commission for Africa, 2005).
Subsidies lower global prices by encouraging over-production, some of
which, in the case of food, is dumped on poor developing countries
(see Chapter 11, Section 11.8, FOOD AID). "'These subsidies are
crippling Africa's chance to export its way out of poverty,'" said
James Wolfensohn, the World Bank president (Kristof, 2002). These
issues have to be addressed in the World Trade Organization (WTO).
There is increasing concern that subsidies should be removed in
developed countries (UNECA, 2003).
In July 2004, there appears to have been a breakthrough in WTO
negotiations to reopen free-trade talks known as the DOHA2 development
round, which would eliminate export subsidies and reduce domestic
subsidies, improving agricultural trade. The U.S. will "fast track"
cotton subsidies (Schlein, 2004). According to Bello and Kwa (2004),
the African cotton producing countries failed to get the U.S. cotton
subsidies fast tracked or a commitment to have them eliminated.
According to SouthAfrica.info (2004), the July, 2004 WTO agreement
will result in the West opening its markets to African agricultural
products in return for Africa cutting duties on industrial goods.
"The EU, the United States and countries such as Japan and Switzerland
set greater access to markets for industrial goods in developing
countries as the price for farm subsidy cuts" (Waddington & Lannin,
2004).
Are we not back to square one; Africa continuing to export raw
products and import transformed ones? It also appears that the
reduction in export subsidies would not be before 2015-2017 (Global
South, 2004). A specific end-date to export subsidies will only be
achieved in the next round of negotiations (Bello & Kwa, 2004). In
early 2008, these issues have still not been resolved.
Europe's Agricultural Subsidies
Subsidies amount to about US$ 17,000/year for each EU farmer (Legum, 2002).
Pascal Lamy, the French E.U. Trade Commissioner, explained (Legum,
2002), " 'The EU has taken a deliberate decision to keep its farmers
on the land, whether or not they are internationally competitive…If we
are fully competitive, employment in the farm sector will drop from 7
million farmers to just one million. This is politically
unacceptable.' "
As in the United States, according to IFPRI (2003), the biggest 25% of
EU subsidy recipients receive more than 60% of all subsidies. The
question is whether market rules should apply to everything.
Important to EU decision-makers is rural life, landscape and
environment. These justify the continuation of its costly and
inefficient farming strategy (Roman, 2003).
Africa is particularly vulnerable to EU farm subsidies because
proximity and decades of colonial and post-colonial relations make
Europe and Africa efficient trading partners. As the result of the
Common Agricultural Policy (CAP), while the average person in
Sub-Saharan Africa earns less than US$ 1/day, a European Cow earns US$
2/day as a result of subsidies (OXFAM, 2002b; Hassett & Shapiro, 2003
& Commission for Africa, 2005). A growing volume of literature argues
that the largest factors stunting African economic development include
not only disease, drought, warfare and mismanagement, but also the
European Union (EU)'s Common Agricultural Policy (CAP). These
subsidies reward European farms to produce more, while dumping this
excess in the Third World, depressing world food prices, while putting
protective tariffs on food exported from Africa (OXFAM, 2002b; Hassett
& Shapiro, 2003). Tariff peaks still persist in several products
(e.g., sugar, meat and horticultural products) and tariff escalation
(higher tariff on more processed products which are given greater
protection to the processing industry of the importing country) still
prevails in several important product chains (e.g. coffee, cocoa,
oilseeds, vegetable, fruit and nuts, and hides and skins) (NEPAD,
2002).
Currently, the CAP consumes 40 billion Euros annually, about half of
the EU budget. The CAP sets price guarantees far higher than world
prices or production costs. To assure that they are not under-cut
abroad, European farmers, like U.S. farmers, receive hefty export
subsidies to add to their domestic profits. Politicians seeking
election then call on their "partners" for financial support. Thus,
large agribusinesses thrive on government largess at the expense of
the world's most vulnerable people. This injustice is maintained
because politicians receive their share of the profits (OXFAM, 2002b;
Hassett & Shapiro, 2003).
