Dorothy-Grace Guerrero and Firoze Manji (ed) (2008) China’s New Role in Africa and the South: A search for a new perspective. 
Back Issues
PAMBAZUKA NEWS 216: Economic Partnership Agreements: territorial conquest by economic means?
A Weekly Electronic Forum For Social Justice In Africa
Pambazuka News is the authoritative electronic weekly newsletter and platform for social justice in Africa providing cutting edge commentary and in-depth analysis on politics and current affairs, development, human rights, refugees, gender issues and culture in Africa.
"In the 21st century millions of Africans are not the pathetic, dumb, ignorant or irredeemably dependent creatures of the European collective psyche. They know all too well the desperation and dreadful, endemic problems blighting their countries. ... Go to Pambazuka-news@pambazuka.org a site with sharp intellectual and political debates by Africans and you can see the Africa which is unfolding. They are already speaking for themselves and doing it for themselves." Yasmin Alibhai Brown, Independent, 6th June 2005
To view online, go to http://www.pambazuka.org/
Want to get off our subscriber list? Write to unsubscribe@pambazuka.org and your address will be removed
CONTENTS: 1. Highlights from this issue, 2. Features, 3. Pan-African Postcard, 4. Letters, 5. Conflict & emergencies
Support the struggle for social justice in Africa. Give generously!
Donate at: http://www.pambazuka.org/en/donate.php
**************************************************************************
VOTE FOR PAMBAZUKA NEWS: Pambazuka News is one of 10 finalists of the 'Top Ten Who Are Changing The World of Internet & Politics' competition, sponsored by PoliticsOnline and the 6th annual E-Democracy Worldwide Forum.
The competition works according to an online voting structure. To to be amongst the ten winners of the competition, Pambazuka News needs your vote. Please visit www.politicsonline.com/content/main/specialreports/2005/top10_2005/vote.asp and cast your online vote for Pambazuka News.
Here's what internationally-renowned poet and activist Dennis Brutus had to say about the vote: "Vote for Pambazuka's inclusion in the top ten in politics and internet." - Prof. Dennis Brutus, patron Jubilee South Africa.
**************************************************************************
Highlights from this issue
Economic Partnership Agreements: territorial conquest by economic means?
2005-07-21
Patrick Burnett and Firoze Manji
Why should anyone be interested in the Economic Partnership Agreements (EPAs) currently being negotiated between the European Union (EU) and African, Caribbean and Pacific (ACP) countries?
Behind the herd of acronyms, obscure economic jargon and polite euphemisms, lies a pernicious programme that threatens to subjugate the economies of African, Caribbean and Pacific countries to the needs of European capital. Schatan once wrote of world debt that ‘In a political dimension [this has meant] a true territorial conquest of the South by the North, without any apparent military conflict ... but in the name of the sacrosanct concepts of ‘development’ and ‘interdependence’.’[1] Those word resonate equally with respect to EPAs.
With little public profile and fanfare, EPA negotiations have been underway since September 2002 and must be completed by the end of 2006. In their purest form EPAs would essentially be free trade agreements that would comply with World Trade Organisation (WTO) rules. They would involve the elimination of import duties and taxes, and exclude no economic sector from the coverage of the free trade area and include agreements on trade in services and trade related areas.
Behind the use of positive-sounding words like “partnership” and “development”, critics contend that the EU – the most important trading partner of ACP countries – has little interest in a trade partnership that would support and strengthen the integration process in Africa. Rather, it is merely hammering home a brutal free trade regime through EPAs whereby ACP countries remain a market for European products and a source of cheap raw materials and labour.
Fears are that an unfettered focus on free trade without taking into account the essentially unequal relationship between the more developed EU and less developed ACP countries would result in more inequalities, not less. The Stop EPA campaign notes: “The overwhelming emphasis on liberalisation in the EPA negotiations proves that these negotiations are about expanding Europe's access to ACP markets, rather than about ACP countries’ development.” ACP countries would have to suffer the consequences of this drive for profit. Fragile markets would be flooded with cheaper European goods and the resulting knock-on effect would lead to higher unemployment and subsequent social decline.
EPAs would impact on every area of life in ACP countries. As the authors of articles in this edition of Pambazuka News make clear, EPAs in their current form would be catastrophic for the development of ACP countries. They would result not in development, but underdevelopment; not in partnership but in domination; not in integration but in fragmentation. Put bluntly, the looting would continue.
This special issue is dedicated to raising public awareness of the real nature of EPAs and to raise consciousness of what our governments are doing in our name
[1] J Schatan. World Debt: Who is to Pay? Zed Books, London 1987.
Articles in this edition
1. Economic Partnership Agreements and putting development first
EPAs mark a historic turning point in the history of trade agreements. But, writes Charles Abugre, any new trade agreement must help ACP countries to improve and diversify what they produce and export. This will require a radical rewrite of EPAs as they currently stand.
2. Economic Partnership Agreements or Broken Partnerships? The Case of West Africa
The language might be the same but the divide between what the European Union and the Africa, Caribbean and Pacific (ACP) countries want from Economic Partnership Agreements (EPAs) is huge, explains Bibiane Mbaye. The EU has largely bulldozed its way through the negotiations so far. “Not only has not a single commitment in favour of an agreement benefiting development been made by the EC, but additionally, the EC is actually using the EPAs to obtain what it has not been able to obtain multilaterally,” writes Mbaye.
3. Growing resistance to EPAs
Current EPA negotiations must be stopped, says Liz Dodd. These trade negotiations contain little for ACP countries and could actually increase poverty in some of the poorest countries in the world. Dodd explains that the EU is making grossly unfair demands over EPAs and is forcing controversial 'new' issues through the back door. EPAs are further undermining regional integration.
4. Learning the rules: The WTO and EPAs
EPA negotiations have been underway since September 2002 and must be completed by the end of 2006. On 25 July 2005, at a meeting of the World Trade Organisation's (WTO) Negotiating Group on Rules, WTO members will debate the introduction of flexibilities and special treatment for developing countries into rules governing regional trade agreements (RTAs). This is a crucial area for the ACP group of countries with regards negotiations over EPAs, writes Christina Weller.
5. Meeting Africa’s human development needs and the failure of EPAs
Far from being a development tool, Demba Moussa Dembele argues that Economic Partnership Agreements (EPAs) seek to take control of the continent’s resources and undermine its drive toward autonomous economic and social development. The result would be the transformation of Africa into a playground of multinational corporations. Trade and Africa’s ‘integration’ into the global economy must not be allowed to take place on terms dictated by Europe, Dembele concludes.
