Sexual violence against women in Tigray

Article by Alexandra Reinhild Berndt

In Ethiopia’s Tigray region sexual violence against women has dramatically increased. According to Mark Lowcock, the Emergency Relief Coordinator of the OCHA (United Nations Office for the Coordination of Humanitarian Affairs), sexual violence in the Tigray region is “used as weapon of war” (Nichols, 2021). Women’s rights groups confirm this assessment: Saba Gebremedhin, a women’s rights activist from the Tigray region, warned that rape is increasingly used as means of humiliation and dehumanisation against Tigrayan people (Africanews, 2021). Weyni Abraha, another Tigrayan women’s rights activist, also stated in an interview with the BBC that women are raped “purposely to break the morale of people, threaten them and make them give up the fight” (BBC, 2021). In this article I will focus on the situation of women and the reaction the international community and the Ethiopian government.

Cruel reports of sexual violence

In the last weeks and months, more and more cruel stories of sexually abused come to light. There are reports of individuals who were “allegedly forced to rape members of their own family, under threats of imminent violence” (BBC, 2021). Many other women reported that “rocks, nails and other objects have been forced inside [their] bodies” (Walsh, 2021). The physical and emotional injuries are unimaginable. There are women who suffer from “sexually transmitted diseases and injuries that rendered them incontinent” (Houreld, 2021).

Lack of access to medical help

The access to medical help is thus more than ever important to women. According to UNICEF, however, only thirteen percent of the medical facilities in the Tigray region are functional (UNICEF, 2021). Most of the health clinics have been plundered, damaged or destroyed during the conflict (Walsh, 2021). This further exacerbates the situation of affected women. It is more and more difficult for women to get access to medical help, anti-STD medication and emergency contraception (BBC, 2021)

Stigmatization

Dr. Fasika Amdeselassie, a public health official reported that there have been at least 829 cases of sexual assault since the beginning of the Tigray conflict (Nichols, 2021; Houreld, 2021). The estimated number of unknown cases, however, is assumed to be much higher. There are two main reasons for this: lack of medical facilities and stigmatization. Ethiopia is a very conservative country (Clark & Kyte, 2021). Many women are afraid to report sexual violence because rape is highly stigmatized in Ethiopia (Houreld, 2021). Those women who are willing to tell their trauma are exposed to a “risk of reprisal” (Clark & Kyte). Furthermore, officials are sometimes unwilling to report sexual violence due to fear of facing retaliation from the military which “could target them for documenting the crime” (Walsh, 2021). Women are thus increasingly living in a situation of fear and insecurity. Many women who experienced sexual violence are no longer able to “care for their children and support their families” (Clark & Kyte, 2021).  This has devastating effects on children. The calls for support of Tigrayan women and girls are thus getting louder.

International reaction

The increase in sexual violence against women has captured the attention of the international community (Houreld, 2021). France, Italy, Germany, the UK, the US and Canada “condemn[ed] the killing of civilians [and the] sexual and gender-based violence” (Euronews, 2021). The United Nations Special Representative of the Secretary-General on Sexual Violence in Conflict, Pramila Patten, “demanded that the UN act at the highest level to apply resolution 1325 to the crimes in Tigray” (Clark & Kyte, 2021). This resolution (which has been adopted in 2000) calls for the protection of women and girls from violence in conflict (Clark & Kyte, 2021). In April 2021, the Security Council finally agreed on a public statement. The members of the Security Council “expressed their deep concern about allegations of human rights violations and abuses, including reports of sexual violence against women and girls” (Nichols, 2021).

Reaction of the Ethiopian government

In March 2021, Abiy Ahmed, the Prime Minister of Ethiopia acknowledged the atrocities and promised to punish offenders (Houreld, 2021). Furthermore, Ethiopia’s minister of women, children and youth, Filsan Abdullahi Ahmed, initiated a task force to investigate cases of sexual violence (Africanews, 2021). The Ethiopian government thus reacted to the international pressure.

Conclusion

Already in August 2020, Human Rights organizations as Genocide Watch expressed their concerns and warned the international community of potential atrocities (Ochab, 2021). It is thus very sad that it needed so much time for the international community to find a response to the violence in Tigray.

silhouette of person on window
Photo by Maxim Hopman published on Unsplash

References

Africanews. (2021, March 09). Survivors allege rape by soldiers in Tigray. Retrieved May 5, 2021, from https://www.africanews.com/2021/03/09/survivors-allege-rape-by-soldiers-in-tigray/

BBC. (2021, February 15). Ethiopia’s Tigray crisis: ‘I lost my hand when a soldier tried to rape me’. Retrieved May 5, 2021, from https://www.bbc.com/news/world-africa-55832711

Clark, H., & Kyte, R. (2021, April 27). In Tigray, sexual violence has become a weapon of war. Retrieved May 5, 2021, from https://foreignpolicy.com/2021/04/27/in-tigray-sexual-violence-has-become-a-weapon-of-war/

Euronews. (2021, April 02). G7 ‘seriously concerned’ about human rights violations in Tigray. Retrieved May 5, 2021, from https://www.euronews.com/2021/04/02/g7-seriously-concerned-about-human-rights-violations-in-ethiopia-s-tigray-region

Houreld, K. (2021, April 15). Health official alleges ‘sexual slavery’ in Tigray. Retrieved May 5, 2021, from https://www.reuters.com/world/special-report-health-official-alleges-sexual-slavery-tigray-women-blame-2021-04-15/

Nichols, M. (2021, April 15). Sexual violence being used as weapon of war in Ethiopia’s Tigray, U.N. says. Retrieved May 5, 2021, from https://www.reuters.com/world/africa/sexual-violence-being-used-weapon-war-ethiopias-tigray-un-says-2021-04-15/

Nichols, M. (2021, April 22). U.N. Security Council, for first time, declares concern about Ethiopia’s Tigray. Retrieved May 5, 2021, from https://www.reuters.com/world/africa/un-security-council-notes-concern-over-humanitarian-situation-tigray-2021-04-22/

Ochab, E. U., Dr. (2021, February 16). Mass atrocities, including the use of rape and sexual violence, in the Tigray region of Ethiopia. Retrieved May 5, 2021, from https://www.forbes.com/sites/ewelinaochab/2021/02/16/mass-atrocities-including-the-use-of-rape-and-sexual-violence-in-the-tigray-region-of-ethiopia/?sh=17d7701353d3

UNICEF. (2021, April 27). Statement on gender-based violence in Tigray region of Ethiopia. Retrieved May 5, 2021, from https://www.unicef.org/press-releases/statement-gender-based-violence-tigray-region-ethiopia

Walsh, D. (2021, April 01). ‘They told us not to resist’: Sexual violence pervades Ethiopia’s war. Retrieved May 5, 2021, from https://www.nytimes.com/2021/04/01/world/africa/ethiopia-tigray-sexual-assault.html

Sofagate – A serious blow for the European Union

An article by Lea Schiller

It is a video that is uncomfortable to watch – Ursula von der Leyen, the President of the European Commission, is left standing while Turkish President Erdoğan and the President of the European Council, Charles Michel, take the two chairs in the centre of the room in Ankara. This incident is now widely known as “Sofagate”. It turned a meeting meant to improve relations between the European Union (EU) and Turkey into a diplomatic scandal. Side-lining one of the EU’s leaders, a female one at that, to a sofa while the two men self-evidently take the chairs has prompted discussions about sexism and the relationship between the European Commission and the European Council – for good reason. In the following, I will lay out why this situation cannot – and should not – be brushed aside.

