EPAs: Why We Must Be Cautious

Gaborone – A series of meetings involving senior officials and experts from Southern Africa and the European Union (EU) are scheduled before the end of the year as the parties attempt to finalise a full Economic Partnership Agreement (EPA).

Media reports indicate that officials from the two sides recently met in South Africa. In a statement, the EU Directorate-General for Trade of the European Commission said another meeting would be held in Gaborone, Botswana, this year.

But will the EPA deliver real progress in redefining trade relations between the two sides or will the meetings result in a redecorating of the already much-maligned proposals that experts have been rejecting?

In a nutshell, in order to continue to have access to European markets, Africa is required to eliminate tariffs on at least 80 percent of imports from the EU, abolish export duties and taxes in several cases and meet other conditions that have for long skewed the trade relationship in Europe’s favour.

EPAs have been described by some as essentially free trade area agreements that are an integral part of the EU’s external trade policy, which is driven by a desire to dominate emerging markets.

Around 80 experts will represent Angola, Botswana, Lesotho, Mozambique Namibia, South Africa and Swaziland at the levels of government, business, academia and civil society in the next round of talks.

They will engage trade specialists from the European Commission, the administrative and operational arm of the EU.

According to the statement from the EU Directorate-General for Trade, “Agreement on a trade deal to replace the current temporary arrangements between several countries in Southern Africa and the EU is within reach.

“Business operators need the legal certainty and the two sides are engaged in trying to ensure that the business environment is right.

“The potential benefits of duty and quota free access to the European Union's market of 500 million consumers are enormous.”

Should the current negotiations fail, the EU says it will revert to the interim-EPA and request the four signatory states to ratify it and notify the World Trade Organisation (WTO).

The Southern Africa–EU EPA negotiations were launched on July 8, 2004, in Windhoek, Namibia, with both sides agreeing on a joint roadmap setting out the principles, organisation, main stages and timeframe of the negotiations.

The process has been beset by acrimony, with many experts urging Southern Africa to be wary of how it engages the EU on the EPA.

For instance, the Southern African People's Network (SAPSN) has called on regional governments to reject any impositions by the EU and work hard instead to protect its interest.

SAPSN draws together dozens of grassroots movements, community and faith-based organisations, women's associations, labour, student, youth, and economic justice and human rights networks.

Recently, “(The) groups called for the rejection of all free trade agreements and especially the EU-imposed Economic Partnership Agreements which are dividing and threatening the very survival and future development of SACU and SADC.”

Tetteh Hormeku, head of programmes at the Third World Network-Ghana, has added to this saying: “Apart from threatening the food security and livelihoods of smallholder farmers, the EPAs would also thwart government’s ability to use procurement as a tool for social change.

“Besides, it will also take away the policy space that is necessary for government to direct foreign investors to areas critical for national development.”

Hormeku points out that liberalisation has already led to uneven competition as the EU’s unwillingness to abolish agricultural subsidies has led to the demise of many African producers.

“If the EPAs come into effect, countries will experience a catastrophe. Signing to it will cover a large area of trade in goods and services.

“The EU demands 80 percent tariff liberalisation; and the abolishing of export tariffs would impact negatively on local producers, consumers and government revenues,” he said.

Thomas Deve, who is based at the Southern and Eastern African Trade Information Negotiations Institute says despite their posture as “partnership agreements”, the EU’s proposals are clearly wrapped in the free market fundamentalism espoused by the international financial institutions and the WTO.

“Economic Partnership Agreements that are currently being negotiated between the European Union and some governments in Africa since 2004 are not development-oriented and it is doubtful that they will promote sustainable development, eradication of poverty, reinforcement of regional integration, improved market access, and the gradual integration of Africa into the global economy.

“They are driven by a philosophy and ideological motivation which has caused major crises in the world.

“Greece and the debt crisis in Europe are some of the latest examples we have to draw lessons from.”

He has also written, “The process of negotiations continues to pit weak African, the Caribbean and the Pacific states versus a solid European Union forcing EPAs to be concluded with individual states in the region under unfavourable circumstances.

“EPAs will reinforce the recolonisation of Africa and simply assign African countries the unfair position of being a cheap source of raw materials for Europe and a guaranteed market for its goods.

“The rhetoric in the policy statements presents the EU as a partner rather than a competitor in a liberalised market and this has hoodwinked many into believing that it is working towards cooperation and support for sustainable development and the elimination of unacceptable levels of poverty.”

Professor of Economics and former Governor of Nigeria’s Central Bank, Chukwuma Charles Soludo goes further to say EPAs are the modern equivalent of the Berlin Conference that led to Africa’s partitioning among European powers and colonisation.

“A major difference,” he asserts, “is that the EPAs, unlike the Berlin Conference of 1884-85, will now be signed by free African people, under supposedly democratic governments, and in contexts where the African people again have neither voice nor choice…

“In private whisperings, not many Africans or policymakers are happy with the deal but there is a certain sense of helplessness.”

Prof Soludo adds that EPAs will destroy Africa’s nascent industrial sector and agriculture.

“Tariff revenues will shrink; premature and permanent opening up of service sectors including financial services leaves them open to the full hazards of the perennial global financial bubbles; and it will badly hurt intra-African economic integration.

“Africa would almost be consigned to be specialists in the export of raw materials… The list of the damages is long and cannot be detailed here.”

Europe, he notes, is trying to sweeten the deal through what it calls “EU Aid for Trade”.

However, the EU has largely broken all previous “aid” promises and thus cannot be trusted to keep its end of the bargain this time around.

November 2012
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