Population density, weather and the cost of capital and labor make the
EU an inefficient dairy producer, cost of production being on average
twice as high as international prices. Yet Europe accounts for 40% of
the world's exports of whole milk powder and 33% of world cheese
exports. Europeans may think that these subsidies go to quaint dairy
farms dotting the French and Dutch countryside, but in reality, most
of these subsidies go to multi-national agribusinesses such as Aria
Foods and Nestlé (Hassett & Shapiro, 2003).
EU subsidies for sugar have an even worse impact on the tropics,
including Africa. Sugar cane farmers in the tropics can produce more
than twice as much as rivals in cooler climates growing sugar beets.
In addition, land prices, wages and other production factors in
tropical countries are a small fraction of what they are in the
European countries. Yet the EU, with the world's highest sugar
production costs, is the world's largest sugar exporter. EU farmers
receive guaranteed prices for sugar even if it sells overseas at a
lesser price, while in Europe sugar is sold at high prices. CAP
tariffs of 140% keep foreign sugar off the EU market. Single large
firms account for the entire domestic production for sales and
production in at least eight European countries, with little or no
impact on the small producer. Meanwhile, price guarantees and export
subsidies enable EU producers, some as far north as Finland, to claim
a significant share of the sugar market, even in tropical Africa.
Joseph Daul, chairman of the EU parliament's agriculture and rural
development committee, which must approve any sugar subsidy reform, is
himself a major French sugar beet farmer (Hassett & Shapiro, 2003).
Due to subsidies, Europe is the world's largest exporter of white
sugar, pushing more efficient producers in countries such as Malawi
and Zambia out of regional markets. The same CAP restricts the entry
of African sugar into EU markets. Mozambique, where 70% of the rural
population lives below the poverty line, loses US$ 100 million a year
from EU subsidies. Like the U.S., the EU uses Africa as a dumping
ground for surpluses. Everything from milk to wheat is sold at
"giveaway" prices, destroying the markets on which small farmers
depend. By undermining local self-reliance, dumping, linked to
subsidies by rich countries in Africa, is helping to create conditions
for famine. In February 2003 at a summit of African leaders in Paris,
President Chirac called for a moratorium on agricultural dumping in
Africa (Palmer & Kline, 2003).
In 2004, challenged by Brazil, the WTO ruled that the EU is violating
its commitments to the WTO by exporting up to 4 times more subsidized
sugar onto world markets than is allowed (OXFAM, 2004b)
A recent study by the Institute of Economic Affairs in Britain
estimates that EU agricultural policies have reduced African exports
of:
Milk by 90%;
Livestock by 70%;
Meat by 60%;
Non-grain crops by 60%; and
Grains by 40%.
They estimate that the CAP reduces Africa's potential export of
agricultural products by half (50%). They estimate that without the
CAP, the current US$ 10.9 billion in annual food related exports from
Sub-Saharan Africa (excluding South Africa) could grow to nearly US$
22 billion/year. The Washington-based Food Policy Research Institute
(IFPRI) found in Sub-Saharan Africa that every US$ 1 in agricultural
income produces US$ 1.42 in GDP3. Getting rid of CAP could raise the
GDP by US$ 26.4 billion/year, increasing annual per capita incomes by
13% on the subcontinent (Hassett & Shapiro, 2003).
Agricultural Subsidies and Support in Europe and U.S. to Large, Not
Small Farmers
The general trend, as noted in Europe but also in the U.S., is for
subsidies and support to go mostly to the largest farmers, often
corporate farms, not the small farmer. The Commission for Africa
(2005) estimates that
"only 4% of EU support goes to 25% of the smallest farms, roughly the
same in the U.S. with the largest 25% of the farms receiving over 70%
of the support, reaching 80% in the U.S…It is estimated that a move to
free-trade in sugar would raise world prices by something close to
40%, and could generate around US$ 4.7 billion in welfare gains for
the developing countries".
According to IFPRI (2003), in the U.S. 60% of farmers get no support
at all, while the biggest 7% account for 50% of government payments.
Large corporate farms, making up 17% of the farms given subsidies,
received 56% of total subsidy payments (Redline & Kline, 2007).
12.2.4.3 Tanzania and U.S./EU farm subsidies
"Northern import restrictions and production subsidies help to explain
two features of the world agricultural trading system left intact
under globalization: slow growth and continued domination by
industrialized countries" (IFPRI, 2003).