Official responses to the incident

Later in the month, von der Leyen gave an impassioned speech to the European Parliament, describing her discomfort in the situation and blaming sexism for the incident: “In the pictures of previous meetings I did not see any shortage of chairs. But then again, I did not see any women in these pictures, either” (Boffey, 2021). It is a strong choice of words – especially when compared to Michel’s response. The President of the European Council claimed the incident was “regrettable”, but also did not apologise in this initial statement on the situation (Gray, 2021). After heavy criticism from women’s rights groups as well as members of the European Parliament, Michel expressed regret and his apologies for the situation (Boffey, 2021). Meanwhile, Turkey’s Foreign Minister put the blame for the lack of chairs on the EU, arguing that the seating arrangement had been made based on the demands made by the EU. Council president Michel however, blamed Turkey’s strict interpretation of the EU’s protocol rules (BBC, 2021). This is a blame game that does not leave either Turkey or Michel in a good light. Turkey, because the agenda for the meeting included Turkey’s withdrawal from the Istanbul Convention of Violence Against Women. Michel, because of his seemingly instinctive decision to sit down while von der Leyen was left standing.

Sofagate and its consequences

Sofagate is no laughing matter, and its ramifications are twofold. Firstly, the EU has made itself vulnerable to scrutiny of the relationship between its Council and its Commission. There have long been rumours of tensions between von der Leyen and Michel (Herszenhorn, de la Baume & Barigazzi, 2021), and this incident has only added more fuel to the fire. Afterwards, Michel struggled to explain his inaction as von der Leyen was left standing – his reasoning being that he did not want to cause a diplomatic incident and compromise the success of the meeting (von der Burchard & de la Baume, 2021). While this is a fair objection to those demanding he should have insisted on a third chair, its argumentative power wanes in light of Michel’s later complaints that the controversy around the situation had overshadowed the actual meeting – a questionable comment from one of the two people who were provided with a chair.  And secondly, the EU has visibly failed to take a stand for women’s rights, and perhaps even more importantly, for respect towards one of its highest representatives.

Why Sofagate affects the European Union as a whole 

Instead of discussing the results of the EU’s talks with Erdoğan, the attention is now on the missing chair, and the clumsy way it was handled by the EU. The European Union was left standing divided between two of its big powerhouses, having failed to stand up for itself and for women’s rights. This comes to show that incidents like these cannot be written off as funny or unfortunate mistakes – they expose a deeper incoherence in the EU’s internal power structure, and they make us painfully aware of the sexism that is deeply rooted in the highest ranks of the EU. Us – that is not only European citizens, but also those working within the EU. In the words of Sophie in ’t Veld, who is a Dutch MEP in Brussels: “Europe will never become a strong, geopolitical force until it learns to stand up for itself by speaking with a single voice” (in ’t Veld, 2021). In the end, it is not only Michel and Erdoğan who have been tainted by “Sofagate”, but the European Union as well.

teal flag under cloudy sky
Photo by Sara Kurfeß published on Unsplash

References

BBC News (2021, April 8). Turkey blames EU in ‘sofagate’ diplomatic spat. Retrieved from: https://www.bbc.com/news/56676344

Boffey, D. (2021, April 26). ‘Sofagate’ snub would not have happened to a man – von der Leyen. The Guardian. Retrieved  from: https://www.theguardian.com/world/2021/apr/26/sofagate-snub-would-not-have-happened-to-a-man-von-der-leyen

Gray, A. (2021, April 7). Charles Michel on Sofagate: Not my fault. Politico. Retrieved from: https://www.politico.eu/article/charles-michel-on-sofagate-not-my-fault-ursula-von-der-leyen-recep-tayyip-erdogan/

Herszenhorn, D.M., de la Baume, M., & Barigazzi, J. (2021, August 29). Presidential power wars: von der Leyen vs. Michel. Politico. Retrieved from: https://www.politico.eu/article/battle-in-the-bubble-ursula-von-der-leyen-and-charles-michel-clash-for-presidential-primacy/

in ’t Veld, S. (2021, April 9). What Sofagate says about Ursula von der Leyen. Politico. Retrieved from: https://www.politico.eu/article/what-sofagate-says-about-ursula-von-der-leyen/

von der Burchard, H. & de la Baume, M. (2021, April 8). Charles Michel on Sofagate: ‘I deeply regret this situation’. Politico. Retrieved from: https://www.politico.eu/article/charles-michel-admits-mistake-in-sofagate/

Witch-hunts in Tanzania

Article by Alexandra Reinhild Berndt

In Tanzania, socially vulnerable and discriminated groups such as the LGBT+ community, elderly women and people with albinism are running the risk of being murdered in the context of witch-hunts. The murder of people who are suspected to be practicing witch-craft is not a new phenomenon in Tanzania: Already between 1960 and 2000, around 40,000 people have been murdered after being accused to practice witch-craft (Müller & Sanderson, 2020). Certain communities try to find a scapegoat for their problems; they try to blame, for instance, “diseases such as HIV/AIDS or female infertility on witchcraft” (Müller & Sanderson, 2020). Tanzania is not the only country facing this problem: witch-hunts are practiced in 36 other countries around the globe (Müller & Sanderson, 2020). In this article, I will focus on the situation of elderly women, people with albinism and the LGBT+ community.

Elderly women

In the last 20 years, thousands of elderly women have been murdered in the context of witch-hunts in Tanzania (Müller, 2020). Most vulnerable are those women who are not protected by their families (Müller, 2020). Oftentimes, poverty plays an important role. If there are no pension systems, elderly women are dependent on the help and financial support of others to make their living; they are thus perceived as a burden. The introduction of a pension system could contribute to a safer environment and provide “an incentive to keep them alive” (Migiro, 2017). According to Migiro (2017), another reason for witch-hunts is land: If the husband of a women dies, the widow has the right to live on the land the husband possessed. Only after the death of the widow, the land can be passed on to male relatives of the husband (Migiro, 2017). This can increase likelihood of attacks. Accusing the widow of practicing witchcraft represents a method to get rid of the women and to get access to land (Migiro, 2017).  Elderly women are thus particularly vulnerable to be victims of witch-hunts.

