The World According to Freya: I’m on SALE!

torek, 14. julij 2009

I’m on SALE!

A short word of notice: I know my first ‘’normal’’ post on this blog was somehow about shopping (for all who don’t speak Slovene – and btw you should learn immediately, as it is the next lingua franca of the world – it was about my passion for flea markets, especially in Berlin) and obviously this one is also. So I apologize to all of you who despise the consumerist society we live in (I do to, but hey…those shoes, those fabulous shoes), but I simply have to… Anyway…

Today the big summer sales started. I usually do the shopping the last day of the sales as, strangely enough, obviously nobody likes what I like and I always get exactly what I want in my size when there’s literally nothing else left in the shops. But today was the day when I was the first shopper*under*cover in the stores, gathering info about how many people actually took the day of from work to hit the shops (oh yes, I earn my shoes working as a journalist). To sum it up: nobody, or very few – good for them. So, I was free to wander around, contemplate my own shopping habits, but unfortunately with my visa card in the bag (my normal account of course empty). Before I left home, I’ve made a strong commitment to myself – no shoe stores (I know my weaknesses too well) and no stores with really good merchants (they’re very few anyway). I managed that. But I didn’t manage my lust for, according to my budget, expensive stuff, suddenly at hand (50% or more off). Not really, according to my bank account, but I’ve always been really bad with money. I was really shocked at myself, it was as if some beast has awoken inside of me, I wanted it all, Liu Jo pants, Max Mara blazer, H.Boss business suit, Donna Karan snickers, Desigual stuff to wear in front of my computer (just how crazy is that????). Seriously, like I would ever wear anything of that, where to anyway???? Believe me there is not one single designer item in my closet. But my palms were really sweaty when I saw those snickers … And I wanted it expensive. Hey, it’s on sale, it’s not that expensive… these thoughts were running trough my brain as if I was a heroin addict, hey it’s not dangerous, I don’t have a problem. Up until one very sobering moment. In between the stores one old lady tapped me on the hand, I could hardly notice her, so drowned in my fantasy world, and quietly asked me if I had some change. It was like a slap at my face, and it hurt. I woke up. I looked at her, older woman that could pass as a real lady in that Max Mara outfit I just saw, with that look in her eye when you can feel she doesn’t want to do that, to beg. And for a moment I saw my own future, future of any of us and I felt as weak as never before. I opened my wallet and guess what… it was empty. I felt so ashamed. What is the difference between me and her? A small piece of plastic. I don’t really have anything, but I have this small piece of plastic, that can make my life miserable. Soon, very soon. I gave her a pack of cigarettes instead. And went home. No, I didn’t cry, I wasn’t depressed, nothing that pathetic… I was relieved. I’ve realized, it’s not all that stuff that’s on sale, it’s me who is on sale. I’m on 50% or more off … But I don’t want to, I refuse to be on sale. I got my self a very much needed pair of jeans and I’m sitting here in my old, worn out, but very comfy sweatsuit. And I feel good about myself. I always took pride in that I can pull it off very well wearing cheap clothes and I intend to keep it that way. And if anybody has a problem with me not wearing designer clothes, well too bad… You won’t see me in those anytime soon… You might see me in a nice pair of heels though, but it won’t be Jimmy Choo.

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A partnership between a horse and its rider (2007)

African Growth and Opportunity Agreement (AGOA) as well as Cotonou Agreement were signed in 2000 and one of the aims of both agreements was to transform the existing trade and development relations with developing countries so they would comply with WTO rules. And WTO is a very important element in understanding the trade regimes between US and ACP countries and between EU and ACP countries because observing trough the lenses of WTO we can see the importance of both agreements for the EU-USA trade relations.

WTO is the only major international organization of which EU is a member and is an important forum which showed persisting disputes are present in EU-USA relations. And this forum is becoming increasingly important for developing countries. The ministerial conference in Seattle 1999 was a complete failure due to deadlocked dispute between EU and USA on agriculture, and it was a demonstration of determination of developing countries to be included in the decision making process. With the launch of Doha development round in 2001 EU built an alliance with developing states, but it didn’t last. It collapsed at ministerial conference in Cancun 2003. The USA was also left with no allies, but it didn’t even look for them. As Paige (2004:3) puts it: “The EU had succeeded in protecting its priority position, agriculture, but at the cost of making it evident that this interest was more important to it than helping developing countries to achieve a ‘Development Round’: a serious setback in its multilateral trade strategy.”

Though the official reason of EU for changing the agreements of Lome to the Cotonou was compliance with WTO rules, another reason is also often cited. Namely, the shift in the European interests towards Eastern Europe and Asian markets, especially China. If EU wanted to make these regions or countries most favored nations, the benefits of ACP countries had to be reduced. As Gillson and Grimm (2004) observe, developing countries supplied 10% of EU imports in 2001, but there was a considerable shift in EU market share among these countries. ACP countries exports to EU stagnated on one hand at around 27 billion $ (40% of their total exports) for almost three decades while China became the third largest exporter to the EU (3% of total EU imports). Also imports from other Asian countries have been growing. Besides, the now reciprocal trade agreement enabled EU to secure African markets, while excluding the US from these.

Also in connection to AGOA some hidden agenda of the US administration can be observed. As it is declared on the official web-page : “AGOA can change the course of trade relations between Africa and the United States for the long term, while helping millions of African families find opportunities to build prosperity”. But does it really? One of the most important roles of the state in the free trade environment is to negotiate the competitiveness of its own corporate production, what is exactly one of the hidden goals of the US Trade and Development Act. As Thompson (2004:461) points out, many US corporations supported AGOA and their goal is increasing imports of low cost primary commodities from Africa’s wealth. And besides, the purchasing power in Sub-Saharan Africa (SSA) is so low, American production can not really count on its market for US goods.