6. Negotiating a fair deal: Are trade agreements with the EU beneficial to women?
Gender issues are conspicuous by their absence from the 'hard' areas of EPA negotiations, such as trade and regional cooperation. In order to estimate the likely impact of future trade agreements on poor women and men, a more systematic approach to trade policy negotiations and to capacity building in ACP countries is required, writes Karin Ulmer.
7. Predictions for the economic partnership agreements negotiations: EU=1, ACP=0
Richard Kamidza is not optimistic about the outcome of EPAs, arguing that they will ultimately undermine Africa’s economies. Kamidza explains that negotiations are taking place in the context of a skewed relationship between Africa and Europe that already hinders development prospects. This means that the EU is unlikely to face strong opposition to its desire to fast track EPA negotiations.
8. Trade terms: A guide to EPAs
AND...Subscriber letters on the G8 and Pan-African Postcard. Subscribers please note that Pambazuka News will return to its usual format from next week.
ACKNOWLEDGEMENT: Pambazuka News would like to extend our thanks to Christian Aid, who supported the production of this edition.
Features
Economic Partnership Agreements and putting development first
2005-07-21
Charles Abugre
EPAs mark a historic turning point in the history of trade agreements. But, writes Charles Abugre, any new trade agreement must help ACP countries to improve and diversify what they produce and export. This will require a radical rewrite of EPAs as they currently stand.
EPAs are historic trade agreements. They will have an unprecedented impact on the development of some of the world’s poorest countries. They mark a radical shift in the relationship between these countries and their most important partner for aid and trade – the European Union. Previously characterised by preferential market access and aid for building trade capacity, this 'partnership' will oblige ACP (African, Caribbean and Pacific) countries to sign up to free trade agreements with the EU in order to maintain the market access on which producers and traders have come to depend and in order to benefit from the development assistance package that is tied to 'economic partnership agreements'. Christian Aid recognises the danger of this approach. If carried out in their current form, EPAs will undermine the development potential of many of the world’s poorest countries by exposing poor producers and traders to unequal competition and by tying the hands of governments to use trade policy selectively to support their agricultural and industrial development.
As the deadlines for the 6th ministerial conference of the World Trade Organisation in Hong Kong become more pressing, the attention of civil society is potentially diverted and the negotiating capacity of ACP countries is increasingly stretched. It is therefore important that the criticality of EPAs is not forgotten, not least because the two sets of negotiations are inextricably linked.
The discussions underway in the Rules Negotiating Group on regional trade agreements (RTAs) will establish the framework for EPAs. The call of the African Union to shift the timetable of EPA negotiations to let these basic rules be in place before substantive negotiations start is a logical one (African Union 2005). Currently ACP countries are trying to hit a moving target, or worse are trying to shoe-horn EPAs to fit flawed rules that were not designed for RTAs between developed and developing countries. WTO talks will also establish the baseline for EPAs. It is impossible to know what is the value of offers on market access until these talks are completed. It is also impossible to know what the impact will be of a new WTO deal on preference erosion – a critical issue for ACP countries, and one that the EU has committed to address under the Cotonou Agreement and as part of the Doha agenda.
Under EPAs, some of the world's poorest countries are being asked to open up their markets to products from Europe. The likely results are not hard to imagine. With their diverse range of products and muscle in the marketplace, European producers can outstrip ACP rivals in their domestic markets. European producers have enjoyed decades of subsidies, support and protection from their governments and have built strong, competitive industries. ACP countries – whose problem is not only that they cannot sell enough, but that they cannot produce enough – have not. They stand not only to lose existing markets, but also the potential to develop new ones.
According to the rhetoric, EPAs are designed for poverty reduction and to ensure the ACP's integration into the world market. After decades of structural adjustment, the majority of ACP countries are already integrated into international trade – it is the nature of this integration that is the problem. Since colonial times, ACP countries have been locked into feeding the European market with raw commodities and are often locked out when they try to export processed or value-added products.
Any new trade agreement between ACP countries and Europe must help them to improve and diversify what they produce and export. EPAs that focus on locking in an inexorable reduction in tariffs, and their eventual elimination, will not achieve this. No country has developed without the flexibility to raise as well as lower tariffs selectively to protect and encourage development of new industries.
In a recent report, Christian Aid exposed the already disastrous impact of enforced trade liberalisation on poor producers and looked ahead to the likely effects of further lowering tariffs in three African countries (Christian Aid 2005).
In Ghana and Senegal, the enforced lowering of import tariffs on products such as tomato paste and chicken parts has been followed by a deluge of products sold at cut-throat prices from Europe. These often undercut local goods, causing factories that add value to local produce to close down. This leads to great hardship in poor, rural communities where people's livelihoods rely on selling surplus food.
In Mozambique, liberalisation resulting from EPAs would open up a thriving milling industry to more cheaply produced wheat-flour from Europe. This would not only mean job losses in the milling industry, but would have a knock-on effect among the small but growing number of Mozambican farmers who produce wheat.
The studies show that not only is liberalisation often a harmful policy for poor people, but it will 'cap' development and leave countries dependent on the same narrow range of primary commodities.
EPAs are also threatening existing but fragile regional groupings among ACP countries. African countries in particular have long considered regional integration an important development strategy. It is both a means to overcome the limitations of small markets and an opportunity to pool resources for infrastructure and major production projects. But regional integration will not be advanced enough to kick-start growth by the time the EU expects African countries to start opening up markets to EU imports. This will mean that advantages accrue to the EU as the common and dominant partner in these trade arrangements. Opportunities to develop industries in goods that can be traded regionally will be lost.
EPAs are poorly designed to promote regional integration, regardless of timing. Least developed countries (LDCs) and non-LDCs have different incentives to sign up to EPAs, since LDCs benefit from the Everything But Arms initiative beyond 2007. The integrity of two long-standing African regional groupings – COMESA and SADC – is under threat because member governments of both groupings now have to choose under which they will negotiate a new trade deal with the EU.
Putting development first will require a radical rewriting of EPAs. EPAs provide potential advantages over preferential schemes as they enable the ACP to negotiate continued and improved access to EU markets that is legally secure. They are also attached to development assistance to enhance regional integration, to address supply-side constraints to production and to help cope with the costs of adjustment caused by trade reforms. Neither of these features of EPAs should be used to leverage commitments to liberalise. Instead, the EC must work with the ACP to ensure that development does indeed come first, and that ACP country governments are able to use trade policy flexibly to enable this to happen.
