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Southern Africa: Slowing Fast-Track Trade

AfricaFocus Bulletin
May 9, 2006 (060509)
(Reposted from sources cited below)

Editor's Note

Civil society groups in both South Africa and the Untied Statets are applauding the halt in progress in trade talks between the United States and the Southern African Customs Union (SACU). The groups say that U.S. insistence on a "one-size fits all approach" is inappropriate for SACU, which includes five southern African countries at different stages of development. Moreover, they say, the U.S. approach contains many provisions that would damage health, workers' rights, and the prospects of small farmers.

This AfricaFocus Bulletin contains a joint press release from the U.S-SACU FTA Working Group in the United States and the Trade Strategy Group in South Africa, each a coalition of multiple civil society organizations. It also contains excerpts from an earlier statement with additional background from the U.S-SACU FTA Working Group.

For additional background on U.S. bilateral free trade agreements, see http://www.afsc.org/trade-matters

For a commentary of the U.S.-SACU FTA from Kathy McNeely of Church World Service, see http://allafrica.com/stories/200605040490.html .

For an African civil society statement calling for stopping the parallel Economic Partnership Agreements being advanced by the European Union, see http://twnafrica.org/print.asp?twnID=892.

For previous AfricaFocus Bulletins on trade issues, visit http://www.africafocus.org/tradexp.php.

++++++++++++++++++++++end editor's note+++++++++++++++++++++++

Departing from USTR, Portman Leaves Dead US-Southern Africa Negotiations Behind

Activists, Unions, and Churches Applaud Rejection of "One Size Fits All" Model; Say Rejected Deal Could Have Undermined Fight Against AIDS & Poverty

April 18, 2006

U.S.-SACU Free Trade Association Working Group
Trade Strategy Group South Africa

For more information:
Jessica Walker Beaumont 1 (917) 609-5788 (U.S.)
Brendan Vickers 27 (82) 466-1701 (South Africa)

http://www.afsc.org/trade-matters

Pretoria, South Africa/Washington, DC - Today, as US Trade Rep. Robert Portman stepped down to run the Office of Management and Budget, civil society organizations in the US and South Africa are applauding the rejection of the USTR's efforts to revive the U.S.-Southern Africa Customs Union[1] Free Trade Agreement (U.S.-SACU FTA) negotiations. Citing elements of the potential deal that could have limited access to affordable generic AIDS drugs and other life-extending medicines and impeded development in the region, activists, unions, and churches today expressed satisfaction that a "comprehensive" FTA is looking increasingly unlikely. SACU countries sent a strong message, say activists, that they will not be held hostage to the U.S. "fast track" timelines and will not sacrifice their ability to address poverty. Instead, negotiators in Pretoria, where Mr. Portman made his departure announcement, are talking of pursing a watered down "joint work program"-a shift civil society groups hope signals an end to the push for inappropriate, pro-corporate trade rules in the region.

The negotiations for what would be the first U.S. bilateral trade deal in Sub-Saharan Africa have been "on again, off again" for the last three years. This is largely because the U.S. Trade Representative's Office refuses to commit to structuring the FTA in a way that takes the grinding poverty, dependence on agriculture for livelihoods, and lack of access to essential services and medicines in the region into account.

Today, it was reaffirmed that the SACU countries have rejected a "comprehensive" FTA that would have included all economic sectors, and worked from the same template USTR has used for trade agreements in Latin America, Southeast Asia, North Africa and the Middle East. Instead, discussions appear to heading down a path of a "joint work program" that could look much like the US-Swiss Cooperation Forum that was developed when free trade talks collapsed between the countries of agriculture subsidies.

"Scholars have studied other U.S. free trade agreements and have found that there is a 'one-size-fits-all' or as the negotiations would say an FTA framework," said Carol Thompson, Research Chair of the Association of Concerned African Scholars from Northern Arizona University. "By refusing to take issues like patents on life-saving medicines, provision of essential services, and food crops of special importance off the 'trade liberalization' table, the U.S. is putting Southern African nations in the position of choosing between trade and the very lives of their people," she said.

