Sino-African State Trading in Services: Added-Value through Angola-Model loaning, GATS commitments or FTAs?

Paper presented by Charlotte Sieber-Gasser at the 5th Annual TRAPCA Conference, Arusha (Tanzania), 25-26 November 2010. Despite the increasing volume of trade between China and African countries, not one single conventional free trade agreement (FTA) or economic partnership agreement (EPA) has yet been signed between an African country and China. Initially, Sino-African trade relations were to a very large extent centred on investments secured through bilateral investment agreements (BITs). The more recent Chinese investments on the African continent, however, are more informally based on FDI contracts with the state at the receiving end and a government-owned private company as the investor, or loosely attached to loans commonly known under term ‘the Angola-Model’. This rather unusual basis for economic integration and development assistance, outside the trodden path of free trade agreements and ODA, requires further analysis in order to understand how the current legal framework between China and the African continent impacts economic development and national sovereignty, and what kind of distributive consequences it may have.

Provenance versus weathering control on the composition of tropical river mud (southern Africa)

This study presents an integrated mineralogical-geochemical data base on fine-grained sediments transported by all major rivers of southern Africa, including the Zambezi, Okavango, Limpopo, Olifants, Orange and Kunene. Clay mineralogy, bulk geochemistry, Sr and Nd isotopic signatures of river mud, considered as proxy of suspended load, are used to investigate the influence of source-rock lithology and weathering intensity on the composition of clay and silt produced in subequatorial to subtropical latitudes. Depletion in mobile alkali and alkaline-earth metals, minor in arid Namibia, is strong in the Okavango, Kwando and Upper Zambezi catchments, where recycling is also extensive. Element removal is most significant for Na, and to a lesser extent for Sr. Depletion in K, Ca and other elements, negligible in Namibia, is moderate elsewhere. The most widespread clay minerals are smectite, dominant in muds derived from Karoo or Etendeka flood basalts, or illite and chlorite, dominant in muds derived from metasedimentary rocks of the Damara Orogen or Zimbabwe Craton. Kaolinite represents 30-40% of clay minerals only in Okavango and Upper Zambezi sediments sourced in humid subequatorial Angola and Zambia. After subtracting the effects of recycling and of local accumulation of authigenic carbonates in soils, the regional distribution of clay minerals and chemical indices consistently reflect weathering intensity primarily controlled by climate. Bulk geochemistry identifies most clearly volcaniclastic sediments and mafic sources in general, but cannot discriminate the other sources of detritus in detail. Instead, Sr and Nd isotopic fingerprints are insensitive to weathering, and thus mirror faithfully the tectonic structure of the southern African continent. Isotopic tools thus represent a much firmer basis than bulk geochemistry or clay mineralogy in the provenance study of mudrocks.

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.