Progress towards this goal can be made in Hong Kong, if countries support measures to make effective special and differential treatment an integral part of WTO rules governing regional trade agreements.
* Charles Abugre is currently the head of policy and advocacy at Christian Aid. He has been a development activist in Ghana and many parts of Africa and Asia
* Please send comments to editor@pambazuka.org
References
African Union (2005) 'Ministerial declaration on EPA negotiations', June
Christian Aid (2005) For Richer or Poorer: transforming economic partnership agreements between Europe and Africa. London: Christian Aid
Economic Partnership Agreements or Broken Partnerships? The Case of West Africa
2005-07-21
Bibiane Mbaye
The language might be the same but the divide between what the European Union and the Africa, Caribbean and Pacific (ACP) countries want from Economic Partnership Agreements (EPAs) is huge, explains Bibiane Mbaye. The EU has largely bulldozed its way through the negotiations so far. “Not only has not a single commitment in favour of an agreement benefiting development been made by the EC, but additionally, the EC is actually using the EPAs to obtain what it has not been able to obtain multilaterally,” writes Mbaye.
Cooperative relations between the European Community (EC) and its former colonies of the African, Caribbean and Pacific (ACP) region are governed by a Partnership Agreement between the two parties. These agreements concern development aid (technical and financial assistance), economic and trade cooperation, and political cooperation. In June 2000 at Cotonou, the ACP countries agreed to draw up new trade agreements, putting an end to the trade regime in place under the preceding Lomé agreements.
Based on non-reciprocal preferences, accorded by the EC in favour of the ACP countries, Lomé was judged to be incompatible with World trade Organisation (WTO) agreements. The Cotonou agreement of which the principal stated objective is to combat, reduce and eventually eradicate poverty advocates the clinching of Economic Partnership Agreements (EPAs) between the EC and the different ACP regions. These EPAs are essentially free trade agreements. All the ACP regions are today engaged in the negotiation of the EPAs: Africa comprises four regions: SADEC, east and southern Africa, West Africa and Central Africa.
For the ACP countries and regions, the negotiation of an EPA is a first step that poses several challenges:
- Countries must for the first time negotiate the substance of trade cooperation with the EC, the leading global trading power, which is moreover their leading economic partner and provider of government development aid.
- The negotiations are taking place between each ACP region and the EC. This means the end of a single arrangement for all the ACP countries. The principle implications are partly a question of geographic groupings (several countries are at the same time members of several regional organisations) and partly that they entail more direct relationships than in multilateral negotiations.
- The EPA is a free trade agreement, which aims to establish free trade zones between the different ACP and EC regions, implying overt north-south regionalism and strongly unequal reciprocity and competition between the two entities at the level of development.
- The negotiations will be conducted concomitantly with other trade negotiations: at a regional level (ongoing process of regional integration) and at a multilateral level (WTO), with the notable necessity of maintaining coherence between the national development choices and commitments at different levels.
Last but not least, these regions have an extraordinarily short period of time available of three years (the negotiations at regional levels began for certain regions at the end of the year 2003, and for others in 2004) to achieve the process of regional integration or to create regional free trade zones which are required for the implementation of the EPAs and to finalise negotiations of the EPAs themselves.
In summary, and taking everything into account, the major challenge remaining is the capacity of the ACP regions in terms of analytical capacity to articulate and define their interests, and institutional capacity to allow them to conduct negotiations with the European Commission, in their best interests.
For the ACP regions as well as for the EC, the declared objective of the EPA is development. Its added value is financing development, and the favoured strategy is to lend support to existing processes of regional integration. However, even if the two parties are appearing to speak the same language, fundamental differences are emerging at each stage of the discussions regarding the real substance of the negotiations and of the future EPAs. Worse, the gap in understanding between the two parties seems to be growing as the discussions progress, which despite everything, are still going ahead.
Effectively, beyond the purpose of the EPA itself (is it a free trade agreement or economic and trade partnership?), the ways in which certain fundamental questions such as regional integration and development questions (West Africa constitutes ECOWAS and Mauritania) are being addressed in the EPA negotiation with West Africa, serve as examples that illustrate this dichotomy, and the double-speak of the European Commission and its neo-liberal free-trade orientation which prevails in the ongoing discussions.
The negotiation process, although not yet very advanced, has undergone important stages such as the adoption of the negotiating plan, and technical groupings linked with regional integration. Thematic discussions have begun and high-level civil servants of the two regions have already met twice over the course of 2005. They have debated amongst other matters, the structure of the reference framework of the EPAs without arriving at a consensus, and they have adopted the report together with the first working group on the Free Trade Zone, the Customs Union and the Facilitation of Trade.
The EPA negotiating plan between West Africa and the European Community was adopted on the 4 August 2004 after almost one year of discussions. The principal points of divergence are regional integration, support for ‘competivity’ as well as the questions pronounced at Singapore.
On regional integration, the position of West Africa was that it would first be necessary to strengthen regional integration with the help of the partnership, and to create a regional market before negotiating the substance of the free trade agreement between the two zones, West Africa and the EU. The EU however would not submit to the opening of trade negotiations before the finalisation of the process of regional integration in West Africa.
The second stumbling block concerned questions of financing adjustment costs and of strengthening ‘competivity’. When the plan was negotiated, the EC asked purely and simply for the paragraphs on the improvement of ‘competivity’ and the strengthening of capacities to be eliminated. According to the EU these were not appropriate to the EPAs, having already been addressed by the Cotonou Agreement and managed within the framework of the European Development Fund (EDF). West Africa considers on the one hand that it needs to strengthen its ‘competivity’ in order to compete with European products, and on the other hand, that it would have to withstand adjustment costs, and massive losses on receipts. It would therefore require additional resources dedicated solely to the problems and the shocks allied with the creation of the free trade zone between West Africa and the EU.
The third point of divergence concerns coherence with multilateral negotiations at the WTO, notably, opening discussions on the Singapore themes. West Africa did not willingly conform to the Doha and Cancun commitments, whilst the EU was most favourable about it.
The consensus reached after 10 months of discussions is aligned in substance with European positions. The strengthening of regional integration has been retained as a priority, but completion of the process will not be a preamble to trade negotiations. At the same time, improving ‘competitivity’, strengthening capacity and financing adjustment cost will be taken account of, although the responsibility for this section falls on West Africa; the EC is effectively not committing to additional resources whilst at the same time admitting – on the insistence of West Africa – that complementary resources might be found to these ends. This concession of the EU has however extremely reduced scope; the planning document sets out in effect that a possible complement to the allocated funds within the framework of the European Development Funds could be found, notably from the member states as well as from other donors.
