By Demba Moussa Dembele
DAKAR, Aug 29 2014 (IPS)

A few years ago, nobody could have imagined that some 50 Heads of States and Prime Ministers from Africa would meet the President of the United States for a summit. Yet, the first Africa/United States Summit took place in Washington from August 4 to 6, making headlines around the world.

It is obvious that geopolitical considerations were behind this summit, with the shadow of the BRICS (Brazil, Russia, India, China and South Africa) hanging over the meeting.

Demba Moussa Dembele

The United States would have never organised such a summit if the global balance of power had not been gradually shifting towards emerging powers, notably towards China and the BRICS.

Western economic domination is being eroded, as illustrated by the deepening crisis of the Eurozone and the worsening deficits of the United States. Meanwhile, the BRICS are increasing their economic and financial weight in the world economy, and represent about 20 percent of the world’s GDP and 17 percent of world trade, with China now the second economy behind the United States.

For most observers, the BRICS Summit in Fortaleza and Brasilia (Brazil) in mid-July heralds a new world monetary and financial order in the next decades or so. Observers from the South and the West are predicting the gradual shift to a new balance of monetary and financial order, with the BRICS at the centre.“Growing China-Africa ties are a disturbing development for Western countries, the European Union (EU) and the United States. They view these relations as a threat to their “traditional” neo-colonial relationships with Africa”

Indeed, the decision to set up the BRICS bank and the Contingency Reserve Arrangement (CRA) is seen as a serious challenge to the World Bank and the International Monetary Fund (IMF), which have been the tools of Western countries for more than half a century. They will gradually become more and more irrelevant to developing countries, as these increasingly turn to BRICS’ financial institutions.

On the other hand, China and the other members of the BRICS group are challenging the hegemony of the U.S. dollar through several swap arrangements, aimed at boosting their trade by using their own currencies. One of the most significant arrangements is the swap between China and Russia, when one takes into account the 400 billion dollars gas deal signed between Russia’s Gazprom and the China National Petroleum Corp. (CNPC).

The French online newspaper, Mediapart (July 5, 2014), reported that in the oil and gas sector, the top three investors in 2013 were all from the BRICS – PetroChina (50.2 billion dollars), Gazprom (44.5 billion dollars) and Petrobras (41.5 billion dollars). The first Western company was Total, which ranked seventh with 30.8 billion dollars.

It is obvious that these developments are of great concern to the United States, especially in light of the BRICS’ drive to strengthen their economic and financial relations with Africa and South America.

In a 2013 report, the United Nations Economic Commission for Africa (UNECA) indicated that Africa’s trade with the BRICS had doubled since 2007 to 340 billion dollars in 2012. It projected that the trade would reach 500 billion dollars by 2015.

Trade between China and Africa is estimated at about 200 billion dollars in 2013. It has become Africa’s main trading partner. And most African countries are now turning to China for loans while Chinese companies are involved in building roads, bridges, and other infrastructures across Africa.

Growing China-Africa ties are a disturbing development for Western countries, the European Union (EU) and the United States. They view these relations as a threat to their “traditional”, neo-colonial relationships with Africa.

While the European Union has tried to lock African countries into Economic Partnership Agreements (EPAs) – as part of a scheme to create a free trade area (FTA) between the European Union and the African, Caribbean and Pacific (ACP) group of countries – since 2007, the United States seems to be “wakening up” only now to the reality of the fast-changing economic landscape in Africa.

A Paris-based magazine, Jeune Afrique, wrote that with this Summit, Barack Obama was organising a “catch-up meeting”. The reason, said the magazine, was that the United States has lost too much ground to China and to a lesser degree to Europe. It is estimated that trade between Africa and the United States doubled between 2000 and 2010, while trade between Africa and China increased twenty-fold over the same period!

Most observers believe that without China building strong and growing economic and financial ties with Africa, the United States would not have thought about organising such a Summit. Clearly, China’s role in Africa has given a greater “respectability” to the continent and elevated its standing with Western countries, which are now looking at Africa through a new light.

Catching up for will not be an easy exercise for the United States. For one thing, its imports from Africa are essentially composed of crude oil, which accounts for 91 percent of total trade. Second, in its relations with Africa, security concerns have always topped the U.S. agenda.

This is why during the George W. Bush Administration, the United States set up “Africa Command” (AFRICOM) with the view to “helping” African countries fight “terrorism”. And the aim is to move AFRICOM headquarters – now in Germany – to Africa, preferably in the Gulf of Guinea, which is home to the bulk of African oil reserves. U.S. companies, like Chevron and ExxonMobil, have already invested billions of dollars in the area in order to control huge chunks of those reserves.

At the end of the Africa-U.S. Summit, Obama announced that 33 billion dollars will be invested in Africa between 2014 and 2017. But only seven billion dollars will come from public funds in order to boost trade between the United States and Africa, 14 billion dollars will come from the private banking and construction sectors, while 12 billion dollars are part of the “Power Africa” project aimed at bringing electricity to households and the industrial sector. This programme is financed by the World Bank and U.S. private companies such as General Electric.

So, the 33 billion dollars announcement is not really a “gift” made by president Barack Obama to African leaders, as some newspapers erroneously presented it. It will essentially serve the interests of U.S. private companies in their drive to compete against BRICS and European companies in Africa.

But, beyond “catching up” with China and the European Union, the Africa-U.S. Summit should be viewed in the context of the discourse on “Africa Rising”. Indeed, for neoliberal ideologues, Africa seems to hold the solution to the crisis of global capitalism.