People with albinism

In comparison with other African countries, the rate of albinism is very high in Tanzania: It is estimated that “around one in 1,400 people have albinism in Tanzania, while in most other parts of Africa it occurs in one in every 5,000 to 15,00 people” (Velton, 2017). Between 2000 and 2017, “around 80 people with albinism in Tanzania have been murdered” (Velton, 2017). People with albinism are believed to be “ghosts or haunted beings” (Chang & Thompson, 2017).

Some parts of the population also believe that body parts of people with albinism can be “used to extract potions against all sorts of ailments” (Müller & Sanderson, 2020). Witch doctors spread the idea that “bones and other organs of persons with albinism if mixed with a magic potion” will make clients rich and successful (Chang & Thompson, 2017). People with albinism are thus dehumanized and exposed to an immense threat.

The LGBT+ community

In 2018, the UN High Commissioner for Human Rights, Michelle Bachelet warned of a “witch-hunt (which) could be interpreted as a license to carry out violence, intimidation, bullying, harassment and discrimination against those perceived to be LGBT” (Burke, 2018). The threat of a “gay witch hunt” has spread a lot fear among the Tanzanian LGBT+ community (Bhalla, 2018). Since President John Magufuli’s election in 2015, attacks against the LGBT+ community have risen (Bhalla, 2018).

Conclusion

Overall, social vulnerability is an important factor (Migiro, 2017). All the mentioned groups (elderly women, people with albinism and the LGBT+ community) are socially vulnerable in Tanzania. These groups need particular protection and support. The pension system for elderly women (which would make them more independent and less prone to attacks) is a good example of how this protection can be achieved.

grayscale photo of human palms
Photo by Om Prakash Sethia published on Unsplash

References

Bhalla, N. (2018, November 01). Gay witch-hunt sparks fear and panic in Tanzania’s LGBT community. Retrieved April 5, 2021, from https://www.reuters.com/article/us-tanzania-lgbt-rights-idUSKCN1N65PB

Chang, J., & Thompson, V. (2017, December 28). Retrieved April 5, 2021, from https://abcnews.go.com/International/tanzanian-children-albinism-hunted-body-parts-receive-prosthetic/story?id=49496498

Migiro, K. (2017, March 21). Despite murderous attacks, Tanzania’s ‘witches’ fight for land. Retrieved April 5, 2021, from https://www.reuters.com/article/us-tanzania-women-landrights-idUSKBN16S2HU

Müller, C., & Sanderson, S. (2020, August 10). Witch hunts: A global problem in the 21st century: DW: 10.08.2020. Retrieved April 5, 2021, from https://www.dw.com/en/witch-hunts-a-global-problem-in-the-21st-century/a-54495289

Müller, C. (2020, August 10). Witch hunts, not just a thing of the past: DW: 10.08.2020. Retrieved April 5, 2021, from https://www.dw.com/en/witch-hunts-not-just-a-thing-of-the-past/a-54509188

Velton, R. (2017, April 25). The ‘silent killer’ of Africa’s albinos. Retrieved April 5, 2021, from https://www.bbc.com/future/article/20170425-the-silent-killer-of-africas-albinos

The EU’s vaccine export controls are only the tip of the iceberg

Article by Lea Schiller

In the last week of March, the European Union once again found itself in a controversy over its vaccine campaign, when the Commission proposed a rule which would give the bloc extensive powers to curb vaccine exports for six weeks. This action received mixed responses inside the EU and criticism from outside of it. But while the critique has valid reasons, the debate around these restrictions is misplaced – because while the EU might be stirring up conflict with other rich, vaccine producing nations, the developing world has largely been left to its own devices. In the following, I will lay out the reasons behind the restrictions, the mechanisms with which they work and the implications they have for the global vaccine trade

What led to the decision to impose export restrictions?

The EU is mainly exporting the Pfizer/BionTech vaccine. The rest of the exports are made up of Moderna and AstraZeneca shots, the latter of which has been the source of many conflicts in the past months. The main problem is that AstraZeneca has failed to meet its contractual obligations with the EU. In the meantime, the EU has been exporting millions of AstraZeneca doses to the UK, with none coming the other way – even though the EU invested thousands of Euros to expand manufacturing capacities in the UK (Herszenhorn & Deutsch, 2021). On top of that, Italian authorities discovered a stockpile of almost 30 million doses of the AstraZeneca vaccine (Martuscelli, 2021). It’s still unclear who these doses were meant for – the Commission has stated that there were no exports planned in the near future, and the company denied that the find was a stockpile in the first place (Martuscelli, 2021). In conclusion – weeks of mistrust between the EU and AstraZeneca, on top of a slow vaccination campaign within the EU have led up to the risky strategy of imposing vaccine export controls.

How do the export restrictions work?

The new rule, which went into force on the last day of March, allows export bans to countries on two conditions. One targets countries that restrict exports of vaccines or raw materials needed for vaccine manufacturing to the EU. The second applies to countries which have a higher vaccination rate than the EU or are experiencing a less severe COVID-19 outbreak. The first part of the regulation is clearly aimed towards the United Kingdom, which practically put an export ban in place when it signed a deal with AstraZeneca that states the company is to supply the United Kingdom first, before it is allowed to ship vaccines to other buyers (Herszenhorn & von der Burchard, 2021). The EU’s new export restrictions will affect millions of doses that are destined for the UK, which could slow down Britain’s fast-paced vaccination campaign.

Why vaccine export restrictions are controversial

Responding to the Commission’s proposal, Britain appealed to collaborative values and stressed that the fight against the pandemic is an international effort (Stevis-Gridneff, 2021). But such statements seem empty when some of the richest nations have been refusing to supply other countries with vaccines since the beginning of the vaccination campaign. The EU’s push for export controls may be ill-advised because it risks retaliation by other countries, specifically those who export the raw materials needed to manufacture the vaccines (Cendrowicz, 2021) – but this is only part of the problem. For one, other developed nations such as US and the UK have had practical export bans in force since the beginning of their vaccination campaign. And secondly, the UK, the US and the EU all opposed a proposal by developing countries to waiver the intellectual property rights for COVID-19 vaccines, which could have boosted the vaccine production in poorer nations (Reuters, 2021).

The bigger picture

The provisions that have long been in place that allow richer nations to hoard vaccines and the profit they generate are keeping life-saving vaccinations from millions of people in need. So, while it is debatable whether the export restrictions will leave the EU better off in the long run, they are a mere fraction of a regime that is keeping the vaccine supply catered towards the richer part of the world. The West is not only creating divisions between themselves and the developing world, but also actively endangering the fight against the pandemic by allowing COVID-19 to spread unhindered in these regions. Until all countries have reached herd immunity, new mutations are free to emerge – and with them comes the threat of variants that vaccines cannot protect us from.


