- Original Message -
From: Eubulides [EMAIL PROTECTED]
Sent: Friday, August 22, 2003 12:47 AM
Subject: South Africa: WTO strategy
South Africa is likely to act in consent with two main groups in Cancun
next month: it is a key player in both the African bloc and in the Cairns
Group of agriculture exporting countries, which also includes Australia,
Brazil and Chile.
The author of this article, Quentin Wray, is a classical SA hack, trained in
adulating corporate and state power during the apartheid era, with no change
in methodology since. My spin would be different:
FOCUS ON TRADE
NUMBER 90, AUGUST 2003
SOUTH AFRICA'S SUBIMPERIAL TRADE AGENDA:
Splitting Africa to launch a new multilateral round
Patrick Bond*
The September meeting of the World Trade Organisation (WTO) in Cancun will
again reveal how little the African continent has gained from trade
liberalisation.
This is not a short-term problem, but one that reflects durable problems
associated with globalisation. (1) It also reflects the contradictory
position of
South Africa, whose trade minister Alec Erwin has achieved an exceptionally
important position as a Third World negotiator working against the Third
World's
material interests. Erwin will, as in the previous WTO summit at Doha, be
actively
twisting arms and offering soothing commentary to the international media.
But
on most key issues, if the past few years are any guide, the United States
(US)
and European Union (EU) will bulldoze Africa, with Erwin pointing the way.
There is no debate about the magnitude of the problem, although
interpretations
differ markedly as to whether globalisation's ills are cured with more or
less
globalisation. Africa's share of world trade declined over the past quarter
century, while the volume of exports increased. No continent is as oriented
to
exports as Africa. 'Marginalisation' of Africa occurred, hence, not because
of
lack of integration (as is often alleged by neoliberals), but because other
areas
of the world--especially East Asia--moved to the export of manufactured
goods,
while Africa's industrial potential declined thanks to excessive
deregulation
associated with structural adjustment. (2) In the process, rapid
trade-related
integration caused social inequality, in a manner that is now widely
accepted
even by honest World Bank staff. According to the institution's main
econometrician of inequality, Branco Milanovic, 'at very low average income
levels, it is the rich who benefit from openness... It seems that openness
makes
income distribution worse before making it better.' (3)
Openness since the late 1970s has had a devastating impact. The decline in
the
price index for the main (non-fuel) commodities dropped especially
dramatically
from 1977 to 1982, while the export prices of developed countries increased
steadily. During the 1982-90 global expansion, the terms of trade of Third
World
countries still fell markedly, by 4% per year. Much of the decline was due
to the
drop in oil prices that began in earnest in 1986, but non-oil producing
Third World
countries also witnessed a negative 1.5% annual deterioration in the prices
of
their prices of exports relative to imports. This trend continued after the
1990-92
global recession, leaving commodity prices at their lowest levels since the
Great
Depression. (4)
In broader historical terms, the prices of primary commodities (other than
fuels)
have risen and fallen according to a deeper rhythm. Exporters of primary
commodities, for example, have fared particularly badly when financiers have
been most powerful. The cycle typically includes falling commodity prices,
rising
foreign debt, dramatic increases in interest rates, a desperate
intensification of
exports which lowers prices yet further, and bankruptcy. The trend to
declining
terms of trade was especially devastating because of the continent's
extraordinary dependence upon a few export commodities. The following
countries suffer from reliance upon a single product for at least 75% of
their
export earnings: Angola, Botswana, Burundi, Congo, Gabon, Guinea, Niger,
Nigeria, Somalia, Uganda, and Zambia. The only countries which diversified
their exports so that they claim at least 25% of their export earnings from
more
than four products are the Gambia, Lesotho, South Africa, Swaziland,
Tanzania,
and Zimbabwe. Generally, across Africa, four or fewer products make up
three-
quarters of export revenues. More than three-quarters of all Africa's trade
is with
developed countries.
Export-led growth strategies pursued since the 1970s by virtually all Third
World
countries meant that Africa's market share of world commodity prices also
shrunk drastically. In the 1970s and 1980s alone, the African market share
of
coca fell from 75 to 58%, of palm oil from 58 to 18%, of sisal from 48 to
36%, of
coffee from 35 to 20%, of crude petroleum from 15 to 8%, of cotton from 12
to 7%,
and of copper from 10 to 6%. The most far-ranging study of terms of trade