In January 2014, Japanese Prime Minister Shinzo Abe toured Africa. In a speech at the headquarters of the African Union, in Addis Ababa, he was quoting as saying that “with its immense resources, Africa is holding the hopes of the world.” This was an echo to a report by the French Senate, released in December 2013, with the incredible title ‘Africa is our Future’.

This may explain French military adventures in Africa over the last several years, from Cote d’Ivoire to Libya, from Mali to the Central African Republic, among others.

Several forums are being organised to advise Western corporations to invest in Africa and tap into its resources. Apparently, Africa has become the “new frontier” of global capitalism, at the expense of its own people. As the renowned Egyptian economist Samir Amin used to say: “the West cares about Africa’s resources, not about its people.” (END/IPS COLUMNIST SERVICE)

(Edited by Phil Harris)

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By Demba Moussa Dembele, Lucy Komisar, and - -
DAKAR, Jul 20 2010 (IPS)

Since 2002, African countries have been negotiating with the European Union (EU) a new framework of cooperation called Economic Partnership Agreements (EPAs). These are supposed to replace the Cotonou Agreement, which is the current basis of the relationships between African, Caribbean, and Pacific (ACP) countries and the EU. However, instead of negotiating with the ACP countries as a group, as had been the case in all previous agreements, the EU decided that the EPAs would be negotiated with each of the three regions of the ACP group individually.

In Africa, the EU went even further and imposed negotiations with the sub-regions of the continent. Initially, the European Commission (EC) had set December 2007 as a deadline for the signature of the EPAs with African countries, but all African heads of state rejected it.

In the different regions, some countries had signed what the EC called “interim EPAs”, mostly on trade in goods. So far, not a single African region has signed a full partnership agreement. However, civil society organisations (CSOs) as well as some intergovernmental organisations, such as the South Centre, are questioning the legality of these interim EPAs under the World Trade Organisation (WTO) law.

The EC had pinned its hopes on the East African Community (EAC) – Burundi, Kenya, Rwanda, Tanzania, and Uganda- which had given indications that it might sign before the end of June 2010. However, under pressure from civil society organisations and public opinion, EAC leaders backtracked at the last minute and the signing was postponed.

In Central Africa, Cameroon had initialled the interim EPA in 2007 and signed it in January 2009. However, its implementation has been postponed twice. Recently, the sub-region has expressed its willingness to continue the negotiations with the view to reaching a full EPA. But in the other sub-regions, there is still a big gap between both parties.

Southern Africa initialled the interim EPA at the end of 2007. Since then, Botswana, Lesotho, and Swaziland have accepted to sign interim EPAs but have not implemented them. This leaves other countries of the sub-region under pressure from the EC. This is especially the case for Namibia, which is the most vocal opponent of signing. Recently, Southern African countries have pledged to sign a much scaled-down EPA before the end of 2010. The announcement was issued following concessions made by both parties in an attempt to bridge the gap between them.

In West Africa, Cote d’Ivoire and Ghana initialled the interim EPA but all other countries there, including Nigeria, refused. In November 2008, Cote d’Ivoire went a step further by signing an interim EPA. Negotiations have been going on at the sub-regional level. However, the Cote d’Ivoire interim EPA has obviously weakened the negotiating position of the sub-region.

The sub-regional roundup shows that two and half years after the December 2007 deadline, the EC has not been able to convince African countries that the EPAs are “beneficial” to them. African countries and the EU have divergent positions on such issues as the content of the EPAs, the level of compensation for fiscal losses, the scope of trade liberalisation in goods, the Most Favoured Nation (MFN) clause, liberalisation of the services sector, export taxation, the period of transition to full liberalisation, etc.

For African countries, the EPAs should be development-oriented whereas the EC seems to focus on trade and financial liberalisation. In the African view, a development-oriented agreement should have the following objectives: 1) develop domestic productive capacities; 2) remove supply bottlenecks; 3) contribute to export diversification; and 4) strengthen regional integration.

But the EC seems more interested in opening up African markets to European goods and services and securing guaranties for European investments. Moreover, the EC is insisting that African countries liberalise their services so that European multinationals might be in a position to control a big chunk of that market.

Regarding specific issues associated with the implementation of the EPAs, African countries have raised the issue of financial compensation for fiscal losses that would result from trade liberalisation. For many developing countries, especially in Africa, import taxes constitute a big part of fiscal revenues. For instance, it is projected that by 2015 Senegal would lose more than 175 million euros. Yet, the vague promises made by the EC are not reassuring.

The EC is pressuring African countries to open up their services markets to European multinationals. However, all African sub-regions have so far rejected this demand and want the negotiations to focus only on trade in goods. In view of this fierce opposition, the EC has agreed to postpone discussions on this issue until later.

African countries are demanding a longer transition period during which asymmetrical trade would be in place, while the EU is calling for a shorter period, except for the so-called “least developed countries” (LDCs).

The MFN clause is another contentious issue. The EC is insisting that African countries grant the EU MFN status, whereas African countries see this as limiting their freedom in their relations with other Southern countries, especially China. The EC wants to have European countries granted the same privileges as would be granted to China or any other “emerging” country. African countries have resisted this demand and made it clear that their relations with these countries should be seen as part of South-South relations.

The current economic and financial crisis has exposed the utter failure of the neoliberal system and discredited the IMF, the World Bank, and the WTO, which have been among the most vocal promoters of market fundamentalism. The crisis reflects the structural flaws of “free trade” policies and unregulated capital flows and should therefore be interpreted by African policy makers as a warning sign of what is in store for their countries if they enter into a “free trade” agreement with the EU. (END/COPYRIGHT IPS)

(*) Demba Moussa Dembele is Director of the African Forum on Alternatives (Dakar).

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