G-8 Summit Agreement
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RAY SUAREZ: Now, measuring the results of this week’s G-8 summit of industrial leaders.
In a summit colored by Thursday’s terror attacks in London, G-8 members closed their meeting today with progress on some, but not all, of the major issues on their agenda. Advocacy groups immediately pointed out the shortcomings of agreements on African aid and climate change. But British Prime Minister Tony Blair, the summit chair, argued it had been a successful meeting.
TONY BLAIR: We have made significant progress, and despite obviously being overshadowed by terrorism I think and hope we did demonstrate that there is a better and more hopeful way of doing politics in the future.
RAY SUAREZ: The Group of Eight agreed to sign a joint statement on terrorism in the wake of yesterday’s attacks, but there was far less agreement on global warming. Opposition from President Bush thwarted efforts to get the U.S. to commit to firm targets for reducing greenhouse gas emissions, blamed for warming the Earth’s atmosphere. President Bush explained his position in Scotland yesterday.
PRESIDENT GEORGE W. BUSH: Actually I’ve set targets. You know, the targets I’ve set are based upon efficiency standards that we would reduce greenhouse gases by 18 percent relative to our economic growth, and we’re meeting those targets. What I didn’t agree to was a way forward that, one, would have endangered our economy, and a way forward that excluded developing nations. I think there’s a better way.
RAY SUAREZ: Today, Blair acknowledged there will be no progress on climate change without the participation of the United States and the emerging economies of China and India. Still, he argued there had been advances at the summit.
TONY BLAIR: We do not hide the disagreements of the past, but we have agreed to process with a plan of action that will initiate a new dialogue between the G-8 countries and the emerging economies of the world to slow down and then in time to reverse the rise in harmful greenhouse gas emissions.
RAY SUAREZ: Blair, who left the summit temporarily because of the attacks, kept the meeting’s primary focus on poverty in Africa, an issue he’s championed in recent months. He announced today that aid to the troubled continent would rise from the current planned $25 billion to $50 billion by 2010.
TONY BLAIR: It isn’t the end of poverty in Africa, but it is the hope that it can be ended. It isn’t all that everyone wanted, but it is progress, real and achievable progress.
RAY SUAREZ: But there was debate over how much progress had been made.
CAROLINE SANDE-MUKULLRA: The comprehensive package that Africa required to really, decisively fight poverty on the continent has not been reached by any means at this summit.
RAY SUAREZ: Blair and his colleagues also endorsed a deal, reached last month, to cancel the foreign debt of 18 of the world’s poorest nations; 14 of them are in Africa. The Group of Eight also agreed to end farm export subsidies, a major demand of African nations who suffer when rich countries help their own farmers by making exports from developing countries more expensive.
RAY SUAREZ: To discuss the G-8 meeting and today’s agreement on Africa, we’re joined by Susan Rice, senior fellow in foreign policy at the Brookings Institution. She was assistant secretary of state for African affairs in the (Bill) Clinton administration. And Marian Tupy, assistant director of the Cato Institute’s Project on Global Economic Liberty; he studies the economies and politics of sub-Saharan Africa.
RAY SUAREZ: And, Marian Tupy, do you agree with Prime Minister Blair, who put a lot of his own personal stock on the line in this summit and put a lot of emphasis on these major themes, that there was significant progress made at the summit?
MARIAN TUPY: He’s achieved some things that he set out to achieve, namely debt relief. I do think that is a step in the right direction because I don’t think it is just that Africans should pay debt, which was really accumulated by corrupt dictators who have stolen it and African people have never seen any benefits arising from the debt. So I think it was a step in the right direction.
I’m rather disappointed that more progress wasn’t made on trade liberalization. Clearly Africa continues to suffer, in part, because in the United States, in Europe, and in Japan, we subsidize our farmers, we impose quotas and tariffs on exports from Africa, and that is something that I wish the G-8 took seriously and produce some kind of progress. But we haven’t seen that.
RAY SUAREZ: Susan Rice, did this G-8 summit live up to Tony Blair’s dreams?
SUSAN RICE: I don’t think it lived up to Tony Blair’s dreams, which were quite ambitious. It fell substantially short of what Blair had hoped for. He wanted all countries to commit to providing 0.7 percent of their gross national income by 2015 for development assistance. He wanted an international finance facility. He wanted agreement to an additional $50 billion, not just $25 billion, by 2015. But he did get some progress on debt, as Marian said.
