The following are statements on the United States December 14 “aid for trade” proposal, taken from a news conference organized by the Institute for Agriculture and Trade Policy, Focus on the Global South and Public Citizen
Hon. Love Mtesa, Zambian Ambassador:
Economic liberalization is not a panacea and it must be properly guarded. In Zambia it has led to unemployment and closure of Zambian companies. If aid for trade is to make sense it must address supply side constraints and at the moment we cannot talk about tradeoffs.
It’s ironic that the WTO does not stick to its own principles on transparency and predictability. There are processes going on that we know nothing about. We know as parliamentarians who have been present in negotiations that our trade ministers, even our heads of states, they get calls from Washington and Brussels when our ministers fight for our national interests. And at the end of the day, it’s our constituencies that suffer. It is this process that we are concerned about.
We are not in support for aid for trade. It is a smoke screen to smuggle in other issues that do not benefit us. Let the WTO stick to what it is supposed to do. Simply, conventional aid has not proven to solve African problems. Goodwill for funds has in the past resulted in resources taken out of our countries. It has indebted Africa. As far as we are concerned, a discussion of aid does not belong in the World Trade Organization.
The current deal on the table will bring less than a penny per day per person while it will cost these countries $62 billion in lost tariff revenue.
This development package proposal is an attempt to change the subject from the failure of the WTO talks; it actually highlights the crisis at the WTO when the Bush administration has to cook up a development package to try to get the developing countries to not walk out of the negotiations of the development round! Meanwhile, the only thing worse than a bad, anti-development deal, is one that is based on a lie: the U.S. Trade Representative cannot deliver on zero tariff-quota for least developed countries’ goods, which is a key element of this proposal, without congressional approval, and Congress opposes the proposal. Given the U.S. Congress is in a protracted budget crisis and the White House’s budget is never approved, this is merely a pledge to ask Congress AGAIN to fund something that USTR had asked for in the past.
What we are talking about is a proposal that will increase the indebtedness of Least Developing Countries to the North. Proposals to increase Aid for Trade funding, like today’s announcement from the U.S., will require damaging concessions in the form of tariff reductions from developing countries in return. Such a trade-off would undercut efforts to promote development. Mounting evidence clearly shows that increased trade liberalization does not benefit most countries, particularly developing countries.
Aid should be unconditional on both international and domestic trade policy. It should be demand driven, based on the priorities of the countries themselves.
From a European perspective, the aid for trade is a package of lies. Duty Free and Quota Free has already been given. And the carrot that the Commission wants to provide, it cannot possibly guarantee at a time when member states, especially the British presidency, are talking about slashing European budgets. We have seen through the veiled attempt to distract and shake developing countries and what we have demanded is real development incorporated in the trade agenda itself and not just something that is part of a side show. This is a massive diversion, a sweetened pill for the rest of the package on Agriculture, Services and NAMA.