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Africa: Trade still prime engine for prosperity in Africa, official says

United States Department of State (Washington, DC)

October 12, 2006

Africa: Trade Still Prime Engine for Prosperity in Africa, Official Says

Jim Fisher-Thompson, Washington File Staff Writer

Washington, DC

International trade is still one of the best ways to lift Africa from poverty into prosperity and political stability, says Christopher Moore, U.S. deputy assistant secretary of state for trade policy and programs.

"The U.S. trade agenda is a vital component of our overall strategy to work with African partners to promote liberty, peace, stability and increasing prosperity," Moore told a Washington gathering of U.S. ambassadors to Africa. Moore made his comments during an October 12 panel discussion about trade opportunities on the continent.

"We have seen all too well the evidence that poverty breeds violence and fuels political instability," Moore told the diplomats.

"That is a chief reason why the United States and other World Trade Organization [WTO] members embraced the goal of alleviating poverty through increased trade flows as the core of the Doha Development Agenda."

He said that in September a new national security presidential directive on the U.S. strategy for Sub-Saharan Africa was established. Under the directive, the United States will work with African reformers to do the following:

• Stimulate private-sector development,

• Increase Africa’s trade competitiveness, and

• Increase trade integration within Africa itself and the global economy.

Despite the trend toward trade liberalization, Moore said, WTO negotiations, called the Doha round, were suspended at the end of July, "primarily over members’ differences on agriculture." (See related article.)

Moore said, "The number one reason for the suspension is plain and simple: we are out of sync with the European Union [EU] on agriculture. The U.S. offered a far-reaching proposal on agriculture, but the EU was unable to make any significant movement in this area."

To revive the Doha round, formally called the Doha Development Agenda, he said, U.S. Trade Representative Susan Schwab "is going to every corner of the globe to get the talks restarted. Her next such trip is to the African Union Trade Ministers Summit in Addis Ababa [Ethiopia] on October 30-31."

Moore added that it is "imperative that African countries realize their stake in the round."

He said Africa stands to benefit "across the board from a successful Doha round that will open up new markets by cutting tariffs, reducing trade-distorting subsidies and supporting sub-Saharan Africa’s efforts to integrate more fully into the global trading system."

But Africans also need to "engage in reductions of their own tariffs," the U.S. official added. For example, he said, it now costs $75 per ton to ship grain from Iowa to Mombasa, Kenya, while it costs $100 per ton to ship similar cargo from Kampala, Uganda, to Mombasa.

Moore told the U.S. ambassadors that the main message they should take back to their host countries is that "it is imperative that African states position their trade regimes to take full advantage of the increasingly open global economy."

The United States is doing its part by doubling the number of its trade and investment framework agreements (TIFAs) in Africa, Moore said.

"We have launched new TIFAs with Rwanda and Mauritius, and are exploring signing TIFAs with Liberia, Angola and the East African Community [Uganda, Tanzania and Kenya]," he explained.

More importantly, Moore said, "These new TIFAs will complement our other African TIFA partners — the Common Market for Eastern and Southern Africa (COMESA), the West African Economic and Monetary Union (WEAMU), South Africa, Ghana, Nigeria and Mozambique — helping to establish a network of African states and regional organizations committed to reform."

Separately, WTO Director-General Pascal Lamy told "Investment Forum 2006" in Johannesburg, South Africa, via a videoconference October 10, that the WTO is putting together a comprehensive plan "to help developing countries, and African countries in particular, address some of their supply-side constraints, including poor transport and general trade infrastructure networks that will help enhance their ability to benefit from trade opening."

He said the international trade organization also is working with several partners, including the World Bank, the International Monetary Fund, the U.N. Development Programme, regional development banks and bilateral donors, to help countries deal with issues related to product standards and regulations, among others.