Black Habits - Africa says world's poorest pay for WTO compromise

JOHANNESBURG (Reuters) - Africans reacted with dismay on Monday to a World Trade Organisation compromise deal on global trade, saying the world's poorest continent would pay the price for the intransigence of rich nations.

"The developed countries once again failed to extend a hand of solidarity to the poor," South Africa's powerful COSATU labour federation said in a statement, calling Sunday's last-minute WTO agreement in Hong Kong an "abysmal failure."

"The situation will remain that it would be better to be a cow in Japan, subsidised for $7 per day, than to be a human being living in Africa."

South Africa's director-general for agriculture Masiphula Mbongwa said successes included plans to drop export subsidies for cotton in 2006 and duty-free and quota-free access for imports from the 49 poorest nations of the world.

"It's not the best but it's all that we need to progress," Mbongwa told Reuters by telephone from Hong Kong.

The Hong Kong deal also included a European Union agreement to end export subsidies by 2013.

"That is too far away. We have proposed, together with our partners, 2010. That was the base that was proposed and of course we could not get that. Better a date than no date," Mbongwa said.

The deal also fell short of broader African demands for access to Western markets and kept pressure on developing nations to open their service sectors to foreigners, a move many fear could strangle their own struggling service companies.

Despite progress on agricultural issues, the tough negotiations left many African analysts wondering if the developed countries would ever agree to give the globe's poorest citizens a place at the economic table.

Chileshe Mulenga, the head of the Zambia's Institute for Economic and Social Research, an economic think-tank, said the limited progress seen in Hong Kong paled in the face of Africa's tremendous economic need.

"It's very sad for Africa that there is not much progress made," he said. "The status quo remains and it means business as usual which is not helping Africa at all."

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The WTO's Hong Kong meeting is the prelude to more negotiation before finalising the Doha free trade round, which must be completed by end-2006.

The hope for Africa, which now only accounts for about one percent of global trade, is that reduced barriers will allow more export earnings for a continent where hundreds of millions of people live on less than $1 per day.

African negotiators went to Hong Kong with few expectations as the United States and the European Union disagreed over timetables and steps for trade liberalisation.

Cotton in particular has become a point of contention, with West African cotton producers such as Benin, Burkina Faso, Chad and Mali demanding a halt to rich nations' export subsidies by 2005 and the scrapping of most other trade-distorting cotton subsidies by 2006.

African anger over the cotton trade was a reason behind the collapse of the WTO meeting in Cancun in 2003 when African delegations walked out -- a move which left observers wondering if the entire multi-year negotiating process was doomed.

While the rich nations did offer some concessions in Hong Kong, in part analysts said to avoid a similar meltdown this year, African farming groups said they did not go far enough.

"We're disappointed the EU didn't move far enough. Although the U.S. made some proposals on cotton ... they helped very little towards (getting) a better price for African countries," said Lourie Bosman, head of South African farming union AgriSA.

Trade analysts said Hong Kong's lacklustre result was a sign to developing countries that they must strengthen alliances if they hope to win a better deal in the final Doha agreement.

A first step may already have been taken in Hong Kong, where 149 WTO member states, including increasingly powerful Brazil and India as well as most of Africa's poorest countries, vowed to "develop a common approach" to future trade talks.

"I would be surprised if developing countries as a whole are prepared to make further concessions if there is not more movement on the part of developed countries," said Sally Baden, a policy adviser in West Africa for aid group Oxfam International.

"That show of unity is encouraging, is a warning shot."