UK to increase trade to Africa to $750m by 2010

This is according to the UK Permanent Under-Secretary of State for Trade and Consumer Affairs, Gareth Thomas.

"The UK has been fostering trade in Southern Africa intended to unlock internal barriers,” said Thomas adding that since 2005 they have increased the export of nuts, tea and coffee by 1500 tons.

"This is just one of the examples of 'Aid for Trade', and we will be spending about $750 million in Africa by 2010," said Thomas said on Monday, 7 July 2008.

Trade agreements

EPAs are agreements entered into by each African country, committing to certain trade agreements with the European Union (EU), in an effort to create free trade areas (FTAs).

South African Minister of Trade and Industry Mandisi Mpahlwa told reporters recently that South Africa has not yet signed an EPA because it was not conducive to Southern African Development Community (SADC) integration.

Thomas highlighted that crucial to economic growth and increased trade is a global trading system that is open, fair and relatively simple.

This will help deliver economic growth and job creation that Africa needs.

SA a crucial player

South Africa is the most significant source of investment in Africa delivering about $1 billion a year to Africa.

"South Africa is pivotal to the success of the World Trade Organisation's (WTO's) Doha talks.

“We risk losing the gains made in market access that is already on the table, as well as the reduction of trade barriers," he said.

World economy set to double

Increased trade and economic growth has unprecedented potential for growth, Thomas said, adding that economists believe that the world economy will double in size in the over the next 25 years.

This would result in the creation of a billion new jobs, but also a wider gap between the rich and poor.

Liberalisation key to reducing poverty

Trade liberalisation and the opening up of economies has accounted for a reduction in poverty by 80% worldwide accounting for about half a billion people.

Growth in South Africa's economy in the 1990's coincided with its trade liberalisation, Thomas said.

Sub-Saharan trade minimal

Sub-Saharan Africa's trade with other regions was minimal, said Thomas, and it was not suprising then that the region was also the least likely to attain the Millennium Development Goals (MDGs) by 2015.

"We want to work with you [South Africa], not only through the WTO's Doha round of talks, but through the EPA discussions.

"Of particular concern to us is the effect of EPA's on regional integration [and as such] regional integration is a priority for us.

"To help ensure this is possible, we will be encouraging the commission to be flexible for the second round of talks [between the EU and Africa]," he said.

Increase trade, decrease poverty

The European Union (EU) will be looking to convince many African countries of the advantages of opening up their economies, reducing import duties and creating FTAs.

Also, developed countries, the United States in particular, is being criticised for the subsiding of agricultural products making it increasingly difficult for developing countries to enter the US market, said Thomas.

If Africa wants to see decline in the rampant levels of poverty which prevail on the continent, then there needs to be increased levels of trade, followed by economic growth concluded the under-secretary.

Article published courtesy of BuaNews