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Multilateral still better than bilateral talks

Inter Press Service (Johannesburg) | 31 July 2007

Multilateral Still Better Than Bilateral Talks

By Tonderai Kwidini

Kumbirai Katsande, the managing director of a top Zimbabwean horticultural company, is in a buoyant mood. He hopes that his firm, Ariston Holdings, will make a big break in the lucrative European horticultural market where it sells its products.

"Our dream is to increase the volumes of flowers and fruit that we export to Europe. We have set ourselves a target of sending a full cargo load of our products to Europe within the first week of summer in Zimbabwe," said Katsande with a broad smile.

But while he is optimistic, Katsande is very much aware of the pitfalls of the skewed game of international trade. These may well prevent his dream for his company from becoming true.

"Although we are producing probably one of the best flower breeds in the world we still have no choice when it comes to determining the prices of our product on the international market. This is done by merchants in Europe and we do not know what will happen there," Katsande told IPS.

It is against this background that the Zimbabwean government, as part of the African, Caribbean and Pacific (ACP) group of countries, has been engaging the European Union (EU) with a view to doing away with unfair trade imbalances through the EU’s proposed economic partnership agreements (EPAs).

The Zimbabwean government says it supports the ongoing EPA negotiations between the ACP and EU countries.

Minister of Industry and International Trade Obert Mpofu told IPS in an interview that the Zimbabwean government supports the EPA talks but also supports the efforts of Brazil and India to level the playing field in international trade in the World Trade Organisation.

"We have bilateral trade agreements with European countries but when it comes to international trade issues we will support the multilateral route, which is why we hold memberships to the various international bodies. We do not believe that the bilateral route will not take us very far in international trade," said Mpofu.

Added Deputy Minister of Information and Publicity Bright Matonga, "at least we are to negotiate as part of a big bloc, the Southern African Development Community (SADC), and the Europeans will not be able to choose a preferred customer. When we try to negotiate as individual countries, we give them the ammunition to divide and discriminate against us".

"There are serious structural issues which are overcome by negotiating as a bloc. For example, Zimbabwe’s impasse with the United Kingdom was made an EU issue. For them, what is bad for one country is bad for all of them and that is exactly what we are saying with regards to these trade issues.

"There should not be any discrimination and if the EU comes with any prescribed measures on who to trade with and who not to trade with, then African countries as a bloc should take a common stand." Matonga is adamant that Europe should not be given the leeway to choose who it wants to do business with.

"We support the collective approach to trade issues. As long as trade is approached from an African perspective, Zimbabwe will support the talks. We understand that there are standards that have to be adhered to.

"We welcome these as long as they do not discriminate against certain countries," he said in apparent reference to rich countries’ punitive measures against the Zimbabwean government, taken in an effort to influence its policies.

Like other developing countries, the Zimbabwean government is also worried about the issue of agricultural subsidies in large markets such as the US and EU.

Zimbabwe is one of the African countries which have benefited from preferential trade agreements between the ACP and the EU over the years. The Lome agreements allowed unrestricted access to most of Zimbabwe’s exports to the EU, including products such as beef and flowers.

The EU and the ACP’s Cotonou trade agreement of 2000 was ratified by Zimbabwe’s parliament on November 15 2002. One of the objectives of the agreement is the eradication of poverty to enable the creation of stable economies.

The ACP countries and the EU also decided to act together and negotiate the EPAs to better integrate ACP countries into the global economy.

Zimbabwe introduced export processing zones (EPZs) as a way of boosting the country’s export earnings. The country’s export earnings have been poor for many years due to the worsening political crisis. Under the EPZ programme, exporting companies are given various incentives such as a five-year tax holiday and a low import duty of 15 percent at first, to be replaced by duty free importation of capital goods and machinery after a set period.

Some of the farms in the EPZ were acquired under the controversial land reform programme in 2000. Some of the notable companies affected by the land reform programme were Kondozi farm and Charleswood Estate in eastern Zimbabwe. Both produced world-class fruit and flowers for export.

Jabusile Shumba, a Harare-based researcher who has attended World Social Forum (WSF) meetings, warned that Africa should not wait for "manna from heaven" in the current EPA negotiations.

"We need an African programme with which to achieve what the Asian tigers have achieved with minimal resources. We should make ourselves globally competitive by adding value to our products.

"Take a look at developing countries that produce coffee beans which are sold for two US cents but when it returns, it is coffee which will be sold for two dollars. The ACP-EU negotiations are very necessary but they should be done within a legal context to ensure that no country, poor or rich, break the agreed rules."

 source: IPS