The Odd Couple continued their Africa tour yesterday, displaying a remarkable degree of bonhomie for two stiff-necked individuals who don't really agree about much -- except that something must be done to improve the continent's sorry situation.
Rock star Bono -- "I am definitely not Felix" -- pressed U.S. Treasury Secretary Paul O'Neill on the need for the Bush administration and other Western governments to significantly boost development assistance. Not much can be accomplished, he insisted at stops in Ghana and South Africa, without substantial aid to build infrastructure and to fund education and health care.
Mr. O'Neill expressed his usual skepticism, although not as obstreperously as in the past. He still thinks largely in Reaganesque terms; the former president also believed that little that ailed Africa couldn't be solved by getting the private sector humming. Development assistance, in their eyes, is essentially a sinkhole.
"If you look back there at some of those textiles, it looks like that could be a substantial business," Mr. O'Neill said after visiting a Ghana market. "I thought the material was beautiful. You give micro-loans to people like this, and they would be on their way."
Well, not quite. Even if one presumes, as Mr. O'Neill, that increased trade is the critical means for transforming Africa, rhetoric and reality remain some distance apart. Despite the best intentions of Prime Minister Jean Chrétien, who made his own Africa tour recently, the effort to help the world's poorest continent has a long way to go.
The summit of the Group of Eight industrialized countries next month in Kananaskis, Alta., is almost certain to include a major initiative for Africa, including debt relief. And Mr. Chrétien is likely to announce his own Africa plan, designed to eliminate trade barriers for the world's poorest 50 or so countries.
"That would be a key building block," said Chantal Blouin, a development specialist at the Ottawa-based North-South Institute.
But hanging over such efforts is the prospect of a bigger failure. The rise in protectionist sentiment in the United States -- especially the huge increase in agricultural subsidies and the imposition of high steel tariffs -- now threatens to paralyze negotiations toward a world trade deal that would help developing countries benefit more fully from the global economy.
The "Doha round" talks have just begun, and aren't to wrap up for 2˝ years. Sergio Marchi, Canada's ambassador to the World Trade Organization, expressed some confidence in a recent interview that they haven't been sidetracked by Bush administration policies.
But others are more fearful, including the International Chamber of Commerce -- which called on G8 leaders yesterday to resist protectionist pressures. "I don't see that the [WTO deadline] has a snowball's chance in hell of being met," one senior diplomat said.
World Bank president James Wolfensohn couldn't help this week but make one glaring comparison -- industrialized countries will spend much more this year, as much as six times more, on agricultural subsidies as on development assistance.
"One cannot solve the tasks of development without lowering the trade barriers," he told a German newspaper.
Isn't it remarkable, though, that tariff and non-tariff barriers continue to hurt the economic prospects of developing countries, and in precisely those sectors where many have a strong comparative advantage over the West -- especially agriculture, and textiles and apparel.
Trade among developing countries themselves remains stunted by border protections, as much as three times higher than those imposed by industrialized countries. Nevertheless, the West has hardly done its part, especially when cheaper imports from developing countries are a clear economic benefit to both.
"The poorest countries face the highest barriers," concluded a recent report by Oxfam.
The organization produced what it terms the Double Standards Index, which charted "free-trade rhetoric versus protectionist practice" in the so-called Quad -- the United States, the European Union, Canada and Japan. Canada generally was less closed than the United States and the EU, but the findings remain jarring nonetheless.
For example, almost one-third of all imports from the world's poorest countries face Canadian tariffs of more than 15 per cent -- twice the rate in the United States. Tariffs on processed agricultural imports are three times higher than those imposed on unprocessed ones. And the average tariff on imports of textiles and clothing is 12.4 per cent, the highest in the Quad.
Mr. Chrétien's plan to eliminate barriers on shipments from the world's poorest countries is actually an effort to catch up to similar initiatives by the EU and the United States.
The EU plan already has been partly sidetracked by agricultural interests, however, and the U.S. plan has now been tailored in a similar way so as not to offend the U.S. textile lobby.
Meanwhile, the United States, Canada and the EU have all pledged to increase development assistance somewhat. But, here too, skepticism may be appropriate. The amount spent last year by all industrialized countries, $51-billion (U.S.), was less than in 2000 and just two-thirds of the amount a decade ago, in real terms.
Bono still hasn't found what he's looking for. Mr. O'Neill is looking more than a little hypocritical. And the long-term impact of Kananaskis looks like an open question.
dfagan@globeandmail.ca
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