As to the Singapore questions, the region persists in refusing to take part in any related discussions so long as the issue is not settled at the WTO. However the EC has achieved its ends, through the bias in the discussions on regional integration.
The EC is the principle beneficiary of this first ‘round’, which that negotiating plan sets out. The EC has succeeded in not having to commit to supporting the process of strengthening integration, neither to improving ‘competitivity’; and it has imposed that all the necessary supports should not directly be a part of the negotiation. This aspect is to be examined by the Task Force for Regional Preparation (TFRP), which is not a negotiating organ, rather a support to the negotiations. Moreover the TFRP is under the sole authority of the EDF. The EC has however not stopped in its tracks. That which it has not managed to obtain in the negotiating plan, notably on the Singapore questions, it has achieved very well in the operationalisation phase, and particularly on regional integration.
For the EC, strengthening regional integration signifies merely guaranteeing that the region proceeds to make reforms that facilitate access to markets and return on investments for European businesses. Whilst for the West African region, it is as much a question of acquiring the means to complete the integration process, and to strengthen and improve productivity and ‘competitivity’, as to permit access to the markets, and to offer a minimum of necessary guarantees to the partnership.
The negotiations on strengthening regional integration, notably the adoption of the thematic groupings, demonstrate that the region has continued to cede to the pressures of the EC without however gaining anything in exchange. The emphasis has been on the questions pronounced at Singapore which are to be found at least in three groups, and the questions of production remaining for the time-being non-existent. From the moment the region agreed to discuss investment and competition with the EU, within the framework of its integration process and creation of a free trade zone, the region gave up its position de facto, to refuse to negotiate on the Singapore questions.
The strengthening of regional integration could thus turn out to be a trap or a Trojan horse that would allow the Commission to regulate inter-regional commitments to suit itself. On the pretext that it is singly about processes and interregional commitments, the negotiations are able to take in all of the questions initially refused by the region. On the one hand therefore, the integration process risks being lost, and on the other hand, to resemble at the time of the creation of a free trade zone with the EU, linked by processes or commitments that were initially intra-regional.
The EC on its side has not budged an inch on the question of improving ‘competivity’ and productivity. From its point of view, this is principally about policies and development strategies strictly internal to the region, and the EC is not to intervene. Justifying itself elsewhere through dogmatic arguments, it has reaffirmed that the only change in policies would necessarily be to entail growth and development.
The thematic negotiations are only reinforcing the orientation wanted by the EU, in favour of a purely commercial agreement, as the results as well the orientation of the negotiations are demonstrating. The insistence and pressures of the EC on questions such as the facilitation of trade and politics of competition, besides investments and public markets, have paid off in the end. West Africa on the other hand supports that the EPA must encompass both aspects of development and trade. Concerning the Singapore questions, West Africa agreed to discussions on investment, trade facilitation and competition policy, but this does not extend to discussing the attribution of public markets within the framework of regional integration.
Despite a common language, the facts and the ongoing discussions demonstrate that for the EC, the EPA is a purely commercial agreement, whilst for the ACP countries it is chiefly concerned with an economic and trading partnership. The ACP countries have agreed to further open their markets, on the condition of receiving support for the adjustments and the necessary transformations of their economies to make them more competitive.
Civil society organisations are of the opinion that the EPA negotiations, such as they are conceived by the EC as a free trade agreement, must stop. Not only has not a single commitment in favour of an agreement benefiting development been made by the EC, but additionally, the EC is actually using the EPAs to obtain what it has not been able to obtain multilaterally.
The negotiating mandate from the heads of States of the West Africa region places development at the centre of the EPA negotiations. But according to the EC, questions of improving ‘competivity’ do not directly form a part of the EPA negotiations. Therefore is this dialogue falling on deaf ears? It would seem as if the current tendency – that the EC will easily obtain the desired free trade agreements, and that West Africa will have to say goodbye to its efforts of industrialisation – will be confirmed.
* Bibiane Mbaye is from the Senegal based international non-governmental organisation ENDA.
* Translated from the original French version by Stephanie Kitchen. Please send comments to editor@pambazuka.org
La negociation des Accords de Partenariat Economique ou le partenariat en panne: Le cas de l'Afrique de l'Ouest
Pour les régions ACP comme pour la CE, l’objectif déclaré des Accords de Partenariat Economique (APE) est le développement. Pourtant Bibiane Mbaye Gahamanyi du ENDA TIERS MONDE expose les raisons pourquoi malgré un langage commun, les faits et les discussions en cours montrent que pour la CE, l’APE est un accord purement commercial tandis que pour les ACP il s’agit bien d’un partenariat économique et commercial. Il arrive à la conclusion que le CE obtiendra facilement les accords commerciaux souhaités et que l’Afrique de l’Ouest devra dire adieu à ses efforts d’industrialisation.
Bibiane Mbaye
Les relations de coopération entre la Communauté Européenne et ses anciennes colonies d’Afrique, Caraïbes et Pacifique sont régies par un Accord de Partenariat entre les deux parties. Ces accords concernent l’aide au développement (assistance technique et financière), la coopération économique et commerciale ainsi que la coopération politique. En juin 2000 à Cotonou, les ACP ont accepté de conclure de nouveaux accords commerciaux et de mettre fin au régime commercial en vigueur sous les précédents accords de Lomé. Basé sur des préférences non réciproques accordées par la CE en faveur des ACP, Lomé est jugé incompatible avec les accords de l’OMC. L’Accord de Cotonou dont l’objectif principal est la lutte contre la pauvreté, sa réduction et a terme son éradication, préconise la conclusion d’Accords de Partenariat Economique entre la CE et les différentes régions ACP. Ces APE sont essentiellement des accords de libre échange. Toutes les régions ACP sont à ce jour engagées dans la négociation de l’APE : L’Afrique compte quatre régions : la SADEC, la région Est et Australe ainsi que l’Afrique de l’Ouest et l’Afrique Centrale
Pour les pays et régions ACP, la négociation d’un APE est une première qui les met face à plusieurs défis:
- Ils doivent pour la première fois négocier le contenu de la coopération commerciale avec la CE première puissance commerciale mondiale qui est aussi leur premier partenaire économique et leur premier pourvoyeur d’Aide Publique au Développement
- La négociation se déroulera entre chaque région ACP face à la CE. C’est la fin d’un régime unique pour tous les pays ACP. Les principales implications sont d’une part, la question des configurations géographiques (plusieurs pays faisant partie en même temps de plusieurs organisations régionales) et d’autre part, le rapport de force plus direct dans cette négociation que dans les négociations multilatérales
- L’APE est un accord de libre échange visant l’établissement de zones de libre échange entre les différentes régions ACP et la CE. Un régionalisme ouvert nord-sud, impliquant la réciprocité et la compétition entre deux entités au niveau de développement fortement inégal.