Strolling around supermarkets in Dar es Salaam, it is easier to find
boxes of orange juice from Dubai, lines of canned beef from the UK and
butter and cheese from as far away as New Zealand than it is to find
local produce. Because of these subsidies, Shoprite (a South African
supermarket in Tanzania) will find it easier to import something than
to buy it locally. According to UN figures, approximately five
million people are involved in cotton production in Tanzania, but for
the last few years, the industry has remained idle because of heavy
cotton subsidies (50%) in the United States. If the prices are bad,
the private sector will not buy from the farmer. This has resulted in
two or three successive years of the cotton being left in the fields
without being bought, greatly affecting the farmers' livelihoods.
Removing subsidies in the U.S. or the European Union (EU) is not a
question of making people richer, but rather improving the living
standards of rural populations, which account for some 85% of
Tanzania's 31 million people and 350 million people across Sub-Saharan
Africa. The impact of subsidies is far bigger than the small amount
of foreign aid that this country is receiving. If people are going to
talk about sustainable development, then they should get rid of
subsidies (United Nations, 2002).
Cotton subsidies and protected markets
Africa's Comparative Advantage in Growing Cotton
Two advantages Africa has over the rest of the World for growing
cotton are long growing seasons and low humidity. Cotton requires at
least 200 days of relatively high temperatures. Temperatures below
20° C inhibit plant growth, especially during flowering and maturation
of the boll. It grows best when the average temperature is 25° C.
Cotton is drought tolerant and can grow well even in areas with
rainfall under 500 mm/year, though higher rainfalls are preferred to
assure economic yields of fiber. On the other hand, high humidity
during maturation and the pre-harvesting period may result in the
bolls rotting (Theron, 1977).
The downside is that cotton takes up tremendous amounts of nutrients
in the soils, requiring mitigation by crop rotation with leguminous
plants to replace nitrogen and control nematodes, and fertilizer
additions based on laboratory testing of soils (Table 12.1)….
U.S. Cotton Subsidies and Africa, Cultivating Poverty
As a result of the U.S. Farm Bill of 2002,
"the resulting loss of cotton exports amounts to 3% of the total
economic output of Mali and Benin, the IMF said, and 1% to 2% for
Burkina Faso and Chad. The damage exceeds the total value of the
relief provided to those countries under a global debt relief
initiative financed by wealthy nations and administered by the World
Bank" (Vieth, 2002).
On the other hand,
"the World Bank estimates that the removal of protection and support
in the cotton sector would increase prices by 13% over the next 10
years and world trade in cotton by 6%. Africa's cotton exports would
increase by 13%" (ILO, 2004).
There are 11 countries in Africa where cotton accounts for more than
one-quarter (25%) of the export revenue, rising to one-half (50%) for
Benin and two-thirds (67%) for Burkina Faso. These exports are a vital
source of foreign exchange, financing essential imports such as food,
fuel and new technologies. They also underpin government revenues,
providing the funds needed to invest in health and education. A study
of Sub-Saharan Africa carried out by the World Health Organization,
found that households growing cotton and maize had better nutrition
and higher income than households growing maize alone. Production was
given a major boost by CFA devaluation in 1994, a move that enhanced
export competitiveness and increased local prices. However, health
risks and environmental pollution, caused by high pesticide and
fertilizer use, have been overlooked. There are also inherent dangers
in reinforcing dependence on a single crop, for which global markets
are highly volatile (OXFAM, 2002a)…
In 2001/2002, America's 25,000 cotton farmers received $3.4 billion a
year in subsidies, double the level in 1992 (OXFAM, 2002a; IFPRI,
2003; Palmer & Kline, 2003) for a crop valued at only US$ 3 billion
(Hayes, 2004). This increase in subsidies is a breach of the "Peace
Clause"4 in the WTO Agreement on Agriculture (OXFAM, 2002a). Under
the 2002 U.S. Farm Bill, cotton farmers will receive a guaranteed
price of around US$ 1.14/kg (52 cents per pound), regardless of what
happens to world market prices (which are currently 19% below that
level). In addition, farmers will receive a further set of payments to
top up their income to a target price level. The result will be that
they will receive a price some 73% above world market levels (OXFAM,
2002a).
