Continent Warned About EU Trade Deal

John Kaninda (Business Day)- LONDON-based charity Oxfam has warned African countries not to rush into signing the European Union (EU) Economic Partnership Agreements (EPAs) in their present form as this would result in opening up the continent’s markets to EU trade "too fast and too deeply".

The institution feared that the move would at the same time expose vulnerable African farmers and fledgling industries to unfair—often subsidised—competition from Europe, said Luis Morago, head of Oxfam’s EU Advocacy Office.

The call was made after Botswana, Lesotho, Mozambique and Swaziland on Friday initialed a free trade agreement with Europe. SA and Namibia are yet to sign the agreement.

Morago fears that in the next few weeks other regions could give into pressure from the European Commission to sign deals before the end of the year .

"Countries are being placed under enormous pressure to sign deals before the end of the year that could cause significant damage to their economic prospects."

Morago said: "They are being asked to trade off the interests of their exporters—who will see a hike in tariffs from January 1 if no deals are signed—against the livelihoods of some of their most vulnerable subsistence farmers and industries."

He said the latter would face competition from Europe if the tariffs were taken down.

"It suits the commission to spread the impression that regions are falling into line and others should do so too.

"But we would urge developing countries to take heed of the range of voices raised against these deals—from the World Bank to trade lawyers to civil society and trade unions—and resist the pressure ."

If African countries remove the majority of tariffs on imports, they will face massive losses of government revenue, potentially jeopardising spending on health and education, Oxfam said.

The body also believed that the negotiations were undermining critical regional integration processes. The EU Commission has said that it was obliged to finalise free trade deals by next month according to the World Trade Organisation (WTO) rules.

However, Oxfam has argued that the existing preference scheme, known as GSP+, could be extended to ACP countries to guarantee continued access to EU markets in the absence of a new deals, or the waiver granted by the WTO could be extended.

GSP+ is a new single scheme that covers—for the period 2006-08—approximately 7200 products that can enter the EU duty free from vulnerable countries. However, these are reserved for countries whose governing principles accept the main international conventions on social issues, human rights, environmental protection and good governance.

The deal initialed between southern Africa on Friday covered trade in goods only.

It lacked a lot of significant information, including how many tariff lines would have to be cut, by how much and the percentage of trade that could be exempt . The full offers are due to be exchanged on December 6 and the deal will need to be signed by ministers and then ratified before it is final.

Last week, there were suggestions that East Africa had signed a deal. This turned out to be untrue but countries are under a lot of pressure to agree to sign before the end of the year to protect their existing export business .

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