Rethink unfair EU trade deals, says new Oxfam study

The EU will do irrevocable damage to the development prospects of some of the poorest countries in the world unless it overhauls free trade deals due to be finalised this year, said Oxfam in a report published today. In Partnership or Power Play?, released at the XII UN Conference on Trade and Development in Ghana, Oxfam presents the first comprehensive analysis of the proposed texts. It concludes that, if finalised, these Economic Partnership Agreements (EPAs) would hurt poor people and undermine development across Africa, the Caribbean and Pacific (ACP).

According to the study, the cost will be enormous: annual losses from tariff cuts of $360m for Africa alone, and a further €9bn for compliance for all the countries involved. Not to mention the loss of independent trade policy, badly needed to promote development and protect livelihoods. Oxfam's analysis reveals that promised transition periods for liberalisation of up to 25 years have only been offered to a few countries, for handful of products. Furthermore, developing countries have been granted very limited scope to retain any protection and they have had to use it for agricultural products on which the EU still pays big trade distorting subsidies. Strict intellectual property rules proposed by the EU would deepen the digital divide and challenge traditional farming methods, including seed saving. They are offset by very weak EU commitments to helping poor countries access new technology.

The EU wants to finalise deals on goods by mid-2008 and wind up negotiations on services, investment and other areas over the following year. Yet legal experts say that deals initialled at the end of 2007 are not legally binding and could be revised. Ministers, MPs, trade and development experts and academics have all questioned the current approach. "In a fair deal, Europe would fully open its markets to all exports without demanding reciprocation. It would give developing countries the policy freedom to govern in the public interest and pursue regional integration on their own terms. And it would assist these countries to become more competitive, generate decent jobs and access new technologies," said an Oxfam representative at UNCTAD XII.

The report recommends:
* A thorough independent evaluation of what has been initialled before any deal is signed
* Adaptation of existing EU preference schemes to ensure that no ACP country is left worse off if it doesn't conclude an EPA
* Renegotiation of problematic aspects of the initialled deals
* ACP countries decide whether to negotiate on services, investment and other trade-related issues
* Additional support from the EU to tackle infrastructure and competitiveness constraints in the ACP
* ACP countries take stock within their regional blocs, fully consulting all affected parties including workers, producers and businesses

ActionAid: UNCTAD must be allowed to fully act on its mandate

According to ActionAid, UNCTAD as the apex trade and development body at the UN must be allowed to fully deliver its mandate without any hindrance from the developed countries. The pursuit of deliberate policies by the developed world through institutions such as the World Bank and the International Monetary Fund and the WTO over the years has relegated UNCTAD role of working to secure just trade and development policies for developing countries.

ActionAid condemns moves by the EU and the USA at this conference to further marginalise UNCTAD from the international trade and development agenda. For instance these countries are resisting G77 (Group of Developing Countries) demands to create a commission on globalisation. “UNCTAD XII must at the end of this conference be able to provide practical solutions that can be used to end the miseries of commodity dependent farmers, particularly in Africa”, says Aftab Alam Khan ,ActionAid’s international coordinator on Trade policy. “This would immensely contribute to the development of the commodity dependent Nations who are also among the Highly Indebted and Poor Countries (HIPC)”, he adds.

Amina Salifu, a woman farmer from Northern Ghana says, “The government must put in policies to ensure that the commodity boards are made stronger and where we have none they be set up to prevent us from losing our only source of livelihood”. In addition, to help stem the rising food prices, food aid needs to be increased and sourced locally or regionally, added the NGO. Countries need to be assisted to build up staple food stocks, procuring them from poor farmers in country, where possible. ActionAid believes a lasting solution to the pressures on food supply must include increased investment in smallholder agriculture, and action to reduce the devastating effects of climate change on developing country food production.

Trade unions on UNCTAD XII: Decent work and development

As trade ministers and Heads of State come together in Accra, Ghana to decide on the priorities for the UN’s Conference on Trade and Development (UNCTAD) for the next four years, trade unionists are calling for the UNCTAD XII Conference to endorse a strong UNCTAD agency as the main forum where discussions on the interlinkage between trade and development take place. “The development gains of trade depend largely on positive linkages between trade and employment, and on the capacity of trade to create decent jobs for people that currently are deprived from access to employment that provides a decent living”, said ITUC General Secretary Guy Ryder. “UNCTAD should put full and productive employment and decent work at the heart of the trade and development discussion. Mainstreaming decent work in UNCTAD’s work would be a logical follow-up to the UN’s earlier commitments to prioritise decent work, and a first step towards providing essential policy coherence between UN agencies.”

