Legal Aspects of Sino-­African Tied Aid: The Art of Playing with a Legal Grey Area

Sino-African trade has seen a fifty-fold increase in the years 1999 to 2008. In some African regions, particularly in sub-Saharan Africa, China has even replaced the US as the most important trading partner today. But China holds not a single FTA on the African continent, while other major trading partners of African economies rely on an extensive framework of different trade agreements. What is, thus, the legal basis of the recent increase of Sino-African trade? Interestingly, Sino-African trade has seen a particularly strong increase in countries that have entered into tied aid agreements with China. These agreements are commonly known under the term ‘Angola-Model’ and consist of a multifaceted network of barter-trading-systems, aspects of tied aid and concessions for oil and other commodities linked with a state loan. It is likely that these agreements have an impact on the trade-flows between African countries and China. This paper discusses the legal character of this new form of economic cooperation, or modern version of tied aid. Critical legal aspects related to this form of tied aid refer to violation of the principle of most-favoured nation (MFN), illegitimate export subsidies, market access, public procurement and transparency in the international trading system. However, despite the recent outcry of the foremost Western community against the strategy of the Chinese government on the African continent, the practice of the Angola-Model based tied aid is not entirely new, and neither is it against the law. The case of tied aid is situated in a legal grey area that should be examined thoroughly in order to strengthen the international trading system and to support developing countries in their attempt to gain from tied aid arrangements.

The Preferential Liberalization of Trade in Services: African Perspectives And Challenges

This chapter takes stock of the state of play of preferential trade negotiations in services in Africa. It explores the factors that lie behind the reluctance of African governments to bind service sector policy under international treaties. The chapter chronicles several ongoing initiatives aimed at deepening intra-regional trade and investment among the eight regional economic cooperation areas found on the continent. It also describes external liberalization efforts engaging Africa with the rest of the world in services trade, devoting particular attention to negotiations underway with the European Community (EC) with a view to concluding WTO-compatible Economic Partnership Agreements (EPAs). The chapter draws attention to several novel features of the EC-CARIFORUM EPA in the services field and discusses its possible implications for Africa’s ongoing processes of integration in services markets at both the intra- and extra-regional levels. The chapter concludes with a broader discussion of a range of policy challenges confronting African governments in designing development-enhancing strategies of engagement in services trade negotiations.