Malawi tobacco pressured as US butts in over labor abuses

As tobacco, known locally as ‘green gold,’ is Malawi’s top crop in terms of employment, foreign exchange earnings and tax revenue, any trouble the sector runs into could quickly reverberate throughout the economy. (AFP/File)
Updated 01 December 2019

Malawi tobacco pressured as US butts in over labor abuses

  • As tobacco, known locally as “green gold,” is Malawi’s top crop in terms of employment

BLANTYRE: Malawi is being forced to confront child and forced labor practices after the US restricted tobacco imports from the impoverished southeastern African nation over allegations workers including children were being exploited.

Although exports to the US make up only a small part of Malawi’s total, the US move could make it harder selling its tobacco elsewhere and has sparked anxiety among farmers who fear they will be forced to accept lower prices.

As tobacco, known locally as “green gold,” is Malawi’s top crop in terms of employment, foreign exchange earnings (60 percent) and tax revenue (25 percent), any trouble the sector runs into could quickly reverberate throughout the economy.

The US decision piles even more pressure on the tobacco sector, already confronted with global anti-tobacco campaigns.

The trouble began in late October. British law firm Leigh Day announced it was preparing a landmark class action case against British American Tobacco (BAT) on behalf of 2,000 Malawian farmers, including hundreds of children, for forced labor and poverty wages.

BAT, which says it “takes the issue of child labor extremely seriously,” has denied any wrongdoing and noted that it buys tobacco from Malawi via international dealers who are required adhere to a code of conduct that does not tolerate child and forced labor.

The US suspended imports of tobacco from Malawi, saying it had information that reasonably indicated it was being produced using forced labor and forced child labor.

According to a survey conducted in 2017 by the country’s statistics agency the use of child labor in Malawi is extensive. It found that 38 percent of the country’s children aged between 5 and 17 were working.

Although the survey did not provide specific information about the tobacco sector, it is widely acknowledged that child labor is a problem.

Betty Chinyamunyamu, who heads an association of smallholder farmers, said incidents of child labor occur despite efforts to eliminate the practice.


China suspends planned tariffs on some US goods

Updated 15 December 2019

China suspends planned tariffs on some US goods

  • Chinese tariffs were supposed to target goods ranging from corn and wheat to vehicles and auto parts
  • Beijing agreed to import at least $200 billion in additional US goods and services over the next 2 years

SHANGHAI: China has suspended additional tariffs on some US goods that were meant to be implemented on Dec. 15, the State Council’s customs tariff commission said on Sunday, after the world’s two largest economies agreed a “phase one” trade deal on Friday.
The deal, rumors and leaks over which have gyrated world markets for months, reduces some US tariffs in exchange for what US officials said would be a big jump in Chinese purchases of American farm products and other goods.
China’s retaliatory tariffs, which were due to take effect on Dec. 15, were meant to target goods ranging from corn and wheat to US made vehicles and auto parts.
Other Chinese tariffs that had already been implemented on US goods would be left in place, the commission said in a statement issued on the websites of government departments including China’s finance ministry. “China hopes, on the basis of equality and mutual respect, to work with the United States, to properly resolve each other’s core concerns and promote the stable development of US-China economic and trade relations,” it added.
Beijing has agreed to import at least $200 billion in additional US goods and services over the next two years on top of the amount it purchased in 2017, the top US trade negotiator said Friday.
A statement issued by the United States Trade Representative also on Friday said the United States would leave in place 25% tariffs on $250 billion worth of Chinese goods.