- Ces négociations seront menées concomitamment avec d’autres négociations commerciales au niveau régional (processus d’intégration régionale en cours) et multilatéral (OMC) notamment, d’où la nécessité de garder une cohérence entre les choix nationaux de développement et les engagements aux différents niveaux.
- Last but not least, ces régions disposent d’une période extraordinairement courte de 3 ans (les négociations au niveau des régions ont débutés pour certaines régions à la fin de l’année 2003 et pour d’autres en 2004) pour achever leur processus d’intégration régionale ou de créer des zones de libre échange régionales nécessaires à la mise en uvre de l’APE ainsi que de mener et conclure la négociation de l’ APE elle même.
En résumé et compte tenu de tout ceci, le défi majeur reste celui des capacités des régions ACP, capacités analytiques pour articuler et définir leurs intérêts et capacités institutionnelles leur permettant de mener les négociations face à la Commission Européenne, au mieux de leurs intérêts.
Pour les régions ACP comme pour la CE, l’objectif déclaré de l’APE est le développement, sa valeur ajoutée est le financement du développement, la stratégie privilégiée est l’appui aux processus d’intégration régionale existants. Cependant, si les deux parties semblent s’entendre, quant au langage, sur les objectifs et les stratégies de l’APE, des divergences fondamentales apparaissent à chaque étape des discussions quant au contenu réel des négociations et du futur APE. Pire, l’écart sur la compréhension des uns et des autres semble se creuser au fur et à mesure de l’avancée des discussions qui malgré tout suivent leur cours.
En effet, au-delà de l’objet de l’APE lui-même (accord commercial de libre échange ou partenariat économique et commercial ?), le traitement de certaines questions fondamentales telles que l’intégration régionale ainsi que les questions de développement, dans la négociation APE avec l’Afrique de l’Ouest (A.O. constitué de la CEDEAO + la Mauritanie) serviront d’exemples pour illustrer cette dichotomie, le double langage de la Commission Européenne et l’orientation libérale libre échangiste qui prévaut dans les discussions en cours.
Le processus de négociation bien que n’étant pas encore très avancé, a connu des étapes importantes telles que l’adoption de la feuille de route des négociations et l’adoption des groupes techniques conjoints sur l’intégration régionale. Les discussions thématiques ont commencé et les hauts fonctionnaires des deux régions se sont déjà réunis deux fois au cours de l’ année 2005. Ils ont discutés entre autres de la structure du cadre de référence de l’APE sans arriver à un consensus et ils ont adoptés le rapport conjoint du premier groupe de travail sur la Zone de Libre Echange, l’Union Douanière et la Facilitation des Echanges.
La feuille de route de la négociation APE entre l’Afrique de l’Ouest et la Communauté Européenne a été adoptée le 4/8/04 après presque un an de discussions. Les principaux points de divergence concernaient l’intégration régionale, le soutien à la compétitivité ainsi que les questions dites de Singapour.
Sur l’intégration régionale, la position de l’A.O. était qu’il fallait d’abord, avec l’aide du partenaire, renforcer l’intégration régionale et créer le marché régional avant de négocier le contenu de l’accord de libre échange entre les deux zones A.O. et U.E. Celle ci quant à elle, n’entendait pas assujettir l’ouverture de négociations commerciales au préalable de l’accomplissement du processus d’intégration régionale de l’A.O.
Le second point d’achoppement concernait la question du financement des coûts d’ajustements et du renforcement de la compétitivité. Lors des négociations sur la feuille de route, la CE demandait purement et simplement de supprimer les paragraphes sur l’amélioration de la compétitivité et le renforcement des capacités qui pour elle n’avaient pas leur place dans l’APE, ces questions étant déjà traitées dans l’Accord de Cotonou et gérées dans le cadre du Fonds Européen au Développement (FED). L’A.O.considérait que d’une part il lui fallait renforcer sa compétitivité pour faire face aux produits européens et que d’autre part elle aurait à supporter des coûts d’ajustements et des pertes massives de recettes. Il fallait par conséquent des ressources additionnelles consacrées uniquement aux problèmes et aux chocs liés à la création de la zone de libre échange entre les deux entités AO et UE.
Le troisième point de divergence concernait la cohérence avec les négociations multilatérales à l’OMC notamment l’ouverture des discussions sur les thèmes de Singapour. L’A.O. n’en voulait pas conformément aux engagements de Doha et de Cancun tandis que la CE y était très favorable.
Le consensus trouvé après 10 mois de discussions s’aligne en substance sur les positions européennes. Le renforcement de l’intégration régionale garde sa priorité, mais l’achèvement du processus ne sera pas un préalable aux négociations commerciales. De même, l’amélioration de la compétitivité, le renforcement des capacités et le financement des coûts d’ajustements seront pris en compte bien que la responsabilité de ce volet incombe à l’A.O., la CE ne prend en effet pas l’engagement de fournir des ressources additionnelles, tout en admettant tout de même, suite à l’insistance de l’AO que des ressources complémentaires pourraient être recherchées à cet effet. Cet assentiment de la CE a cependant une portée extrêmement réduite, la feuille de route précise en effet, qu’un éventuel complément aux fonds alloués dans le cadre du FED pourrait être recherché notamment auprès des Etats membres ainsi que d’autres bailleurs.
Quant aux questions de Singapour, la région persiste a refuser toute discussion y relative tant que cette question ne sera pas réglée au niveau de l’OMC. Cependant, la CE est arrivée à ses fins par après, par le biais de discussions sur l’intégration régionale.
La CE est la principale gagnante de ce premier « round » que constitue la feuille de route, elle a réussit à ne pas prendre d’engagement quant à l’appui au processus de renforcement de l’intégration ni pour l’amélioration de la compétitivité et à imposer que tout ce qui concerne les appuis nécessaires ne fassent pas directement partie de la négociation. Cet aspect sera examiné au niveau de la Task Force de Préparation Régionale (TFPR) qui n’est pas un organe de négociation mais un organe d’appui aux négociations, de plus la TFPR n’est compétente que pour le FED. La CE ne s’est cependant pas arrêtée en si bon chemin. Ce qu’elle n’avait pas pu obtenir dans la feuille de route sur les questions de Singapour notamment, elle l’a bel et bien obtenue dans l’opérationnalisation de celle ci et en particulier sur l’intégration régionale. La 1ère étape des négociations entre les 2 régions appelée, renforcement de l’intégration régionale, consiste à se mettre d’accord sur le régime commercial de la région.