The nearly US$ 4 billion (OXFAM, 2002a) to US$ 3-4 billion (Kousari,
2004) in subsidies received by 25,000 of America's cotton farmers in
2001/2002 year is:
Greater than the GNP (GNI) 5 of many Sub-Saharan African countries
(OXFAM, 2002A).
More in subsidies than the entire GDP of Burkina Faso – a country in
which more than two million people depend on cotton production. Over
half of these farmers live below the poverty line. Poverty levels
among recipients of cotton subsidies in the US are zero (OXFAM,
2002a).
Negative to Mali, which received US$ 37 million in foreign aid from
USAID in 2001, but lost US$ 42 million due to U.S./EU cotton subsidies
(OXFAM, 2002a). Mali is Africa's largest cotton producer, with an
output of 600,000 tons in 2003, yet without a textile industry,
processes only 1% of its cotton consumption. Millions of Malian
farmers with 2 ha (5 acres) of cotton live on less than US$ 1/day,
while American farmers average about 405 ha (1,000 acres) (Dizolele,
2004).
Three times more in subsidies than the entire USAID budget for
Sub-Saharan Africa's 500 million people (OXFAM, 2002a; Palmer & Kline,
2003; OXFAM 2004c). Note – latest African population – 622-650
million in 2000 (see Chapter 5, Section 5.9, OVER-POPULATION, SOIL
DEGRADATION AND DECLINING AGRICULTURAL PRODUCTIVITY).
The World Economic Forum (2004) estimates that cotton subsidies by the
West shave about 10% from cotton prices, depriving poor African
farmers of valuable income.
"Removal of U.S. and EU cotton support is estimated to increase
Sub-Saharan Africa cotton exports by 75%. African farmers are much
more competitive than their U.S. and EU counterparts, producing a
pound of cotton for 21 cents in Burkina Faso, compared with 73 cents
in the U.S". (Commission for Africa, 2005).
OECD cotton subsidies negatively impact an estimated 10-11 million
small farmers in West Africa (IFPRI, 2003; Kousari, 2004; Commission
for Africa, 2005).
These subsidies create a huge disadvantage for resource-poor African
farmers and a parallel unfair advantage for their American
counterparts. By driving down prices, U.S. taxpayers and their
European counterparts in other product groups, bear a direct
responsibility for poverty in Africa (OXFAM, 2002a). For instance, in
Benin where cotton accounts for 7% of GDP and 40% of exports, a
percentage point increase in world cotton prices from reduced
subsidies would reduce poverty by 1.5 percentage points (World
Economic Forum, 2004). A 25% increase in the world price of cotton,
roughly corresponding to the effect of the elimination of U.S.
subsidies, would cause the national incidence of poverty in Benin to
decline by 4% (IFPRI, 2003 & Kousari, 2004), enabling 250,000 people
to rise above the poverty line (IFPRI, 2003).
The USA is not the only country subsidizing cotton. "The EU provides
up to US$ 1 billion in support to EU cotton production" (Commission
for Africa, 2005).
While there are a large number of countries producing cotton, just
four – China, the U.S., India and Pakistan, in descending order –
account for 67% (two-thirds) of total production. Most cotton is
consumed in the country that produces it. The major exception to this
rule is the United States. In a typical year, more than half of U.S.
cotton is exported. Over the longer-term, subsidies have enabled the
U.S. to expand its share of world cotton production (on a linear trend
basis) from around 16% at the start of the 1990s to over 20% at the
end of the decade. The upshot is that the U.S. is, by some margin, the
world's largest exporter of cotton (OXFAM, 2002a).
Because the U.S. is the world's largest exporter of cotton (OXFAM,
2002a; Palmer & Kline, 2003), accounting for 40% of the world market
(IFPRI, 2003), these subsidies push down world prices, which have
fallen by half since the mid-1990s (OXFAM, 2002a; Palmer & Kline,
2003). Adjusted for inflation, average prices for cotton are lower
than at any time since the Great Depression of the 1930s, at just
under US$ 0.88/kg (US$ 0.40/pound) in 2001/2002 versus a high of just
over US$ 1.98 /kg (US$ 0.90 cents/pound) in 1995/96 (OXFAM, 2002a).