References

Cendrowicz, L. (2021, March 25). An EU ban on vaccine exports would make its wretched rollout take longer still. The Guardian. Retrieved from: https://www.theguardian.com/commentisfree/2021/mar/25/an-eu-ban-on-vaccine-exports-would-make-its-wretched-rollout-take-longer-still

Deutsch, J., Eder, F., & Herszenhorn, D.M. (2021, January 26). Enraged at AstraZeneca over shortfall, EU calls for vaccine export controls. Politico. Retrieved from: https://www.politico.eu/article/enraged-at-astrazeneca-over-shortfall-eu-calls-for-vaccine-export-controls/

Herszenhorn, D.M. & von der Burchard, H. (2021, March 24). EU moves toward six-week vaccine export cut. Politico. Retrieved from: https://www.politico.eu/article/commission-proposes-six-week-vaccine-export-ban-amid-fears-of-trade-war/

Martuscelli, C. (2021, March 24). Italian authorities discover 29M Oxford/AstraZeneca doses: La Stampa. Politico. Retrieved from: https://www.politico.eu/article/italian-authorities-discover-29m-oxford-astrazeneca-vaccine-doses-la-stampa/

Reuters (2021, March 10). Rich, developing nations wrangle over COVID vaccine patents. Retrieved from: https://www.reuters.com/article/us-health-coronavirus-wto-idUSKBN2B21V9

Stevis-Gridneff, M. (2021, March 28). E.U. will curb covid vaccine exports for 6 weeks. The New York Times. Retrieved from: https://www.nytimes.com/2021/03/23/world/europe/eu-curbs-vaccine-exports.html

The threat of low fertility rates in South Korea

Article by Alexandra Reinhild Berndt

In South Korea, low birth rates pose an important threat to society. The current fertility rate is estimated at 0.84 children per women (Lee, 2020). This means that the population is increasingly shrinking. At the moment, many Koreans decide to delay or avoid marriage (Kown & Yeung, 2019). The causes for this are multi-faceted and range from discrimination at the job market to the burden of care work. The government tried to counteract this development by providing financial incentives to young couples. Whether this approach is sufficient remains to be seen.

Causes of low fertility rates

The job market poses an important problem. Many women feel that they have to choose between a career and children. They have the impression that children are a significant impediment to a career (Gladstone, 2021). Women are expected to care for children, so that a return to the previous full-time job is very unlikely (Stangarone, 2019). Women may also face “questions about their marriage status and plans for having children when applying for a job” even though these questions are technically illegal (but the fines in case of law breaking are relatively low, so that firms are still willing to ask these questions) (Stangarone, 2019). Furthermore, the gender pay gap is with 35 percent the highest pay gap among OECD countries which have an average gap of 13,8 percent (Stangarone, 2019). Additionally, the work culture is very challenging with an average of 1967 hours of work per year (37,8 hours per week) (OECD, 2019).

The burden of care work

There are also social factors contributing to the decrease in the fertility rate. Koreans point to unsatisfactory childcare services as reason for not having a baby (Lee, 2020). Women carry most of the burden of care work (Peters, 2020). They work four times more in the household as men (Peters, 2020). It is thus not surprising that women prefer to work and earn money (instead of doing unpaid care work at home).  

Living and housing conditions

Suboptimal living conditions are also playing a role. Housing and rental prices are continuously rising and it is hard to find and adequate housing arrangement (Lee, 2020).  It is thus difficult for a young family to find an affordable and appropriate home.

Implications of decreasing birth rates

A shrinking and ageing population poses certain risks. It is important for a society, that there is a balance between the number of old people and children born. A decline in birth rates and an increase in life expectancy means a burden for the labor force. However, if the birth rate is too low to “stabilize its population”, migration might be an option to reduce the burden for the labor force.

Reaction of the South Korean government

Moon Jae-in, the South Korean President, tries to incentivize couples to get children. At birth, a couple is rewarded with 2 million won ($1,826) and there will be an extra amount of cash bonus every month (Gladstone, 2021). Furthermore, a young family may also expect “increased medical and other benefits” (Gladstone, 2021). In terms of the working conditions, the maximal number of working hours has been reduced from 68 hours to 52 hours per week in 2018 (Peters, 2020).

Conclusion

The causes of low fertility rates in South Korea are multi-faceted. The working conditions for women, however, seem to play a very important role. Especially for working mothers, it would be important that burdens for childcare are eliminated and that the working conditions are more flexible (Stangarone, 2019).

photo by Rod Long published on Unsplash

References

Gladstone, R. (2021, January 04). As Birthrate Falls, South Korea’s Population Declines, Posing Threat to Economy. Retrieved March 5, 2021, from https://www.nytimes.com/2021/01/04/world/asia/south-korea-population.html

Kim, S. (2021, February 10). South Korea’s jobless rate hits 21-year high as COVID cases rise. Retrieved March 5, 2021, from https://www.aljazeera.com/economy/2021/2/10/bb-southkoreasjobless-rate-hits-21-year-high-as-covid-cases-rise

Kwon, J., & Yeung, J. (2019, August 29). South Korea’s fertility rate falls to record low. Retrieved March 5, 2021, from https://edition.cnn.com/2019/08/29/asia/south-korea-fertility-intl-hnk-trnd/index.html

Lee, D. D. (2020, December 27). Can South Korea lift the world’s lowest birth rate with cash incentives? Retrieved March 5, 2021, from https://www.scmp.com/week-asia/health-environment/article/3115396/can-south-korea-lift-worlds-lowest-birth-rate-offering

Peters, K. G. (2020, March 07). Südkorea: Warum viele Koreanerinnen keine Kinder möchten. Retrieved March 5, 2021, from https://www.spiegel.de/politik/ausland/suedkorea-und-die-niedrige-geburtenrate-warum-viele-koreanerinnen-keine-kinder-moechten-a-40617d97-7761-43f0-ac63-4d63f3433a17

Quick, M., & D’Efilippo, V. (2019, October 14). South Korea’s population paradox. Retrieved March 5, 2021, from https://www.bbc.com/worklife/article/20191010-south-koreas-population-paradox

Stangarone, T. (2019, June 14). Gender Inequality Makes South Korea Poorer. Retrieved March 5, 2021, from https://thediplomat.com/2019/06/gender-inequality-makes-south-korea-poorer/

OECD (2021), Hours worked (indicator). doi: 10.1787/47be1c78-en (Accessed on 05 March 2021)

How far CETA can – and cannot – go

Article by Lea Schiller

The EU is Canada’s second largest trading partner, trailing only the United States, making up for 10% of Canada’s external trade in goods. On the EU’s side is a big export surplus – the EU’s exports to Canada in 2017 were worth 14.4 billion Euros more than its imports (European Commission, 2020). It’s no wonder that both partners sought to make the most of this relationship. The Comprehensive Economic and Trade Agreement (CETA) does just this – by abolishing 98% of all tariffs between Canada and the EU, it gives valuable opportunities to both partner’s businesses, consumers and economies. Or so CETA’s advocates claim.