Pour la CE renforcer l’intégration régionale signifie uniquement obtenir de la région qu’elle procède aux réformes qui facilitent l’accès aux marchés et le retour de l’investissement aux entreprises européennes. Tandis que pour la région il s’agirait autant d’acquérir les moyens d’achever son processus d’intégration, de renforcer et améliorer la productivité et la compétitivité de la région que de permettre un accès aux marché et d’offrir un minimum de garanties nécessaires au partenaire. La composition des groupes techniques selon les uns et les autres permet d’en juger :
L’Afrique de l’Ouest a constitué 8 groupes techniques :
1. Zone de Libre Echange, Union Douanière, Facilitation des Echanges
2. Normes, Contrôle de Qualité, Services Connexes, SPS, OTC
3. Concurrence, Propriété Intellectuelle
4. Investissements
5. Agriculture
6. Pêche
7. Produits non agricoles (industriels et de l’artisanat)
8. Services
Après discussions les 5 groupes conjoints suivants ont été retenus :
1. Zone de libre échange, union douanière et facilitation des échanges
2. Normalisation, contrôle de qualité et services connexes, mesures SPS et OTC
3. Autres domaines liés au commerce : Propriété intellectuelle et concurrence
4. Investissements et Services
5. Analyses sectorielles : agriculture, pêche, produits non-agricoles
Les négociations sur le renforcement de l’intégration régionale notamment l’adoption des groupes thématiques montrent que la région a continué à céder aux pressions de la CE sans pour autant rien gagner en échange. L’accent est mis sur les questions dites de Singapour qui se retrouvent au moins dans 3 groupes, les questions de production étant pour le moment inexistantes. Dès lors qu’elle a accepté de discuter avec l’UE sur l’investissement et la concurrence dans le cadre de son processus d’intégration et de création de zone de libre échange, la région annulait de fait sa position qui consistait à refuser les négociations sur les questions de Singapour avant que cette question ne soit réglée à l’OMC.
Le renforcement de l’intégration régionale pourrait ainsi se révéler un piège ou un cheval de Troie qui permettrait à la Commission de régenter les engagements intra régionaux à sa convenance. Sous prétexte qu’il s’agit uniquement de processus et d’engagements intra régionaux, la négociation peut englober toutes les questions initialement refusées par la région. Celle ci risque d’une part de voir son processus d’intégration lui échapper et d’autre part de se retrouver lors de la création de la zone de libre échange avec l’UE liée par des processus ou des engagements initialement intra-régionaux.
La CE de son côté n’a pas varié d’un iota sur la question de l’amélioration de la compétitivité et de productivité. Ceci de son point de vue relève de politiques et de stratégies de développement strictement internes à la région et la CE ne saurait intervenir. S’appuyant par ailleurs sur des arguments dogmatiques, elle ré-affirme que le seul changement de politiques entraînerait nécessairement la croissance et le développement.
Les négociations thématiques ne font que renforcer l’orientation voulue par l’UE en faveur d’un accord purement commercial comme les résultats ainsi que l’orientation des négociations le montre. L’insistance et les pressions de la CE sur des questions telles que la facilitation du commerce, la politique de concurrence ainsi que les investissements et les marchés publics ont fini par payer. L’Afrique de l’Ouest quant à elle soutien que l’APE doit englober les deux aspects, développement et commerce. Concernant les questions de Singapour elle a accepter de discuter de l’investissement, la facilitation du commerce et la politique de concurrence mais n’entend pas discuter de l’attribution des marchés publics fut ce dans le cadre de l’intégration régionale.
Malgré le langage commun, les faits, les discussions en cours montrent que pour la CE l’APE est un accord purement commercial tandis que pour les ACP il s’agit bien d’un partenariat économique et commercial. Les ACP acceptent d’ouvrir encore plus leurs marchés à condition de recevoir un appui pour les ajustements et les transformations nécessaires à leurs économies pour les rendre plus compétitives et à même de bénéficier de cette ouverture et de l’accès au marché européen.
Pour les organisations de la société civile, les négociations sur un APE tel qu’il est conçu comme un accord commercial de libre échange doivent s’arrêter. Non seulement aucun engagement en faveur d’un accord favorisant le développement n’est pris par la CE, mais en plus, celle ci utilise l’APE pour obtenir ce qu’elle n’a pu obtenir au niveau multilatéral.
En ce qui concerne l’Afrique de l’Ouest le mandat de négociation des chefs d’Etats de la région place le développement au cur de la négociation de l’APE, selon la CE, les questions d’amélioration de la compétitivité ne font pas directement parties de la négociation APE , alors, dialogue de sourd ? Il semble si la tendance actuelle se confirmait, que la CE obtiendra facilement l’accord commercial souhaité et que l’Afrique de l’Ouest devra dire adieu à ses efforts d’industrialisation .
Growing resistance to EPAs
2005-07-21
Liz Dodd
Current EPA negotiations must be stopped, says Liz Dodd. These trade negotiations contain little for ACP countries and could actually increase poverty in some of the poorest countries in the world. Dodd explains that the EU is making grossly unfair demands over EPAs and is forcing controversial 'new' issues through the back door. EPAs are further undermining regional integration.
The Africa, Caribbean and Pacific (ACP) states speak out
At a meeting in London organised by Traidcraft in June, Kenyan Trade Minister Dr Kituyi issued a strong challenge on economic partnership agreements (EPAs). He called on the European Union (EU) to revisit their negotiating mandate in order to ‘whittle out’ mercantilist interests such as the demand for reciprocal trade.
Dr Kituyi made his bold challenge in the presence of the UK’s trade minister, Ian Pearson MP, just days ahead of the UK taking up the presidency of the EU. Addressing an audience of parliamentarians, ambassadors and journalists, Dr Kituyi said if the EPA negotiations require greater concessions than those at the WTO, then ‘to make poverty history, we will also have to make EPAs history’.
On trade liberalisation more broadly, Dr Kituyi commented that, ‘lowering your tariff guard to your neighbours is like inoculation, but if you open up to the EU that’s a full dose of the virus.’ He described the devastating effects of liberalisation on African economies and referred to the ‘lost generation’ of the 1990s who have been denied an education. Dr Kituyi’s challenge came hard on the heels of a strong statement on the negotiations issued by the Africa Union trade ministers at their Cairo conference. In particular the statement reiterated the position that the so-called ‘Singapore issues’ should remain outside the EPA negotiations.