A trade union delegation will participate in the meetings and will be lobbying for the key issues that should be taken up in UNCTAD’s future work programme, as summarised in an ITUC statement. The statement says that especially in a time where the benefits of trade and globalisation and the distribution of these benefits are being questioned, UNCTAD constitutes a crucial forum that needs to be strengthened. In particular, the statement calls for a reinforcement of the analytical strength and the independent research capacity of UNCTAD.

The ITUC strongly supports the creation of an UNCTAD Commission on Globalisation, which could take up numerous vital issues related to globalisation and development. These include employment impact assessments of trade liberalisation; the problems created by Export Processing Zones with regard to competition on the basis of labour standards; the gender impacts of trade liberalisation; and the policies that need to be developed to address income inequalities.

Aid system not able to tackle impending food crisis, say CARE and Oxfam

According to Oxfam and CARE the international aid system was not fit for purpose and called for fundamental changes in order to tackle the challenge of food price hikes and impending food crises in East and West Africa. The call comes at the end of a conference on how best the world can address global hunger attended by some 30 leading UN and aid agencies in Rome. "Food riots have pushed global hunger onto the political agenda but the aid business will not be able to tackle global hunger while it remains stuck in the past, seeing food crises as one-off events and not tackling the underlining problem - chronic poverty. The world has become much better at sending in teams to save lives but it seems incapable of doing what is needed to prevent crises happening in the first place," said Barbara Stocking, Oxfam's Chief Executive.

CARE and Oxfam warned that besides the impact of food price hikes there are also early signs of impending food shortages in East and West Africa. These potential disasters could be averted if the world takes immediate action. In East Africa the March to May rainy season has been slow to start, triggering concern that another widespread humanitarian crisis might strike for the second time in less than three years. Although there has been some rain over the last week, CARE and Oxfam are particularly concerned about hunger striking the poorest in southern Somalia and the Somali Region of Ethiopia and in West Africa there are worrying warnings of increased hunger hot spots in Mauritania and Niger.

Acting earlier not only saves more lives but makes economic sense. In 2004 and 2005 early warnings alerted world donors that in West Africa, Niger needed aid to avert famine. There was no immediate response, and it was not until television cameras showed emaciated children dying that the world acted. The cost of the delay was high in human life and in economic terms. The UN estimated that acting earlier would have cost $1 a day to prevent a child suffering from malnutrition. Because of delay it cost $80 to save a malnourished child. Another area of concern is the inefficiencies and high costs resulting from self-interest on the part of those delivering aid. Shipping surplus food aid thousands of miles provides a boon to shipping companies, but also increases the cost of delivering food anywhere from 50% to 100%.

CARE and Oxfam are calling for more aid of the right kind in the right place at the right time. Specifically, the organizations want:

* Appropriate aid delivered according to needs: The nature of food insecurity and vulnerability needs to be better understood in order to design more appropriate responses.

* Alternatives to emergency relief, including food aid, to be delivered when appropriate, for example cash for work and other cash transfer schemes. Often food is available during a food crisis. The issue is that it is too expensive for the hungry to buy it. Buying food aid locally can help stimulate the local economy and keep farmers in work. Chronic and cyclical problems need to be addressed through social protection mechanisms, such as social insurance and assistance.

* Support development of poor country governments' capacity to respond to chronic crises: National governments need to invest in the social protection of their citizens, implement 'safety net' programmes (cash for work schemes or targeted assistance to the vulnerable) for populations at risk of hunger, intervene before livelihoods collapse. Donors need to commit resources to support the establishment of local response and safety net mechanisms, e.g. the donors backed 'Productive Safety Net Programme' ensuring predictable assistance to eight million people in Ethiopia. Mechanisms allowing more effective monitoring and coordination of international aid against hunger need to be established within the UN system, and with NGOs.