And there’s another point that contradicts the official lines of AGOA. While AGOA promotes foreign direct investment (FDI), the US invested less than 1% of its FDIs in the SSA, according to US department of Commerce. Moreover, from SSA US imports mostly petrol products that account for around 80% of total imports from that region. It’s worthy a mention that US administration plans to import more oil from west Africa by 2015 than it currently imports from the Middle East region. The first impetus for AGOA so seems to be further access to African resources, including cheap labour.

In words of Thompson (2004: 459): “The WTO is really a bilateral agreement between the US and the EU, with the rest of the world required to sign on. A major goal of this and the other trade instruments, such as AGOA, is to remove barriers to accumulation for global corporations.”

There are some realistic interests of both the USA and EU hidden behind the official agendas of presented agreements, and they’re economic ones that would primarily benefit the USA and EU. So the genuine development of African countries stays far behind the primary economic interests of EU and USA, although much declared.

But why is this important, it’s only logical that countries firstly look after their own interests. The answer doesn’t however lie in some humanitarian or altruistic idea. Real and not just declared interest in development of the least developed countries should also be in realistic interest of developed states, mainly USA and EU. And not just economic interests but also in security department. Security, security, security, mantra of western leaders. But underdevelopment, especially in Africa is a real threat to security. EU is facing major difficulties with the immigration inflow from Africa, to mention just one but obvious problem, the US observes increasing threat of terrorism, originating in Africa and the corporations are already targets of attacks, if I just mention Nigerian oil workers here. All this results among other from poverty, unemployment, discontent, feeling of being exploited. And the western world, namely ex-colonial powers, witnessed the destructive consequences of such an atmosphere in Africa on the eve of independence of African states in the 50’s and 60’s.

But there lies a cause of one of the differences between the agreements. In the parts, dealing with political dimensions we can see that the US is once again practicing their hard power, simply demanding fulfillment of certain conditions to be eligible for AGOA, while the EU is introducing the concept of partnership.

Under AGOA an elected African government cannot choose its own form of economy if it wants to trade with the USA. Among other conditionalities there are respect for human rights, as defined by the US, and respect for workers’ rights, including child labour. Given that the president of the USA will judge whether the rights are honoured and given the history of US financing governments with gross violations of human rights, the obligation to implement these conditionalities will depend on how close a country is with the USA politically. As part of the conditionalities, the US requires that an African country wanting to trade should not undermine US national security or foreign policy interests. There is no mention that the US will do the same for the African trading partner. This provision according to Thompson (2004:457) “hinders African states’ sovereignty and denies their freedom of association and trade”. This point proved especially problematic in February 2003 when the Bush Administration put a huge pressure on Angola, Guinea and Cameroon in the United Nations Security Council to support the US invasion of Iraq, in violation of international law.

The EU in Cotonou Agreement on the other hand emphasizes the “partnership”, mostly by using a word a lot, and by increasing the level of participation and inclusion of non-state actors as well as by strengthened political dialogue. But in practice partnership doesn’t come out as one would imagine. The agreement “allows the EU to protect European interests while also facilitating mini regime change in African countries, in accordance with EU values and standards”, according to Farrell (2005: 270). And with Cotonou the violation of these standards can lead to suspension of cooperation or even aid. So for the partnership embodied in Cotonou can be said what former prime minister of then Southern Rhodesia Godfrey Huggins said about partnership between white minority and black majority: “It is a partnership between the horse and its rider”.

AGOA and Cotonou Agreement rest firmly on the shoulders of neoliberal economic theory that promotes free trade and free markets as a driving force behind development. The mantra of both is “trade not aid”, poverty reduction via trade and a very strong political component, incorporated mostly in conditions for eligibility.

In contrast to official reports about AGOA, empirical findings, that are actually regularly updated on the official web page though so dispersed that at first give the impression that Africa actually profits a lot because of AGOA, demonstrate that the positive impacts are concentrated in one sector (petrol products) and in only six out of 38 beneficiary countries. AGOA overall does not stimulate the macro-economies of African countries nor improves economic and by that living conditions of the people there.

And what the EU is promoting in the Cotonou agreement is a model of economic liberalization across Africa, while trying to secure continued market access in the continent’s emerging markets. EU is besides that with its policy less interested in alleviating poverty and promoting stability than in it’s own geopolitical and economic interests and that could achieving economic liberalization or securing long term development of these countries.

So the genuine development of African countries stays far behind the primary economic interests of EU and USA, although much declared. Even the most conservative authors and institutions like World Bank are warning of lack of pro-development policies promoted with both agreements and lack of effects that lead to reduction of poverty (see: Hinkle, Hope, Newfarmer).

If the development is to be achieved through trade, African countries should be first of all allowed and enabled to start benefiting from their own wealth.

The most recent event on the topic discussed in this paper happened on January 15 and 16 2007, when African trade ministers met in Addis Ababa to discuss African trade and development. They adopted a united front for global trade talks and called on Western countries to scrap agricultural subsidies and allow African imports to compete. But World Trade Organization (WTO) Secretary-General Pascal Lamy warned them against pushing too hard in trade negotiations because the failure of the Doha round talks would hurt poor economies most. A deputy U.S. trade representative at the WTO Peter Allgeier was then very quick to defend US trade policy towards Africa by citing AGOA, from which African trade supposed to have benefited a lot. And Germany, which at that time hold the presidency of the Group of Eight and the European Union, has pledged special attention that would help boost African development. Both stories already heard over and over again.

The World According to Freya

torek, 14. julij 2009

I’m on SALE!

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A partnership between a horse and its rider (2007)