Just days later the ACP Council of Ministers expressed ‘grave concern’ that the negotiations had not proceeded in a satisfactory manner and had failed to start addressing most issues of interest and concern to the ACP. The statement also highlighted the disconnect between what EU Trade Commissioner Peter Mandelson was saying in public and what his negotiators were actually doing in the negotiating sessions. The ministers reinforced Dr Kituyi’s request that the EU rethink their negotiating directives to take on board ACP concerns.
A catalogue of disappointments
This flurry of statements is clear evidence that ACP governments are getting increasingly tired of the EU saying one thing and then doing another on EPAs. The EU talk about EPAs as instruments for development, but then refuse to listen to what ACP governments want. The EU are unhappy that ACP countries’ own development plans and priorities do not include giving the EU preferential access for their markets in return for nothing. The frustration of ACP governments is understandable. At every turn in the talks, the ACP’s legitimate concerns and positions appear to be put on the back burner.
This process began way back at the start of discussions when ACP countries did not want to negotiate EPAs, but the EU insisted that they were necessary to comply with WTO rules. Effectively the ACP were being given no choice. For some ACP countries the only alternative to an EPA on offer would see their market access to Europe slashed.
So the ACP agreed – reluctantly - with the proviso that WTO rules might be changed to be more flexible and that alternatives would be provided for those countries that felt they were not in a position to sign up to a free-trade EPA.
So far, the ACP has received no support from the EU on either of these key issues. Similarly at the end of the first phase of the talks, the ACP side wanted a binding agreement on issues that were critically important to them – such as additional resources to compensate for the adjustment costs involved in EPAs. The EU refused to agree.
Most recently the UK government came out with a position paper on the EPA negotiations, raising some concerns and questions. They were promptly disciplined by the European Commission (EC), who in a letter sent to all the EC delegations in ACP countries called the UK position ‘a major and unwelcome shift
Some recommendations move well away from agreed EU positions.’ The letter went on to say that ‘Peter Mandelson is taking up our concerns and will press for a revised UK line.’
Given the weight of this evidence the ACP are justified in questioning the negotiating faith of the EU.
EPAs: pro development or a hidden menace?
The EU want to sell EPAs as good for development. And they seem determined to drag ACP countries through the process. But the ACP are not playing ball in quite the way the EU would like.
And there are good reasons for the ACP’s fears:
The EU is making grossly unfair demands
Despite the fact that the poorest countries (least developed countries, or LDCs) do not have to open their economies as part of the WTO talks, they are being asked to do so as part of EPAs. At the moment 39 of the 77 ACP countries are classified as least developed. Under EPAs, it will be very difficult for them to prevent cheap, subsidised EU goods flooding their markets and putting local farmers and small-scale manufacturers out of business.
The EU is forcing controversial ‘new issues’ through the back door
Following resistance from developing countries and campaigning by NGOs around the world, three of the highly controversial ‘new issues’ (investment, competition and transparency in public procurement) are now off the WTO agenda. But they are being pushed through the ‘back door’ of EPAs. In some areas the EU is pushing for EPAs to go much further on these issues than was ever demanded at the WTO.
EPAs are undermining regional integration
EPAs should contribute to the process of regional integration between ACP countries. But in negotiations so far the opposite is happening. EPAs put the poorest countries in an impossible dilemma: should they continue with their ‘non-reciprocal’ duty-free, quota-free access into the European market, but leave their regional grouping or should they open up to the EU and stick with their regional partners? The problem is that whilst the poorest have nothing to gain from EPAs, their slightly less poor neighbours (non-LDCs) have a great deal to lose.
Take East Africa. The East African Community includes Kenya, Uganda and Tanzania. The countries are committed to working together and are in the process of establishing a customs union and a joint currency. They have already set up an East African Parliament. But with EPAs comes a big problem. Uganda and Tanzania are LDCs, Kenya is not. As LDCs, Uganda and Tanzania already have duty-free and quota-free access into the EU market under the Everything But Arms agreement. Uganda and Tanzania have nothing to gain from an EPA. But if they refuse to negotiate, while Kenya goes ahead, how will they stop EU goods entering their markets via Kenya and the customs union? If EPAs are supposed to support and strengthen regional integration – why has it put East Africa in this impossible situation?
Impact fears
There are serious concerns about the impact that EPAs will have on poor and vulnerable groups in ACP countries:
- Company closures and job losses. As European goods begin to enter ACP countries without facing any tariffs, local businesses will be unable to cope with the competition and will be forced out of business. This is likely to be particularly damaging in the agricultural sector where ACP countries are most dependent and where the EU gives the most support to its own producers.
- Glass ceiling. ACP countries are not just concerned about losing out to European competition in the goods they already produce. Because European manufactured goods will be entering African countries without paying any trade taxes, they may be cheaper. For small businesses struggling to add more value to their products by moving into new industries such as manufacturing or food processing this will be a real blow, potentially consigning countries to remain simply exporters of raw materials and basic goods. This would be deeply damaging to national development plans in ACP countries.
- Loss of vital government revenue. Many ACP countries rely heavily on the money they get from levying customs taxes for their normal expenditure. Opening up to the EU will reduce that revenue base and will mean less money for social expenditure. For example, there are estimates that between 25% and 30% of all Namibian government revenue was derived from this type of trade tax between 1990 and 1996.
What would this mean for a country like Kenya?
- The loss of tax revenue will make it harder for the government to implement new plans to help micro enterprises.
- Unfair competition from European goods still heavily supported by the EU under the Common Agricultural Policy could devastate Kenya’s dairy and cereals sectors – both are made up of thousands of small farmers.
- Kenya’s ability to diversify and develop an advantage in value-added areas could also be undermined. The sector most at risk here is the textiles and garments industry.
- The Kenyan government has plans to keep a portion of government contracts for micro-enterprises. EPAs could mean they are no longer allowed to do this.
A call to action
EPA negotiations so far contain little for ACP countries, and could actually increase poverty in some of the poorest countries in the world. European groups are stepping up the pressure on EPAs in direct response to a call from our ACP civil society partners.