Disaster risk reduction is a key factor in preventing future crises. Many weather-related crises are cyclical and preparedness and risk reduction strategies can reduce the loss of valuable agricultural production, but this requires a substantial change in emphasis from donors, who will need to make an investment before public support has been mobilized by images of starvation.

* On the recent food price crisis CARE and Oxfam called for: Increase donor and national government investment in small-scale agriculture in developing countries, especially in Sub-Saharan Africa. Most African governments have failed to meet their 2003 promise to allocate at least a tenth of their spending to agriculture and they are now reaping the consequences. Countries such as Malawi and Zambia have shown the way, moving from dependence on food aid to become cereal exporters in recent years. Greater international support is needed. It is important that humanitarian organizations ensure that women can access the opportunities that are created.

Large-scale growth in biofuels demand has pushed up food prices and so far there is little evidence that it is reducing overall carbon emissions. Natural carbon sinks such as rainforests and grasslands are being destroyed to make way for new biofuel plantations and biofuel crops are displacing food production. Countries driving biofuel demand need to monitor the impacts of their policies on global food security and provide financial support for affected countries. Mandatory targets need to be reassessed in terms of likely impact on emissions and negative social and environmental side effects in developing countries, including higher food prices, land grabs and labour rights abuses. Developing countries need to integrate their biofuel strategies with food security policies to address issues such as land allocation and crop use.

* Ensure financial services such as insurance and credit are available to poor farmers. In Thailand, for example, small producers are going to the wall because banks will not lend them money to manage between harvests.

* Allow space for national trade policies to manage food security and rural development and to support the poorest and most marginalised farmers to gain from current price rises.

* Recognise that climate change is going to exacerbate these problems, requiring urgent mitigation and adaptation response

* Eliminate trade-distorting export agricultural subsidies, export restrictions and price controls. This will correct distortions in world markets and pave the way towards a long-term solution to unstable food prices.

"There is clearly a lot that governments and aid agencies must do to tackle hunger," said Jonathan Mitchell, CARE's emergency response director. "What emerged from this conference is that humanitarian and relief agencies are committed to new solutions. We now need aid agencies to be held accountable and for donor governments to get behind these changes."

The full report can be found here.

Rethinking food crisis solutions

In the midst of a commodity prices boom, high volatility in the oil marker, and record high food prices, the International Assessment of Agricultural Science and Technology for Development (IAASTD) sets a new agenda for global food production. A new report suggests that modern agriculture will have to change radically if the world is to avoid social breakdown and environmental collapse. See Al Jazeera's video:

Global Unions: Policy shift needed at IFIs

Responding to concerns about a possible implosion of the financial sector and a major global economic slowdown, the ITUC and its Global Unions partners called on the 2008 Spring Meetings of the World Bank and International Monetary Fund to mandate significantly increased assistance from the two institutions to countries that seek to protect their workers and citizens, particularly the most vulnerable, against the shock of an economic crisis. If there is no firm and coordinated policy response, the dramatic rise in financial and economic uncertainty since mid-2007 will lead to increased unemployment, declining living standards and higher poverty, particularly affecting women, in many countries, according to ITUC General Secretary Guy Ryder.

In a Global Unions statement released on 11 April, the international trade union movement urges the IMF and World Bank to shift their focus from promoting deregulation, including labour market deregulation using the Bank's Doing Business report, in favour of policies promoting the creation of decent work. Global Unions set out a policy agenda for the international financial institutions (IFIs) that could support, rather than dictate to, developing countries.
Specifically, Global Unions call on the IFIs to assist countries that seek to control destabilizing capital flows, require emergency financial assistance to overcome balance of payments problems, that strive to improve social protection, and that extend workplace protection and labour rights to unprotected workers.

Global Unions are encouraging the IMF, in particular, to adopt measures to help cushion states against the global slowdown, such as assistance to offset the impact of higher food and fuel prices, an emergency credit facility for countries in financial difficulty, and measures to protect against destabilizing speculative capital movements. "Just a year ago, the IMF would have been content to let market forces resolve a crisis like this," said Ryder, "but at the recent G7 meeting, even the managing director of the Fund recognized the importance of a coordinated fiscal stimulus response to the current global economic slowdown."

