AU: Wipe out all debt

10/01/2019 Posted by admin

The meeting of the African Union summit in Libya will present a “common position” statement to the G8 summit, calling for the debt of all African countries to be forgiven across the board by all creditors and for all agricultural subsidies to be abolished.

About 40 heads of state have been meeting in Libya for the fifth ordinary summit of the AU, which comes just before the G8 summit in Gleneagles, Scotland.

G8 will be given over partly to helping Africa climb out of poverty and to which several African heads of state have been invited.

The AU leaders hailed the US$40 billion debt relief package extended by G8 countries to 18 poor countries, 14 of them in Africa.

But they said debt forgiveness “must be applied by all creditors (multinational, bilateral and commercial), including the African Development Bank” and that “all African countries must benefit from this measure”.

The statement also called for “the abolition of subsidies that stand as an obstacle to trade” and for the adoption of a “calendar” for the abolition of these subsidies.

African nations have long complained that the agricultural subsidies accorded by Western governments, notably cotton subsidies granted by the US to its cotton producers, go against the rules of fair trade and keep African producers in a cycle of poverty.

The statement came as the Financial Times (FT) reported the US had proposed the elimination of it cotton subsidy scheme to comply with a World Trade Organisation ruling in March.

According to the FT President George W Bush’s administration will ask Congress to end the special scheme for cotton farmers known as the Step 2 program.

The WTO has said Step 2 is in violation of world trade rules and has depressed global cotton prices to the detriment of cotton farmers in developing countries.

The scheme has been critical to persuading US cotton buyers to favour domestic cotton over cheaper foreign cotton and also allows US cotton to be competitive internationally.

The FT reported that the US also said it would change the terms of several export credit guarantee programs and has proposed ending others in order to comply with the WTO decision.

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