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Last Updated: Friday, 23 June 2006, 18:26 GMT 19:26 UK
Slow progress on fair deal for Africa
South African President Thabo Mbeki
Thabo Mbeki was among African leaders at Gleneagles

The BBC is investigating how Africa is faring one year on from the promises of increased aid made at the G8 summit in Gleneagles.

BBC economics correspondent Andrew Walker looks at what progress - if any - has been made on the vital issue of improving Africa's share of global trade.

The G8 summit last year promised a lot to Africa. Seven African leaders made the long trip to Gleneagles - presumably not just for a round of golf.

The economic headlines were debt relief, better trade opportunities and more aid.

The promise on development aid was an extra $25bn annually by 2010. That would be a doubling compared with the level in 2004.

On trade, there was a commitment to "an ambitious and balanced conclusion to the Doha Round", the trade liberalisation negotiations being conducted in the World Trade Organization (WTO).

For some African countries, debt relief is partly done, with more due at the beginning of July.

Boosting aid budgets and reforming trade policy will take more time. Trade, in particular, is turning out to be very difficult.

The G8 leaders were hoping for decisive progress at the WTO's ministerial meeting in December in Hong Kong. In the event, Hong Kong was a wash-out.

It did achieve a tentative date, 2013, for eliminating agricultural export subsidies, which are resented by many developed and developing nations. That was important, but there wasn't very much else.

Tariff trouble

Progress has been slow in some other important areas. Rich countries' cotton subsidies - especially in the US - are one example.

African cotton producers want them abolished. There is little chance of that, and the US has made it clear that the extent of any reductions will depend on progress in other trade areas the US cares about.

And there are other issues that illustrate a divergence of interests among developing nations.

Some of the poorest countries already have preferential access to the markets of the rich countries. So where a Brazilian exporter selling bananas to the EU would have to pay a tariff of 176 euros per tonne, Cameroon can sell its bananas tariff-free.

There are many goods where these "preferences" give some degree of advantage to the poorest countries, and a few others. Most sub-Saharan African countries get some benefit.

But if the WTO negotiations lead to general cuts in tariffs - and they will, if there is a deal - then the value of these preferences will be eroded.

WTO members agreed when the talks began that there should be some compensation for this, in the form of additional access to rich-country markets for the poorest developing countries, free of tariffs and quota restrictions. But how much has been hard to agree.

Food fight

Organic cotton farmer in Chongwe, Zambia
African cotton producers are opposed to US subsidies

And then there is the reduction of agricultural subsidies that many countries want the US, Europe and other rich countries to agree.

It is likely to raise the price of food on world markets. Good news for some farmers in Africa, but not for people buying food.

Many poor countries import more food than they export, so a rise in food prices would, on balance, cost them money.

The WTO has officially designated 76 countries "net food importers" - 41 of them are in sub-Saharan Africa.

In time, their farmers might respond to the higher prices and produce more, but the immediate effect could be a loss overall for such countries.

So a trade deal to help Africa does need to recognise the problems of higher food prices and the erosion of trade preferences.

Trade tangle

A lot of effort is going into the idea of aid-for-trade - that is, financial assistance to help the poorest countries take advantage of opportunities to sell their goods abroad.

Bananas
Some African nations can sell bananas duty-free to the EU

It can cover a wide range of projects - updating ports, customs procedures and help with implementing new trade agreements.

The G8 called for more of it. The World Bank and the International Monetary Fund are working on it. And the WTO negotiations are to come up with some recommendations on how to do it - though the WTO won't be the forum for managing large increases in aid for trade.

But critics, such as Oxfam, say that previous promises to provide more aid for trade have not been kept.

The WTO negotiations are very much work in progress, and slow progress at that. It is still perfectly possible that they will ultimately run into the sand.

In July next year, the US president's special authority to negotiate trade agreements runs out.

After that, any trade deal could be amended by the US Congress, which would probably make it unacceptable to other WTO countries.

If that were to happen, the G8's hopes of reforming the trade rules would have come to very little indeed.


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