What is CETA?

CETA is a bilateral trade agreement between Canada and the EU. Its negotiations were initially launched in 2009, but it would take until 2017 for it to provisionally enter into force. Provisionally – because in the eyes of the EU, CETA is a mixed agreement, meaning that it includes issues that are under the competences of member states. In practice, this means that all member states have to ratify the treaty themselves before it can fully go into force. Currently, 12 EU member states still need to ratify CETA, including the Netherlands (European Council, 2020). The benefits of this treaty are obvious. It opens the door to the Canadian market for European businesses by reducing trade barriers; the elimination of tariffs will save EU companies millions of Euros every year (Carleton University Center for European Studies). But that’s not the whole story.

How far can CETA go?

Because CETA is currently only provisionally applied, not all parts of the agreement are in force yet – namely, provisions for investments and regulations for the transparency of administrative proceedings. Other parts of the treaty, such as the elimination of tariffs, will come into place gradually. However, based on both the contents of the treaty and its reception in both Canada and the EU, it’s possible to make a first assessment. Firstly, CETA doesn’t eliminate all tariffs. Exceptions apply for “the most sensitive agricultural products” (European Commission, 2017); among these are for example beef, pork and cheese. CETA’s limits are also already being tested in Canada as a response to the EU’s announcement that it would put export controls on COVID-19 vaccines. Under CETA, export controls are illegal – but there are exceptions to this rule, and these exceptions include essential supplies (CBC News, 2021). CETA is therefore, though a free trade agreement, not particularly constraining when it comes to delicate areas of trade.

Why is there so much opposition to CETA?

In Europe, there is concern that opening up the market to Canada will have negative consequences for environment and food safety standards. Public pressure prompted Emmanuel Macron to commission a group of experts to assess the impact of CETA on the environment and health if it were to be fully enforced. The report found that “it is not possible to entirely exclude the risk of undermining the EU regulatory framework concerning food, animal health and welfare … but it is also currently impossible to provide an objective assessment of this risk” (Foodwatch, 2017). In other words, CETA does not incorporate enough safety provisions to rule out the risk of compromising the EU’s high food and environmental safety standards – but there are also no explicit risks that can be derived solely from the text of the agreement.

Is it worth it? One thing is for sure – the pandemic will have significant negative effects on both the EU’s and Canada’s economy. Fostering trade with a country that the EU has an export surplus to will give a much needed boost to its exports. CETA also doesn’t mean a loss of control for the EU – after all, its most vital interests are protected by the exceptions that are granted in the treaty. Granted, there are legitimate concerns about the effects of CETA on the environment and consumer health. But considering that there were no explicit problems listed in the expert report on CETA’s impact on the environment and health – it’s a calculated risk that is worth taking for the EU.

waving Canada flag
Photo by Sebastiaan Stam published on Unsplashed

References

Carleton University Center for European Studies.Reception of CETA. Retrieved from: https://carleton.ca/ces/eulearning/reception-of-ceta/

CBC News (2021, February 1). No written guarantee on EU vaccine shipments, says international trade minister. Retrieved from: https://www.cbc.ca/news/politics/vaccine-eu-export-controls-assurances-1.5896223

European Commission (2020, April 23). Countries and regions: Canada. Retrieved from: https://ec.europa.eu/trade/policy/countries-and-regions/countries/canada/

European Commission (2017, July). Guide to the Comprehensive Economic and Trade Agreement. Retrieved from: https://trade.ec.europa.eu/doclib/docs/2017/september/tradoc_156062.pdf

European Council (2020, December 2). Comprehensive Economic and Trade Agreement (CETA). Retrieved from: https://www.consilium.europa.eu/en/documents-publications/treaties-agreements/agreement/?id=2016017

Foodwatch (2017, November 1). The impact of CETA on the environment, climate and health. Retrieved from: https://www.foodwatch.org/en/campaigns/free-trade-agreements/the-impact-of-ceta-on-the-environment-climate-and-health/

Reactions to racial discrimination against the African community in Guangzhou

Article by Alexandra Reinhild Berndt

The African community in Guangzhou (China) suffered from increasing incidents of racial discrimination in April 2020. Many Africans were banned from certain locations as restaurants or hotels or even forced to leave their apartments (Tang, 2020; Burke, Akinwotu, & Kuo, 2020; Mules, 2020). Pictures of evicted Africans sleeping on streets were shared on social media platforms and started attracting considerable attention (Burke, Akinwotu, & Kuo, 2020). How did this come about and what were its implications?

Some Background information about the African community in Guangzhou

In the course of China’s Silk Road initiative, migration flows from Africa to China increased. The African diaspora in China grows continuously. As Guangzhou is a strategic place for international trade, the city attracted many African traders (Vandenberg, 2019). The African community is accordingly very large. There are officially about 14,000 people from African descent, the actual number might, however, be higher as there are many Africans without documentation (Human Rights Watch, 2020). African traders have been moving to Guangzhou since the 1990s (Vandenburg, 2019). The existence of the African community is, thus, not new to the Chinese population.

Corona fuelled pre-existing racial tensions

According to Human Rights Watch (2020), there have already been incidents of discriminatory practice in the past. Africans suffered, for instance, from unequal payment and employment discrimination (Human Rights Watch, 2020). Racial discrimination was also visible in advertisements and on television (Human Rights Watch, 2020). In 2016, for instance, a washing powder advertisement showed a Chinese woman who “shoves a black man into a washing machine only for him to emerge as a shiny, clean, Asian man” (Castillo, 2016). When the rate of COVID-19 infections increased in Guangzhou, “fear and misinformation” dominated the situation (Mules, 2020). Corona exacerbated pre-existing racial tensions and thus fuelled discriminatory practices (Mules, 2020).

Wide-spread international criticism

The implications of the increase in discriminatory practices in Guangzhou were far-reaching. Hashtags like “#ChinaMustExplain and #DeportRacistChinese” were increasingly shared on twitter (Albert, 2020). Politicians from various African countries started expressing their anger and criticizing the Chinese government (Albert, 2020; Burke, Akinwotu, & Kuo, 2020). Even the United States criticized the Chinese government. Two US diplomats also warned “African-Americans to stay away from the Guangzhou metropolitan area” (Mules, 2020). This reaction, however, is somewhat ironic as the US itself has a problem with structural racism (Sieren, 2020). Reactions also came from NGOs as Human Rights Watch. Human Rights Watch reminded China of having ratified the ICER (the Elimination of All Forms of Racial Discrimination) in 1981 (Human Rights Watch, 2020). The reactions from African governments, however, seemed to have the most important effect.