The statement sees a role for the IMF not only in responding to the current crisis, but in preventing new ones. In the statement, Global Unions call on the IMF to take a lead role in developing new international regulatory frameworks to control the largely unregulated activities and new financial instruments that helped set off the crisis.

IMF/WB Spring Meeting: Don’t forget poverty, says Oxfam

Poverty should be at the top of the agenda at the International Monetary Fund and World Bank meetings in Washington this weekend, said international agency Oxfam. With the global economy facing a crisis, Oxfam said the emphasis on the rich world must not eclipse action in developing countries, where rapidly rising food prices and increasingly erratic weather linked to climate change are wreaking havoc. Elizabeth Stuart, senior policy advisor at Oxfam said: "Global economic uncertainty, high food prices, more frequent floods, drought and other impacts of climate change all pose a serious threat to vulnerable people in developing countries. The situation requires urgent action and more money from rich countries and yet, aid levels have fallen for a second straight year."

Oxfam is calling for immediate action from donors and national governments to ensure that the poorest consumers are protected against high food prices and price volatility on food markets worldwide. "The New Deal on targeting world hunger from President Zoellick (>>> Zoellick's Newest Blueprint) is welcome. Past policies prescribed by the World Bank which fast-tracked liberalisation, including in the agriculture sector, have left many countries more vulnerable. Poor countries need the flexibility to support and protect small-scale farmers," said Stuart. While rising prices pose a serious threat to poor people, they may also be an opportunity. Efforts must be made by all actors to ensure that poor rural producers and farm workers can access the potential benefits of higher prices. The crisis should spur much-needed reform and increased investment in small-scale agriculture.

The World Bank has also a vital role to play in fighting climate change and helping poor nations adapt to its impacts, said Oxfam. But any new climate funds that Bank manages need to be linked to the UN climate process. "It's very encouraging that donors want to give more money to redress the devastating problem of climate change. But in doing so, they mustn't undermine the ongoing UN negotiating process," Stuart said.

The new Managing Director of the IMF, Dominique Strauss-Kahn, will be looking to give a facelift to the institution this week. But Oxfam says the governance reform that will be rubber-stamped is a long way from what is actually needed. "This reform would be perfect if the Fund wanted to become completely irrelevant," said Stuart. "By continuing to suppress the voices of so many countries IMF bosses are ensuring that more stakeholders will walk away. You can't talk of real reform when the seven richest members hold more than 40% of the vote."

Patchy progress: Aid and accountability under the Paris framework

(Eurodad) A major new civil society report, Turning the Tables: Aid and accountability under the Paris framework, shows that the world’s rich countries have only made patchy progress in making aid more effective for helping the poor, despite high-profile commitments to reform aid. The report, by Eurodad in collaboration with nine other African and European NGOs, showcases fresh evidence from seven developing countries. It reveals that some development agencies have introduced new policies and procedures, but many are slow to change.

2008 is a critical year for evaluating how aid is helping tackle global poverty and inequality. It is time to review the commitments that 61 rich countries and multilateral agencies signed up to in Paris three years ago. This agreement was a step in the right direction, but donors still have a long way to go to implement their pledges for a more effective, transparent and accountable aid system. “Aid is still too often dominated by rich country agendas and spent on their consultants. When those programmes fail to produce results, nobody is held accountable”, said Lucy Hayes from Eurodad, the European Network on Debt and Development. “Donors such as the European Commission and European governments must deliver on their aid commitments. They have the power and the major responsibility to take the first steps to making their aid money work better for poor people”.

The report is based on case studies that have been carried out in Niger, Mali, Sierra Leone, Mozambique, Honduras, Nicaragua and Cambodia. The report highlights current successes and failures by European donors, and sets out recommendations for changing practices. Some of the findings include:
1. Heavy bureaucratic procedures by the European Commission continue to hamper its aid, and make its payments very unpredictable.
2. France has been financing its aid to Mozambique by recycling its debt service.
3. Spanish debt relief to Honduras is boomeranging back to benefit Spanish companies and organisations.
4. The World Bank is still using its aid to try and force controversial economic reforms in Mali.

“It is very hard for us to see what aid is coming into our country,” said Christian Lawrence, from the Campaign for Good Governance in Sierra Leone, “Donors are not transparent enough about their aid and do not account to citizens in developing countries. Without good information about the money coming in, we cannot scrutinise whether it is being well spent”.