Among the top complaints of civil society and some legislators is that the negotiations are being held under an anti-democratic veil of secrecy. While it is well known from the statements of trade negotiators that the U.S. is pursuing an equivalently problematic approach throughout the world, keeping proposals secret keeps the populations and many elected official in the both the U.S. and Southern Africa in the dark about essential issues.

Coalitions in both the U.S. and South Africa today applauded the halt to the talks. These coalitions encompass a collection of policy groups, trade unions, faith-based networks, student groups, academics, people living with HIV/AIDS, women's groups, and environmental organizations.

"Given the unique developmental profile of SACU - including a least developed country, Lesotho - we confront a plethora of socio-economic challenges, aggravated by the unfair and scandalous trade practices of our development partners in the North", says Brendan Vickers, Senior Researcher at the Institute for global Dialogue in South Africa. "It Is critical that our government maintains their right to policy space and the right to protect programs like the Black Economic Empowerment initiative used to undo historical injustices of the colonial and Apartheid era," concluded Vickers.

Access to medicines and the effects of intellectual property rights on people living with HIV/AIDS is a hot button issue for the region. The SACU countries are home to the highest HIV prevalence rates in the world, with countries like Lesotho reporting well over a third of adults infected, but where only about 14% of those in need of HIV/AIDS medication have access.

"As far as South Africa is concerned, it is under a constitutional obligation not to trade away the health of its population," says Jonathon Burger of the AIDS Law Project based in South Africa. "We are committed to take whatever legal means at our disposal to block any agreement that undermines our right to access to medicines and cannot count out a constitutional challenge of the agreement as a whole," says Burger.

According to experts, the US-promoted rules would have violated a WTO agreement on public health reached at the 2001 Doha WTO Ministerial, permitting countries to prioritize access to medicines while implementing their intellectual property regimes. In the case of SACU, the rules would also violate U.S. Executive Order 13155, which states: "[the U.S.] shall not seek revision or revocation of any intellectual property law or policy of a...sub-Saharan African country...that regulates HIV/AIDS pharmaceuticals or medical technologies if the law or policy of the country...promotes access to HIV/AIDS pharmaceuticals or medical technologies for affected populations in that country."

"As the largest trade union federation in South Africa with two million members we are concerned about a Free Trade Agreement modeled after other U.S. agreements and its potential negative impact on levels of employment, poverty and government's ability to meet basic needs," said Tanya Van Meelis of the Congress of South Africa Trade Unions (COSATU). "In a country that faces 26 percent official unemployment and 40 percent when using the broader definition that includes those too discouraged to seek work," continued Van Meelis, "if an FTA cannot contribute to these goals, we would not support it."

"As a Christian I follow the messages of Jesus - a man who spent his time with the rural poor, who challenged systems of power and disparity between the rich and powerful and the resource poor and powerlessness" said Kathy McNeeley, Policy Analyst from Church World Service, a ministry of 35 Protestant, Orthodox, and Anglican denominations in the U.S. "Many Christians in the U.S. participated in fighting against Apartheid and they know that these kinds of struggles are for the long


Equitable Trade and Southern Africa: A Cookie Cutter Approach Will Cost Lives and Livelihoods

Statement released 3/27/2006

U.S.-SACU FTA Working Group

[Excerpts only. For full text and list of signatory groups see http://www.afsc.org/trade-matters]

The United States-Southern Africa Customs Union free trade agreement (US-SACU FTA) negotiations began in June 2003 to create the first US free trade area with Africa. The Southern Africa Customs Union, which originated in 1889, is one of the oldest formal trading blocks and includes Botswana, Lesotho, Namibia, South Africa, and Swaziland. As organizations that have worked for many decades in Southern Africa and in the U.S. on issues that concern this region, we share goals of a more just, sustainable and prosperous human society in the region. In this spirit, we raise serious concerns related to the negotiations of the U.S.-SACU FTA and offer recommendations that are essential to a more just trade relationship between the United States and the nations of Southern Africa.