China’s reaction

Chinese investments in Africa strengthened not only economic, but also social and political ties. The reactions from African governments represented a threat the Sino-African relationship. At first, the Chinese government was “denying any form of discrimination against ‘African brothers’” (Mules, 2020). However, China “moved quickly to deal with the initial accusations of discrimination” by ensuring African countries to “take immediate action to safeguard the legitimate rights of Africans concerned” (Burke, Akinwotu, & Kuo, 2020). Chinese authorities then made efforts to calm the situation my adopting new measures against discriminatory practices in Guangzhou (Mules, 2020). This shows that China is interested in maintaining a stable, well-functioning relationship with African countries. China’s engagement in Africa thus has implications for China’s domestic policy options in terms of the treatment of the African diaspora in China.

Conclusion

In conclusion, the cascade of reactions to the discriminatory practices in Guangzhou not only unveiled pre-existing racial tensions, but also showed that the increasing interconnectedness between China and Africa has implications for China’s domestic policy options with regard to the African diaspora.

black car
Photo by Sean Foley published on Unsplashed

References

Albert, E. (2020, April 27). African Countries respond to Guangzhou’s ‘Anti-Epidemic Measures’  . Retrieved February 5, 2021, from https://thediplomat.com/2020/04/african-countries-respond-to-guangzhous-anti-epidemic-measures/

Burke, J., Akinwotu, E., & Kuo, L. (2020, April 27). China fails to stop racism against Africans over Covid-19. Retrieved February 5, 2021, from https://www.theguardian.com/world/2020/apr/27/china-fails-to-stop-racism-against-africans-over-covid-19

Castillo, R. (2016, August 14). The “racist” Chinese washing powder ad and the truth about Afrophobia in China. Retrieved February 5, 2021, from https://qz.com/africa/757850/the-racist-chinese-washing-powder-ad-and-the-truth-about-afrophobia-in-china/

Human Rights Watch. (2020, October 28). China: Covid-19 Discrimination against Africans. Retrieved February 5, 2021, from https://www.hrw.org/news/2020/05/05/china-covid-19-discrimination-against-africans

Mules, I. (2020, April 14). African expats accuse China of xenophobic response to COVID-19 resurgence fears: DW: 14.04.2020. Retrieved February 5, 2021, from https://www.dw.com/en/african-expats-accuse-china-of-xenophobic-response-to-covid-19-resurgence-fears/a-53120697 

Sieren, F. (2020, April 15). Sierens China: Afrikaner – Freunde und Sündenböcke: DW: 15.04.2020. Retrieved February 5, 2021, from https://www.dw.com/de/sierens-china-afrikaner-freunde-und-sündenböcke/a-53131187

Sieren, F. (2020, April 28). Rassismus in China in Coronazeiten – Schwarze als Risikogruppe eingestuft. Retrieved February 5, 2021, from https://www.deutschlandfunkkultur.de/rassismus-in-china-in-coronazeiten-schwarze-als.1008.de.html?dram:article_id=475591

Tang, D. (2020, April 14). ‘No blacks’: African migrants kicked out of homes and banned from shops in Guangzhou, China. Retrieved February 6, 2021, from https://www.thetimes.co.uk/article/no-blacks-african-migrants-kicked-out-of-homes-and-banned-from-shops-in-guangzhou-china-b9p0z0ggt

Vandenberg, L. (2019, July 31). The evolution of Afro-Chinese dentity. Retrieved February 5, 2021, from https://thediplomat.com/2019/07/the-evolution-of-afro-chinese-identity/

What the EU’s conflict with AstraZeneca means for the fight against COVID-19

Article by Lea Schiller

On Friday the 29th of January, the EMA (European Medicines Agency) approved AstraZeneca’s COVID-19 vaccine for use, making it the third vaccine to be used in the EU’s joint effort to vaccinate the bloc. But for this one, tensions were already brewing before the EMA gave its green light. AstraZeneca cut the expected quantity of vaccines to be delivered by 60%, citing problems in a factory in Belgium – but the European Commission insists on received what it has been promised. In a time where the relationship between the EU and the UK is already being put to the test by Brexit, and a time that has shown us a worse side of the pandemic than ever before, we cannot let this become a test of political strength – after all, thousands of lives depend on a sensible solution.

How AstraZeneca sees the debate

According to AstraZeneca, the conflict originated both in the contract and with the point in time that it was made (Collins & Herszenhorn, 2021). The EU originally signed the contract in August, three months after the UK placed their order with the company. This led to a situation in which AstraZeneca was already in a contract that it was committed to fulfil – namely, the 100 million doses it had promised to deliver to the UK. The contract with the EU therefore, 400 million doses in total with 80 million to be delivered by March, only states the company would make its “best effort” to deliver the vaccines (Collins & Herszenhorn, 2021). It’s the phrase AstraZeneca is now using to argue that they technically are not in breach of their contract.

The EU’s response

AstraZeneca’s announcement to cut vaccine delivery sparked outrage rarely seen from the European Commission. Stella Kyriakides, the EU’s Commissioner for Health, stated that AstraZeneca’s “best effort” argument is “neither correct nor acceptable” (Deutsche Welle, 2021). The contract, which was made public on Friday, mentions production sites in the UK – sites which the EU helped expand last year in a costly effort to increase the amount of vaccines these factories can produce (Herszenhorn & Deutsch, 2021). The EU now demands these factories be used to make up for the shortfall of those inside the Union. And it doesn’t stop there. The EU also signalled that it found AstraZeneca’s reasoning for the delay insufficient, with Kyriakides saying, “the European Union wants to know exactly which doses have been produced by AstraZeneca and where exactly so far and if or to whom they have been delivered” (Deutsch, Eder & Herszenhorn, 2021).

The fallout

AstraZeneca eventually offered the EU 8 million extra shots, which the EU was not satisfied with (Guarascio & Siebold, 2021). Instead, it initiated export controls on vaccines made in the bloc. In practice, every vaccine export will have to be authorized before it can be shipped to any country outside of the EU. These authorisations are not expected to be given should the supply of vaccines within the bloc be threatened by exports (Wishart & Baschuk, 2021).  The rest of the world was not pleased – Boris Johnson as well as the WTO called on the EU to rethink its decision, to prevent vaccine nationalism from spreading all over the globe. But most gravely, the export controls endangered the open border between the EU and Northern Ireland, which was guaranteed in the Brexit deal and a sensitive agreement to begin with. Mere hours later, the EU announced it would not introduce checks at the Irish border – averting a possible crisis.

What does this conflict mean for the fight against the pandemic?

