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June 14 - 20, 2013


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Africa urged to negotiate with
European Union as a united bloc

'investments and not aid will reduce African poverty'

NAIROBI (Xinhua) -- The United Nations Economic Commission for Africa (UNECA) has urged Africa to negotiate trade agreements with the European Union (EU) as a single bloc.

UNECA Regional Integration and Trade Director Stephen Karingi told Xinhua late on Thursday that negotiating as separate entities will have a negative impact on regional integration.

"If Africa wants to deepen intra-Africa trade then it has to agree on one single template that will be used for agreements with international partners," Karingi said on the sidelines of the 20th African Union Conference of African Ministers of Industry in Nairobi.

The five-day event’s goal is will discuss ways of accelerating industrialization in the continent. Karingi added that only appropriate trade agreements will permit the continent to increase it’s of exports of value added products.

Karingi added that joint negotiations will allow the continent to agree on a list of goods and services that will be exempted from liberalized trade.

According to UNECA, trade with the EU and the U.S. has remained stagnant in the past decade.

"However, trade with emerging nations such as China, India and Brazil has been on the rise," he said.

He noted that key challenges to intra-Africa trade include lack of infrastructure interconnecting the continent. Karingi said that Africa is a fast growing region but is yet to reach its full potential.

"You need at least seven per cent economic growth in order to have a dent on poverty levels," he said.

"For example, 99 percent of Kenya’s tea is exported in bulk form compared to Sri lanka where the figure is only 50 percent," he said.

Common Market for Eastern and Southern Africa (COMESA) Assistant Secretary General Dr Kipyego Cheluget said that lack of value addition is causing the continent to lose a lot of revenue. He said that region could reduce the level of employment through industrialization.

Pan-African Chamber of Commerce and Industry Executive Director Kebour Ghenna said that African governments should take the lead in designing policies that support local manufacturing.

"We should follow the lead of the developed nations which offer incubations and other services to their local industries," Ghenna said. He added industrialization is one way of achieving high incomes.

EU Ambassador to the African Union Gary Quince said that East, Southern Africa and West Africa are still in the process of negotiating trade partnership with the EU.

"I am optimistic that an agreement will be arrived at before October 2014," the envoy said.

Quince noted that despite the Euro zone crisis, EU remains the biggest investor and development partner of Africa.

He noted that investments and not aid will reduce Africa’s poverty.

"We will therefore ensure that our engagements with Africa include a blend of grants and loans to the critical infrastructure areas," he said.

The envoy noted that the EU will continue to support regional integration efforts in Africa as 50 percent of intra Africa trade consists of manufactured goods.

AU Commissioner of Trade and Industry Fatima Acyl said that export diversification is still weak in Africa.

"There is a tendency to specialize on certain products and this could make the continent very vulnerable to price shocks," she said.

"However, there are a few success stories in Africa that the rest of continent can learn from," the commissioner said.

The AU official called on Africa to come up with products that are globally competitive.

South Africa Minister of Trade Rob Davis said that Africa’s international trade comprises of exports of raw materials and imports of finished goods.

He added that this is despite the fact the over 60 percent of world trade relies on intermediate goods.

"Given that global value chains are very difficult to penetrate, the continent should therefore rely regional economic blocs in order to expand manufacturing output," Davis said.

The trade minister noted that Africa’s free trade areas will only benefit the continent if there is sufficient infrastructure to link the continent.

"Otherwise, the big industrialized nations will reap the benefits of the free cross border trade," he said.



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