Union seeks to boost flagging trade with continent

Date: 30/03/2000

By Shada Islam

EFFORTS to boost the EU's flagging trade links with African nations will get priority attention at next week's summit.

But Union leaders will also use the get-together to urge African governments to play a more active role in the World Trade Organisation and work harder to promote stronger intra-African trade.

EU and African diplomats preparing for the Cairo summit say speeding up Africa's integration into the global economy will be one of the meeting's key objectives.

The economic agenda will also focus on ways of promoting Euro-African investment flows, encouraging business-to-business links and helping in the transfer of technology to Africa. In addition, the continent's difficulties in servicing foreign debt - and the impact of the debt burden on local development plans - will come under the spotlight.

The summit will offer the first-ever opportunity for the Union to take a broader view of its trade relations with the African continent as a whole. The EU has traditionally dealt separately with sub-Saharan African nations and with the Arab countries in the north of the continent. This difference in approach is unlikely to change, given the two regions' very dissimilar development needs and priorities. But in both cases, the focus has shifted to fostering free trade with Europe.

Despite the Commission's ambitious goal of dragging Africa into the world economy, recent statistics reveal a marked lack of dynamism in Euro-African trade.

Figures from the EU's statistical agency Eurostat show that African nations exported €55 billion worth of goods, mainly commodities, to the Union in 1998, while European exports to the region totalled €60.4 billion. In both cases, trade flows dipped by 6-8% during the first six months of 1999.

Equally significantly, trade between African countries remains at a very low 6% of the continent's overall trade. "The potential for intra-African trade is under-realised," said one EU official.

This could change in future, however.

The WTO noted recently that an increasing number of African countries were opening up their trade and investment regimes, in most cases as part of structural adjustment programmes agreed with the International Monetary Fund. These efforts are being complemented by a revived impetus towards the development of regional integration.

However, in recent trade policy reviews, the WTO - like other international agencies - has been urging African governments to boost private-sector development and step up the fight against corruption, arguing that this will help boost trade flows and investments.

Trade Commissioner Pascal Lamy is expected to use the Cairo summit to press for African support for launching a new round of global trade liberalisation talks. Egypt, which has traditionally taken a tough line on the inclusion of new issues such as labour standards and environmental norms in new trade negotiations, is seen as a key player in the WTO.