This situation shows how the vaccination effort goes beyond a mere public health operation. For the EU, it also means a test of the trust citizens have in the Union, while for the UK, it is an important chance to prove itself after Brexit. However, with millions of lives on the line, this is not the time to play the blame game and alienate one another – what is most important now is to find solutions to the vaccine shortages. The current conflict between AstraZeneca and the EU could put this goal in jeopardy. Both sides need to engage with the other constructively. Otherwise, we could lose focus on the actual goal: stopping the pandemic. 
 

person in brown long sleeve shirt with white bandage on right hand
photo by Steven Cornfield published on Unsplash

References

Collins, H., & Herszenhorn, D.M. (2021, January 27). AstraZeneca CEO: EU vaccine contract is ‘not a commitment’. Politico. Retrieved from: https://www.politico.eu/article/astrazeneca-ceo-eu-vaccine-contract-is-not-a-commitment/

Coronavirus: EU expresses dismay over AstraZeneca vaccine delays. (2021, January 27). Deutsche Welle. Retrieved from: https://www.dw.com/en/coronavirus-eu-expresses-dismay-over-astrazeneca-vaccine-delays/a-56358916

Deutsch, J., Eder, F., & Herszenhorn, D.M. (2021, January 26). Enraged at AstraZeneca over shortfall, EU calls for vaccine export controls. Politico. Retrieved from: https://www.politico.eu/article/enraged-at-astrazeneca-over-shortfall-eu-calls-for-vaccine-export-controls/

Guarascio, F., & Siebold, S. (2021, January 29). EU holds out for more after AstraZeneca offered 8 million extra COVID-19 shots. Reuters. https://www.reuters.com/article/us-health-coronavirus-eu-astrazeneca/eu-holds-out-for-more-after-astrazeneca-offered-8-million-extra-covid-19-shots-idUSKBN29Y0UL?il=0

Herszenhorn, D.M., & Deutsch, J. (2021, January 29). Redacted contract fails to clear up EU-AstraZeneca vaccine row. Politico. Retrieved from: https://www.politico.eu/article/eu-astrazeneca-coronavirus-vaccine-contract-dispute/

Wishart, I., & Baschuk, B. (2021, January 29). EU Risks Global Vaccine Battle With Bold Export Control Plan. Bloomberg. Retrieved from: https://www.bloomberg.com/news/articles/2021-01-29/eu-sets-vaccine-export-controls-risking-global-battle-for-doses

Chinese investment in Ethiopia

Article by Alexandra Reinhild Berndt

In the context of China’s Belt and Road initiative, China invested heavily in Ethiopia. Between 2000 and 2018, Chinese investments even reached $13.7 billion (Marks, 2020). For Ethiopia, Chinese FDI represents an opportunity for economic growth and development. Even though poverty has been reduced in recent years, the rate of poverty remains a significant problem, especially in rural areas (Worldbank, 2020). Chinese funds have created many development opportunities. However, there are also certain risks associated with Chinese FDI.

The Ethiopian hope

China mainly invested in Ethiopian infrastructure. Railways, highways and metro-systems are financed by Chinese funds. The Ababa-Djibouti railway line is a perfect example showing Ethiopia’s hope in economic growth.  The international railway system links Ethiopia with Djibouti and guarantees Ethiopia access to Djiboutian ports. It provides a “major export and import connection” as it connects “land locked Ethiopia” with “the Red Sea’s international shipping routes” (Mohapatra, 2017).  It is expected to increase employment and revenue and thus shows Ethiopia’s hope in economic development.  Furthermore, the Ethiopian government expects Chinese investments to create an increase in employment. Several industries (as the textile industry) are planned to be further developed with the help of Chinese FDI (Breitegger, 2019). Ethiopia thus aspires to lift people out of poverty by insuring the creation of new jobs. Additionally, the government hopes that the increase in industrialization leads to a growth in the Ethiopian middle class (Breitegger, 2019). Another important aspect making Chinese FDI so attractive for Ethiopia is that China “disburses large sums of development aid to African countries” without making “assistance conditional on maintaining human rights standards or adhering to democratic norms and values” (Marks, 2020).

FDI with no strings attached?

The increasing dependency on Chinese investment, however, is the main risk associated with Chinese FDI. US Vice President Mike Pence even accused China of creating a “debt trap” (Breitegger, 2019; Olander, 2020). According to Marks (2020), “China accounts for nearly half of Ethiopia’s external debt” at the moment. The future will tell whether the American accusations are true.

Beijing’s interests

China’s interest in Ethiopia is multi-faceted. There are four main aspects that are worth mentioning. Firstly, the revenues for Ethiopian workers are significantly lower making it attractive for Chinese firms to create factories in the labor-abundant country (Breitegger, 2019). Secondly, Ethiopia represents a large consumer market (Crabtree, 2018). Thirdly, Ethiopia is attractive for Chinese investment as the Ethiopian government loweres taxes for Chinese firms (Breitegger, 2019). Fourthly, the creation of Chinese firms in Ethiopia provides jobs for Chinese citizens. It is estimated that one million Chinese people live in Africa at the moment, many of them working in the construction industry.

Implications of the Tigray conflict

In November 2020, the conflict in the Tigray region between the Tigray People’s Liberation Front (TPLF) and the Ethiopian federal government escalated (Farole, 2020). According to Farole (2020), “thousands of civilians have been replaced and hundreds have died”. The escalation of the ethnic conflict has motivated the European Union to suspend “nearly €90 million in budgetary aid to Ethiopia” (Marks, 2020). This decision reflects the EU’s attempt to link financial aid with the commitment to democratic values. In contrast to the EU, China’s investment in Ethiopia has not been conditional on the commitment to democratic norms and Human rights thus far (Marks, 2020). However, the impact of the conflict on Chinese investment decisions remains unclear.

Conclusion

Chinese investments are very important for the economic development of Ethiopia. The Ethiopian government hopes that Chinese FDI reduces unemployment and poverty and increase economic growth. However, it remains unclear to which extent the Tigray conflict might influence Chinese investment decisions. Furthermore, the increase in Ethiopian debt raises the question to which extent Ethiopia is dependent on China.

1 U.S.A dollar banknotes
photo by Sharon McCutcheon published on Unsplash

References

Breitegger, B. (2019, January 26). Chinas Rolle in Äthiopien. Retrieved January 4, 2021, from https://www.deutschlandfunk.de/afrikanische-wirtschaft-chinas-rolle-in-aethiopien.724.de.html?dram:article_id=439399

Crabtree, J. (2018, February 23). Chinese investment hotspot and a state of emergency: What’s going on in Ethiopia. Retrieved January 4, 2021, from https://www.cnbc.com/2018/02/23/china-investment-state-of-emergency-ethiopia-latest.html

Davis, K., Jr. (2019, July 29). Ethiopia could be the first African country to show China it has bargaining power. Retrieved January 4, 2021, from https://www.theafricareport.com/15757/ethiopia-could-be-the-first-african-country-to-show-china-it-has-bargaining-power/

Farole, S. (2020, November 24). Ethiopia’s Tigray conflict reflects unresolved ethnic tensions. Retrieved January 4, 2021, from  https://www.washingtonpost.com/politics/2020/11/24/ethiopias-tigray-conflict-reflects-unresolved-ethnic-tensions/

Marks, S. (2020, February 03). Ethiopia plays Europe off China in bid to boost investment. Retrieved January 4, 2021, from https://www.politico.eu/article/ethiopia-plays-europe-off-china-in-bid-to-boost-investment/

Marks, S. (2020, December 16). EU suspends nearly €90M in aid to Ethiopia over internal conflict. Retrieved January 4, 2021, from https://www.politico.eu/article/eu-commission-suspends-nearly-90-million-euros-in-aid-to-ethiopia-over-internal-conflict/

Mohapatra, D. R. (2017). An economic analysis of Djibouti-Ethiopia railway project. Economic and Financial Analysis of Infrastructure Projects: An Edited Volume, 158.