OXFAM (2004c) estimates that U.S. dumping created losses of almost
$400 million for poor cotton-producing African countries between 2001
and 2003. The Commission for Africa (2005) estimates that
"U.S. support to its cotton farmers was $US 3.9 billion in 2002,
driving down world prices by 10-20%, with annual income losses in West
African cotton producing countries estimated at $US 250 million. This
support is expected to stay at these levels for the next 6 years,
ensuring that U.S. farmers get twice the current world price for
cotton".
Offenheiser (2006) estimates a loss of US$ 200 million/year in income
to ten million West African farmers due to US$ 4 billion/year in U.S.
government subsidies going to the 25,000 American cotton farmers.
Basically, exports are going up, but countries are earning less.
12.2.4.5 Sub-Saharan Africa marine fisheries and EU subsidies
"For African LDCs seafood exports are worth $US 570 million - Senegal
28%, Tanzania 19%, Mozambique 12%, Uganda 11% Angola 6%...Seafood
exports have grown in importance in Africa in recent years, with
exports in SADC quadrupling to $US 892 million between 1998 and 2001.
By that date, African exports to the EU had reached $US 1.75 billion.
Yet the EU subsidizes this sector heavily, at around $US 1 billion
annually: $US 280 million of which supports 850 vessels to fish
outside EU waters. When coupled with highly onerous and perversely
worded rules of origin, African exports to the EU are even further
undermined. Fishing agreements that allow European boats to fish
African waters are often badly negotiated. They only return around $US
0.8 billion in royalties, and EU tuna boats in five West African
states pay less than 1% of the value of the catch to these governments
(a governance problem). Transparent and competitive tendering,
including more organized action at the regional level, could go some
way to ensuring Africa gains from the contracts it offers. At the same
time, the subsidized EU fleets have superior equipment, which means
they can catch far more than the African boats" (Commission for
Africa, 2005).6
13.13.6.3 Other agreements
The EU Cotonou Agreement for African Caribbean and Pacific (ACP)
"is a very open scheme, with enhanced preferences beyond those in
the GSP scheme, and with protocols for bananas, beef, veal and sugar.
This incorporates all of SSA excluding South Africa" (Commission for
Africa 2005).
Under the Cotonou Agreement products covered by the Common
Agricultural Policy (CAP) still face customs duties.
The EU's "Everything but Arms (EBA)" (Regulation (EC) 416/2001,
February 2001) initiative of duty-free and quota-free entry for all
products (except arms) for LDCs includes 34 African countries.
Although access to the EU markets for agricultural products may no
longer be a major problem for African LDCs, a number of factors may
impede African preferential access. This includes rules of origin and
standards such as sanitary/phytosanitary requirements and other
technical barriers to trade (NEPAD, 2002).
"Only imports of fresh bananas, rice and sugar are not fully
liberalized immediately. Duties on those products will be gradually
reduced until duty free access will be granted for bananas in January
2006, for sugar in July 2009 and for rice in September 2009. In the
meantime, there will be duty free tariff quotas for rice and sugar
(see the latest regulations for sugar quotas No 1381/2002 and rice
quotas 1401/2002 in the list of legislation). The EBA Regulation
foresees that the special arrangements for LDC's should be maintained
for an unlimited period of time and not be subject to the periodic
renewal of the Community's scheme of generalized preferences.
Therefore, the date of expiry of Council Regulation (EC) No 2501/2001
does not apply to its EBA provisions" (EU, 2004).
The tariff on bananas will be reduced 20%/year between January 1, 2002
and January 1, 2006, with the 2002 quota being 544 EUR/1,000 kg (i.e.
80% of the Most Favored Nation (MFN) duty of 680 EUR/1,000 kg).
Customs duty for rice will see the tariff reduced to zero between
September 1, 2006 and September 1, 2009. In the interim, rice can
come in duty free under a tariff quota, growing 15%/year between
2001/2002 and 2008/2009 respectively, from 2,517 tons to 6,696 tons.
Full trade liberalization of sugar will be phased in between July 1,
2006 and July 1, 2009, gradually reducing the full EU tariff to zero.
In the meantime, sugar can come in duty free within the limits of a
tariff quota, from 74,185 tons in 2001/2 to 197,335 ton in 2008/9
(Table 13.11) (UN, 2002).