Although the negotiations continue to start and stall and the text remains a total secret, based on the experience and precedent of other US FTA's, it is not difficult to anticipate how the U.S.-SACU FTA will unfold. Looking at the North American Free Trade Agreement (NAFTA), US-Chile FTA, and Central American Free Trade Agreement (CAFTA) models helps us anticipate what will be included. After twelve years, the accumulated evidence surrounding NAFTA demonstrates that any agreement crafted along the lines of that accord would have potentially adverse environmental, economic and human consequences for many people in the United States and Southern Africa.

Democratic Participation and Transparency

US-SACU governments should take active steps to facilitate direct and meaningful engagement from civil society in negotiating the proposed US-SACU FTA. ... US-SACU negotiations have not made available draft texts, proposals, timelines or agendas for the established channels of civil society to have an informed debate. It is essential that U.S.-SACU FTA negotiations extend, beyond the business sector, the appropriate mechanisms for democratic participation.

...

Worker Rights

...

With corporations' increased ability to relocate in search of lower labor costs, a "race to the bottom" has ensued. This trend is disproportionately felt by low-skilled labor that are forced to compete for jobs. Communities are also forced to compete for investment by requiring less of employers. The global race to the bottom has been a significant factor in the stagnation of job quality in the U.S. and the spread of sweatshop labor in Southern Africa. With no existing social provisions in the SACU mandate and the lack of resources for enforcement of member country labor laws, the U.S.-SACU FTA is likely to perpetuate rather than help this problem.

Lesotho saw an increase in jobs under the Africa Growth and Opportunity Act, but many of these jobs had people working under sweatshop conditions, including coercion. With the demise of the global Multi Fiber Agreement and its quota system, investment became more volatile with factories closing literally overnight and managers leaving the country without fulfilling their obligations to pay employees. Those that did not leave use the threat of doing so as a way to gain leverage over workers, thereby preventing them from organizing or joining unions.

The U.S.-SACU FTA should provide the space for participating countries to create policies that retain and create jobs that respect ILO labor standards.

Small Farmers in the United States and Southern Africa

In Southern Africa, where about 70 percent of the population lives in rural areas and suffers the greatest poverty levels, the impact of a trade agreement which does not address the needs of all farmers, especially poor ones, will lead to increased inequalities. ...

Any trade agreement that covers agriculture must recognize national food sovereignty by guaranteeing governmental authority to pursue tariffs and subsidies that safeguard food security, increase food crop diversification and protect the environment. The United States government must prevent private and public dumping of U.S. grains in the region that adversely affects small scale farmers. Such farmers are unable to compete against imported agricultural goods sold below their own production costs or indeed, below the cost of agribusiness production in the U.S.

Current U.S. domestic farm policy, despite subsidies of billions of taxpayer dollars, is destructive of small and medium producers as well as the environment, and therefore, if exported via trade agreements, this agro-system could become harmful to other regions. Free trade agreements are inappropriate instruments to provide sustainable rural development and entitlement to food, either in the U.S. or in Southern Africa.

The U.S.-SACU FTA must contribute to rural development strategies, in the U.S. and Southern Africa, that promote subsistence and small-scale farms, dedicated to enhance food sovereignty and environmental sustainability. Countries should be able to enact legislation that protects products with special economic, social or cultural importance, such as corn and beans, from trade liberalization. ...

Access to Medicines

The SACU countries have the highest rates of HIV in the world and AIDS, as well as other treatable diseases, threaten to devastate the societies and economies of the region. Any trade treaty must not diminish Southern African countries' rights to secure the production, import, export and provision of affordable medicines to respond to the HIV/AIDS epidemic and other public health problems. ...

Traditional Knowledge

The African Union has long opposed patents on life and therefore, no trade agreement should require private intellectual property rights over bio-resources (seeds, plants, animals). In Southern Africa, the Africa Model Legislation provides legal alternatives for protecting breeders' rights, while fully honoring farmers' rights over seeds .Private intellectual property rights over bio-resources rewards transnational corporations, not small scale farmers growing food crops from saved seeds.