Olander, E. (2020, January 14). China’s infrastructure finance model is changing. Here’s how. Retrieved January 4, 2021, from https://www.theafricareport.com/22133/chinas-infrastructure-finance-model-is-changing-heres-how/

Worldbank. (2020, April 16). Ethiopia poverty assessment: Poverty rate declines, despite challenges. Retrieved January 5, 2021, from https://www.worldbank.org/en/country/ethiopia/publication/ethiopia-poverty-assessment-poverty-rate-declines-despite-challenges

COVID-19 could spark change bring about a digital tax in the EU– but will the US give its support?

Article by Lea Schiller

Before COVID-19, there was a move for a so-called “digital tax” in Europe – a tax aimed at the profits generated from digital activities. Even back then, the proposal was contested, not only within the EU but also with its Atlantic partners. Then came the pandemic, and with it not only an even bigger need for these taxes, but also shifted the world’s attention away from these plans. A solution to this problem is desperately needed, especially since governments will need the revenue to revive their economies – but an agreement that both the EU and the US will agree to is going to be difficult to reach. The EU should nevertheless move forward, towards a local digital tax.

What is a digital tax, and why is it important?

The goal of the digital tax is to close the legal hole that has been left by the existing taxation system. The current system does not take into consideration the many new business models that rely on digital spaces to make revenue (European Council, 2020). Current taxation systems assume that businesses have a physical presence in the country in which they make profit. This leads to a situation in which profits are not taxed in the country in which the consumers are – a situation that the digital tax proposal intends to fix. It is a hotly contested idea, not least because the stakes are high: more and more revenue are being generated online, and this development has only been exacerbated by the pandemic. Companies like Google and Facebook have found it easy to grow their revenue, as their business model benefits from the emphasis on digital spaces. On one side, tech giants like Google and Amazon are reluctant to give up their advantage. On the other hand, states seek a way to level the playing field for their domestic companies. In contrast to big corporations in the tech industry, they have been making major losses since the pandemic has started to force governments to put their countries in lockdown.

The EU’s efforts for a digital tax: a rocky road

In 2019, France introduced a 3% digital tax that was planned to go into effect in April of 2020 but had to be pushed back after the US threatened to retaliate with tariffs on French wine (Heikkilä & Braun, 2020). Nevertheless, the move prompted other EU member states (Spain, Italy, Austria and the Czech Republic) to come forward with their own proposals for a digital tax – though none of them have been implemented yet (Heikkilä & Braun, 2020). The EU sent the European Commission to represent the Union at the OECD, which is working on a global solution, in order to avoid regional differences and prevent countries from lowering the tax rate to entice companies to move their headquarters there. However, it is unclear if – or when – the OECD will come to a decision and so France has renewed talks of an EU-wide digital tax (Reuters, 2020). With good reason – the potential revenue that could be collected from these taxes would be welcome amidst the economic fallout of the pandemic.

Roadblock US: Why it will be difficult to keep them on the negotiating table

The first draft of a solution by the OECD consists of two pillars: firstly, the goal that companies will be taxed where they make profit, and secondly, a global minimum corporate tax. The European Commission has stated that it prefers a solution to include both pillars, as otherwise not all member states will agree to it (Heikkilä & Braun, 2020). However, the US has voiced strong opposition to the first pillar. And that is not where the story ends: in June, after pulling out of negotiations with European countries, the US Treasury sent a letter to the finance ministers of the UK, France, Italy and Spain, warning them of imposing a digital tax, and to expect tariffs on their goods if they do (Fleming, Brunsden, Giles & Politi, 2020). And it is unclear if the Biden administration will change its stance on the issue. The new president will have to deal with the economic fallout of the pandemic, and the Democrats have opposed digital taxes in the past, claiming that they unfairly target US companies (Horowitz, 2020). Getting the US to agree to a settlement could be a long, drawn out process that means conflict is ahead, whether the EU moves forward with their plans of a local digital tax or not.

Moving ahead

The EU is in dire need of a solution for the digital tax problem. France’s digital tax was only pushed back until December 2020 and the country is pushing the EU to find a solution by mid-2021, should the OECD not come to a decision until then (Reuters, 2020). It is a deadline that is a chance as much as it is a risk – moving towards a regional tax in Europe could lead to tensions with the newly inaugurated Biden administration. That is to say that establishing such a tax for the bloc is not going to be easy; not least because the EU will need to avoid triggering a trade war with the US. But the issue is too pressing to wait. Big companies operating in digital spaces have made profit during the pandemic – Amazon for example doubled its profits during the second quarter of 2020 (Dastin & Rana, 2020). And if the EU wants to mitigate the effects of the shutdowns on their domestic firms and small businesses, it is going to need as many sources of revenue as possible.

flag of U.S.A.
photo by Renan Kamikoga published by Unsplash

References

Dastin, R. & Rana, A. (2020, July 30). Amazon posts biggest profit ever at height of pandemic in U.S. Reuters. Retrieved from: https://de.reuters.com/article/us-amazon-com-results/amazon-posts-biggest-profit-ever-at-height-of-pandemic-in-u-s-idUSKCN24V3HL

European Council. (2020, October 20). Digital Taxation. Retrieved from: https://www.consilium.europa.eu/en/policies/digital-taxation/#

Fleming, S., Brunsden, J., Giles, C. & Politi, J. (2020, June 17). US upends global digital tax plans after pulling out of talks with Europe. The Financial Times. Retrieved from:  https://www.ft.com/content/1ac26225-c5dc-48fa-84bd-b61e1f4a3d94

Heikkilä, M. & Braun, E. (2020, July 23). Digital Tax: A cautionary tale. Politico. Retrieved from: https://www.politico.eu/article/digital-tax-a-cautionary-tale-france-germany-amazon-google-facebook-platforms/

Horowitz, J. (2020, November 25). France orders Big Tech to pay despite threat of US tariffs. CNN. Retrieved from: https://edition.cnn.com/2020/11/25/tech/france-digital-taxes/index.html

Reuters. (2020, November 30). Biden should clarify US position on digital tax within two months, France says. Reuters. Retrieved from: https://www.reuters.com/article/eu-usa-tax-idCAKBN28A18P