Table 13.11: Summary of the European Union "Everything but Arms
(EBA)" initiative
Pre-EBA EBA
Product Coverage All GSP covered products
Additional list of products for LDCs only
Certain sensitive agricultural products excluded
All products but arms (HS Ch 93)
Depth of Tariff Cut Duty-free for all GSP covered products
For the additional list of products, different tariff cuts available
according to the import sensitivity of products (four products
categories)
No preferences on the specific component of MFN duties, on entry
price, on the agricultural component and on other duties
Duty-free for all products
All duties entirely
Delayed (phased-in period). Trade liberalization for bananas, sugar & rice
Rules of Origin Regulation 1602/2000 Regulation 1602/2000 but ACP LDCs
moving into EBA may lose ACP
Source: UN (2002) with permission, UN.
"In 2003 Canada expanded its GSP scheme to cover substantially all
products from LDCs, including textiles and clothing, with the
exception of a limited number of products (eggs, poultry and dairy),
along with liberal rules of origin. In 2000 and 2003, Japan has
progressively expanded the number of industrial and agricultural
products from LDCs receiving duty-free access. This covers 31 SSA LDCs
except for Djibouti and Comoros" (Commission for Africa, 2005).
Stiglitz (2002) believes this is a start, but still puts developing
countries at a competitive disadvantage due to competing with EU
agricultural subsidies (see Chapter 12, Section 12.2.4, Agricultural
Tariffs and Subsidies). Modeled benefits to Sub-Saharan Africa from
liberalizing OECD agricultural markets show losses to Sub-Saharan and
southern Africa when partial trade liberalization is carried out
largely due to the impact of preference erosion, with many African
countries being major beneficiaries of existing preferential trading
arrangements (e.g., beef from southern Africa and sugar from Mauritius
under the Lomé Convention). The gains from full liberalization
increase from US$ 704 million in the static model to US$ 4.3 billion
in the dynamic model, associated with the impact of capital
accumulation. This indicates the importance of complementing trade
liberalization with investment (FDI) enhancing policies. However, it
was found that the reforms may force countries to specialize more in
the production of agricultural commodities, indicating the urgency of
adopting policies to promote export diversification out of primary
commodities and into industrial and service industries with a higher
value-added (UNECA,7 2004). Relying on primary commodities, as
discussed in Chapters 5 and 12, indicates that
"price volatility, arising mainly from supply shocks and the secular
decline in real commodity prices, and the attendant terms-of-trade
losses have exacted heavy costs in terms of incomes, indebtedness,
investment, poverty and development" (UNECA, 2004).
--
Man would indeed be in a poor way if he had to be restrained by fear
of punishment and hope of reward after death." --
Albert Einstein !!!
http://www.scribd.com/doc/22151765/History-of-Pakistan-Army-from-1757-to-1971
http://www.scribd.com/doc/21693873/Indo-Pak-Wars-1947-71-A-STRATEGIC-AND-OPERATIONAL-ANALYSIS-BY-A-H-AMIN
http://www.scribd.com/doc/21686885/TALIBAN-WAR-IN-AFGHANISTAN
http://www.scribd.com/doc/22455178/Letters-to-Command-and-Staff-College-Quetta-Citadel-Journal
http://www.scribd.com/doc/23150027/Pakistan-Army-through-eyes-of-Pakistani-Generals
http://www.scribd.com/doc/23701412/War-of-Independence-of-1857
http://www.scribd.com/doc/22457862/Pakistan-Army-Journal-The-Citadel
http://www.scribd.com/doc/21952758/1971-India-Pakistan-War
http://www.scribd.com/doc/25171703/BOOK-REVIEWS-BY-AGHA-H-AMIN
Hello—I'm Lance Boyle, and I'll be your host for "Modern Classics," a new movie feature coming soon to WTFN. We'll show you classic works of literature and film that have been adapted, sometimes very freely, to bring to life our political reality. Here's a sneak peek at a Canadian adaptation of Christopher Marlowe's 1604 masterpiece The Tragical History of Dr. Faustus. The story has been played and re-interpreted by other masters over the centuries—Mann, Goethe, Gounod—but its central theme has remained unchanged: a bored, frustrated but otherwise bright man sells his soul to gratify his ambitions. Here are a few scenes from Layton Tendencies.
Many people have not heard of 
In order to counter the 