Southern African governments must be allowed to enact restrictions on genetically-modified organisms that they deem necessary to sustain regional crop varieties. Any US-Southern African trade agreement must recognize governments' authority to determine and implement publicly legislated safety standards for imported food products ... ...

Investment, Capital Flows and Government Procurement

Any trade agreement should preserve government authority to regulate foreign investment in order to achieve national sustainable development policies. Governments should be able to protect public interest laws from suits and establish performance requirements in order to support an emerging productive sector or meet community development plans. This includes using government contracts to promote gender equality, social justice and respect for human rights. Equally, governments should be able to impose capital controls to protect their economies and citizens from destructive flows of speculative investment.

Despite the need to offset the economic legacy of colonialism, conflict and apartheid, participating countries could lose the right to enforce their affirmative action policies. This includes programs like South Africa's Black Economic Empowerment initiative.

...

The U.S.-SACU FTA should preserve government authority to regulate foreign investment, avoid prohibiting performance requirements, and have no investor-state clause.

Essential Services

Essential services are services that help meet peoples' human rights to food, education, health and basic utilities like water and electricity. Fundamentally, essential services are not tradable commodities and access to basic necessities must not be subject to the negotiated rules of free trade. As such, they should not be included in FTA negotiations.

At a minimum, essential services must be exempt from the "national treatment" standards, which mandate foreign service providers be treated at least as well as domestic providers. ...

The elements and standards in this statement are essential to a trade agreement that could foster a more just, sustainable and prosperous human society, and U.S.-SACU FTA negotiations must be evaluated on the basis of their inclusion. To summarize, these include:

  • Negotiations should not move further without direct involvement from the affected communities and civil society groups in both the United States and SACU countries. We call for access to draft texts as they develop so that an informed public discussion can shape the outcome of negotiations.
  • The U.S.-SACU FTA should provide the space for participating countries to create policies that retain and create jobs that respect International Labor Organization labor standards.
  • The U.S.-SACU FTA must contribute to rural development strategies, in the U.S. and Southern Africa, that promote subsistence and small-scale farms, dedicated to enhance food sovereignty and environmental sustainability. Countries should be able to enact legislation that protects products with special economic, social or cultural importance,such as corn and beans, from trade liberalization.
  • Given the concerns around intellectual property and access to necessary medicines especially in this vulnerable region of the world, the U.S. should take Intellectual Property Rights out of the current negotiations.
  • In the U.S.-SACU FTA, small agricultural producers' rights should take precedence over individual property rights where agricultural genetic resources are concerned. Additionally, the U.S.-SACU FTA should not interfere with a country's ability to live up to the commitment it made in ratifying the Cartagena protocol and its parent Convention on Biological Diversity.
  • The U.S.-SACU FTA should preserve government authority to regulate foreign investment, avoid prohibiting performance requirements, and have no investor-state clause.
  • Fundamentally, the rights of governments to decide which, where, when or whether to open services to foreign providers must be upheld. All services essential to the people and development needs should be excluded form the U.S.-SACU FTA.

This Statement is endorsed by the following U.S.-SACU FTA Working Group Members:

ActionAid International USA
Action LA Coalition
ACTUP (AIDS Coalition to Unleash Power), New York
Africa Action
Africa Faith and Justice Network
Agricultural Missions Inc
American Friends Service Committee
American Medical Students Association
Association of Concerned African Scholars
Center of Concern
Church World Service
Foundation for Integrative AIDS Research (FIAR)
Friends of the Earth - U.S.
HealthGAP (Global Access Project)
International Brotherhood of Teamsters Union
Lutheran World Relief
Oxfam America
Peace No War Network
PLANT (Partnership for the Land and Agricultural Needs of Traditional Peoples)
Priority Africa Network
Student Global AIDS Campaign
Student Trade Justice Campaign
TransAfrica Forum
Justice and Witness Ministries, United Church of Christ
United Students Against Sweatshops
United Students for Fair Trade
Washington Office on Africa


AfricaFocus Bulletin is an independent electronic publication providing reposted commentary and analysis on African issues, with a particular focus on U.S. and international policies. AfricaFocus Bulletin is edited by William Minter.

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