I think on the trade side, what we have is a rather general agreement in principle to reduce or eliminate agricultural subsidies. That’s positive, but the proof will be in the WTO ministerial in December whether concrete progress is actually made. I think Blair got something. I’d say it’s more than half a loaf. I’m somewhat disappointed that in dollar terms the U.S. contribution to the most important part of the package, an increase of $25 billion in aid to Africa, was very modest. We are contributing, of that pledge, about $4 billion of the $25 billion, and it’s really primarily a repackaging of prior commitments the president has already made, but not yet fulfilled, on HIV, AIDS and his millennium challenge account.
RAY SUAREZ: Susan Rice, why are the pledges on liberalization of trade so hard for the G-8 to follow through on? Both the United States, its North American partner, Canada in the G-8, and the European countries have all been pursuing knocking down tariffs left and right over the last ten years, internally with each other. Why is it so hard for them to look at places like Northwestern Africa, where cotton is a big export crop and say “Fine, bring your cotton in here without tariff”?
SUSAN RICE: Because we have major and powerful domestic constituencies, our big agribusiness, to which we provide a great deal of, frankly, corporate welfare in the form of the 2002 farm bill and prior agricultural support that makes them very much dependent on these subsidies and other support and don’t want to give them up. Some of these — many of the farms, particularly for cotton, are in states whose political support the president’s party relies on. So it’s not a simple political issue.
But what the president has said is, “We will go if the Europeans go.” And frankly, Jacques Chirac and the French have been in many respects the biggest problems. So if we can move the French down the road and the president stakes out a leadership position and does the right thing on free trade, then I think there is some possibility of progress in December at the WTO
RAY SUAREZ: Marian Tupy, we will go if the Europeans go. Does that give everybody an excuse to do nothing?
MARIAN TUPY: Well, Susan is, of course, absolutely correct. We need to do something about trade liberalization. And it is true that Japanese protectionism and European protectionism is, in a sense, a bigger problem than American. President Bush said, I think very courageously and rightly, that he’s prepared to put all subsidies on the table if the Europeans are willing to reciprocate.
And really the thing to do now is to isolate the protectionists and to push the European Union in a more free trade direction. Tony Blair has already been doing that. He puts the reform of the common agricultural policy on the agenda, and he’s going to be tackling this issue during the UK presidency of the European Union.
RAY SUAREZ: It sounds from your earlier remarks like you think the trade liberalization part of this is even more important than the increase in aid by 2010.
MARIAN TUPY: That is exactly what I believe. I don’t think that development aid is the right way to go forward. Africa has received over $500 billion worth of aid between 1960 and 2000, yet its economy contracted by about 0.6 percent per annum between 1975 and 2000. So it doesn’t seems to me — or it seems to me clear that aid doesn’t lead to economic growth, certainly not on the African continent and we have a lot evidence to support that.
RAY SUAREZ: Susan Rice, do you think a conference like this one allows the G-8 to prove its worth in a post-Cold War, 21st Century world?
SUSAN RICE: I think so. I actually think the G-8′s future relevance, and most recent relevance, has been in its ability to concert policies on things like debt relief, on trade and development in places like Africa, where you really do have a collection of the world’s most substantial and powerful donors.
I want to differ a little bit with Marian. I think we need both trade liberalization and aid. I don’t think that it’s correct to look at the billions that were indeed wasted on aid, which really wasn’t development aid but often security assistance to corrupt dictators during the Cold War and conclude that aid doesn’t work. Africa is making progress. Corruption is still a problem in many places, but the leadership is beginning to tackle it seriously. Sixteen African countries grew over the last decade at 4 percent or more, which beats any developed country’s growth record.
There is some reason for hope and I think real reason to believe that aid, properly utilized of a high quality, well targeted, combined with other steps like trade and debt relief can make a positive difference.
RAY SUAREZ: Quick response to Susan Rice, and also an answer on whether the G-8 has proved its relevance.
MARIAN TUPY: Well, the Cold War has ended 15 years ago and with it the way that the west gives aid to the developing world and Africa. And yet in Africa, between 1990 and 2003, we have seen continued deterioration of African economy and continued contraction of African economy.
So I don’t think it’s realistic to expect that geopolitics will end and it will no longer play any role in the way that we give aid. And I think that instead what we need to do is to focus on domestic governance in Africa. We have to tackle the question of lack of private property rights, the lack of economic openness. Africa is the least integrated continent in the global economy and also corruption, which continues to be a major problem in Africa. Transparency International, which publishes a corruption perception index every year, has actually seen a deterioration in corruption in Africa. Between 2000 and 2004, Africa has actually become more corrupt. So to give more development aid I don’t think is going to solve the issue.
RAY SUAREZ: We’ll continue this conversation. Marian Tupy, Susan Rice, thank you both.
SUSAN RICE: Good to be with you, Ray.