Alternative Ecofin endorsed Ljubljana Declaration

At the same time that the European Council for Economic and Financial Affairs (Ecofin) met in an informal meeting behind closed doors, trade unions, civil society groups and critical scholars have organised a public conference on the current economic and social policies of the European Union. In this Alternative Ecofin they made it clear that, contrary to the official view, the Union is in critical social and political difficulties. This is mainly due to the choice of policies which are harmful for the majority of the people in the Union and benefit only a small but powerful minority. The Alternative Ecofin challenged the assertion that there is no alternative to an increasingly neo-liberal policy and presented and discussed proposals for alternatives in various fields. They insist that broad public discussion must go on and this will contribute to the emerging of new relations of forces and power which are needed for a change towards a policy for a democratic, social and sustainable Europe. Find the full text of the Declaration if Ljubljana >>> here.

World Bank accused to hijack climate change

According to AlterNet/Reuters developing countries and environmental groups accused the World Bank of trying to seize control of the billions of dollars of aid that will be used to tackle climate change in the next four decades. "The World Bank's foray into climate change has gone down like a lead balloon," Friends of the Earth campaigner Tom Picken said at the end of a major climate change conference in the Thai capital. "Many countries and civil society have expressed outrage at the World Bank's attempted hijacking of real efforts to fund climate change efforts," he said.

Before they agree to any sort of restrictions on emissions of the greenhouse gases fuelling global warming, poor countries want firm commitments of billions of dollars in aid from their rich counterparts. The money will be used for everything from flood barriers against rising sea levels to "clean" but costly power stations, an example of the "technology transfer" developing countries say they need to curb emissions of gases such as carbon dioxide. As well as the obvious arguments about how much money will be needed - some estimates run into the trillions of dollars by 2050 - rich and poor countries are struggling even to agree on a bank manager.

At the week-long Bangkok conference, the World Bank pushed its proposals for a $5-10bn Clean Technology Fund, a $500m "adaptation" fund and possibly a third fund dealing with forestry. However, developing countries want climate change cash to be administered through the existing United Nations Framework Convention on Climate Change (UNFCC), which they feel is much less under the control of the Group of 8 (G8) richest countries. "Generally we have been unpleasantly surprised by the funds," said Ana Maria Kleymeyer, Argentina's lead negotiator at the meeting. "This is a way for the World Bank and its donor members to get credit back home for putting money into climate change in a way that's not transparent, that doesn't involve developing countries and that ignores the UNFCC process," she said.

EU development aid cut in 2007 unacceptable, Michel and Schiltz say

According to Reuters news agency, development aid from the European Union's 27 countries fell last year. EU aid amounted to €46.1bn ($72bn) in 2007, down about €1.7bn from 2006, officials said, adding that other major donors had also failed to fulfil their pledges. "2007 was a serious failure for financial aid to development," EU aid and development Commissioner Louis Michel wrote together with Luxembourg's aid minister Jean-Louis Schiltz, in a letter (>>> full text). "The major donors - EU member states, United States, Canada and Japan - failed to fulfil their financial pledges," they wrote ahead of the annual publication of world aid figures by the Organisation for Economic Cooperation and Development. Aid relief from major donors had grown in previous years thanks to debt relief packages for countries such as Iraq and Nigeria.

The EU prides itself as being the world's largest aid donor. "The EU is still the biggest donor in the world, with Official Development Assistance amounting to €93 per citizen," the official said, adding aid was equivalent to €53 per person in the United States and €44 in Japan. But Michel and Schiltz said last year's cut in Europe was unacceptable. "These €1.7bn could have contributed to changing people's lives," they wrote in the letter, which was also published by a number of European newspapers. The EU executive estimates that the amount could have financed 4,500 schools or 1,200 hospitals.

"It is time for Europeans and other major donors to act," Michel and Schiltz wrote. As part of the United Nations' Millennium Development Goals, EU member states pledged to allocate 0.7% of their Gross National Income (GNI) to development assistance by 2015. Aid reached 0.38% of the bloc's GNI last year, below the EU interim target for 2006 of 0.39% - which the bloc did fulfil in 2006. EU states should make multi-annual plan to increase their aid, the letter said.