Traidcraft along with partners from across the UK and Europe are calling for the European Union member states to wake up to the threat of EPAs and immediately:
- Stop the current negotiations
- Remove the demand for the opening up of reciprocal trade and for new issues from their negotiating mandate
- Work with the ACP to reform WTO rules
- Work urgently to investigate alternatives that leave ACP countries better – not worse – off, as was promised in the Cotonou Agreement
For more information visit: www.traidcraftinteractive.co.uk or www.stopepa.org
* Liz Dodd works for Traidcraft in the UK.
* Please send comments to editor@pambazuka.org
Learning the rules: The WTO and EPAs
2005-07-21
Christina Weller
EPA negotiations have been underway since September 2002 and must be completed by the end of 2006. On 25 July 2005, at a meeting of the World Trade Organisation's (WTO) Negotiating Group on Rules, WTO members will debate the introduction of flexibilities and special treatment for developing countries into rules governing regional trade agreements (RTAs). This is a crucial area for the ACP group of countries with regards negotiations over EPAs, writes Christina Weller.
On 25 July 2005, at a meeting of World Trade Organisation's (WTO) Negotiating Group on Rules, WTO members will debate the introduction of flexibilities and special treatment for developing countries into rules governing regional trade agreements (RTAs).
For the African, Caribbean and Pacific (ACP) group of countries, these are high-stakes issues: effective provisions for special and differential treatment will mean that development can truly be put first in economic partnership agreements (EPAs) and that trade reforms can be made to fit with national and regional development strategies. Without them EPAs will be bound to impose arbitrary and stringent timeframes for the elimination of tariffs on the majority of imports from the EU.
Over the last two months, there has been a flurry of activity in a notoriously difficult and slow area of WTO negotiations in recognition of the need to address this important anomaly in WTO rules.
Last month, the African Union (AU) called for WTO Rules governing regional trade agreements (RTAs) to be 'appropriately amended to allow for necessary special and differential treatment, less than full reciprocity principles and explicit flexibilities that are consistent with the asymmetry required to make EPAs pro-development' (AU 2005).
The European Commission (EC) only a few weeks previously made its own submission which, while it contains no concrete proposals, recognises that 'the developmental dimension of regional trade agreements must also constitute an integral part of the clarification and improvement of WTO rules for RTAs' (WTO 2005b) The WTO secretariat's paper of the same month (Crawford and Fiorentino 2005) describes the application of criteria of reciprocal and comprehensive trade liberalisation as a 'peculiarity' and recognises the 'formidable challenge of transition' that such RTAs would pose, citing EPAs as a case in point. These issues will be discussed this month when the EC's submission and redrafting of the ACP's initial paper on the topic (which put these issues on the table back in April 2004) will be debated by the Rules Negotiations Group.
The momentum for addressing this problem has not come too soon. EPA negotiations have been underway since September 2002 and must be completed by the end of 2006. Some regions are already well into substantive negotiations. Until the systemic issues of these WTO rules are resolved, negotiators are at best negotiating blind and at worst being obliged to look for least worst options that might allow them to protect their most important sectors now, even though this might leave their hands tied for the future.
What needs to change?
By some quirk of WTO history, flawed rules have meant that up until now the well-established principles of special and differential treatment and less than full reciprocity have not been applied to an area where they are strongly justified, that is in RTAs between unequal trading partners (see especially Onguglo and Ito 2003).
Because RTAs between developed and developing country partners were not envisaged when these rules were devised, developing country governments are constrained by overly strict rules from obtaining in negotiations the necessary flexibility to pursue agricultural and industrial development strategies, with the result that their producers and traders are pitted against competition from more powerful, efficient and frequently subsidised counterparts in developed countries.
Just as in RTAs between two (sets of) developed countries, developing countries are currently legally required to liberalise 'substantially all trade' in goods over a 'reasonable' period of time (interpreted as 10–12 years). Note that RTAs between two developing country groupings are governed by the Enabling Clause of 1979 and are therefore exempt from these requirements. GATS Article V, also under review as part of the Doha Round, already contains provisions for flexibility for developing countries within north–south agreements, although these have also been criticised as ineffective.
The Doha Declaration (para 29) mandated members to clarify and strengthen the provisions of Article XXIV of the GATT 1994, taking into account development aspects of RTAs.
Although there is an emerging consensus to introduce special and differential treatment into RTA rules, the nature of this special treatment is not agreed. The ACP's first proposal was considered too extreme by some, including the EC. Some countries, for example Japan, questioned the inclusion of 18 years as 'indicative' of an extended transition period.
The EC's approach is to 'clarify the flexibilities already provided within the existing WTO rules on RTAs, in order to give greater security to developing country parties to RTAs'. In the case of EPAs, the EC (and academics) have calculated that using this asymmetry, ACP countries could exclude their sensitive sectors from liberalisation. The EC often cites the example of the EU's own Trade and Development Cooperation Agreement with South Africa whereby the EU liberalised a greater percentage of its own trade so that South Africa needed only to liberalise 86%, the averaging out of coverage being deemed sufficient to comply with WTO rules. A number of RTAs have also exceeded the accepted 10–12-year transition period.
However, this approach does not take into account the differing regional interests in negotiations, and therefore undermines the process of regional integration that EPAs are intended to support (Stevens and Kennan 2005). The asymmetrical option also takes a static view, the need for flexibility being calculated on current trade flows. To develop, ACP countries need to have flexible trade policies that will allow them to diversify into value-added production. This will require them to be able to raise tariffs in the future in some areas currently not important to their external trade.
The alternative view is that there should be no compulsion for developing countries to 'offer' concessions on market access to 'win' increased market access from developed countries. This is the view shared by EU and ACP civil society. It is consistent with the findings of the Commission for Africa that countries should not be forced to liberalise, including through trade negotiations. It is the only way to properly ensure that trade agreements are supportive to development strategies and that the declaration by ACP ministers that 'RTA rules should take into account the specificities and development needs' of ACP states can be addressed.
Since developing countries have already undertaken a large amount of 'autonomous' liberalisation under the influence of the Bretton Woods institutions and donors, the idea that they should offer more access to, for example, the EU in return for market access that should be (and for the ACP countries already was under previous Lomé arrangements) unilaterally granted by developed countries, is perverse.
The limited flexibility that remains to these countries is important and should not be further curtailed. Their ability to raise as well as lower tariffs as industrial development progresses needs to be maintained and strengthened. This development is difficult to predict and the inexorable lowering of tariffs over a fixed transition period has proven harmful in the past. These damaging effects far outweigh the already questionable benefits of encouraging foreign investment through 'locking in' reforms. Instead market opening should be linked directly to development needs – benchmarks instead of arbitrary timeframes should govern liberalisation commitments and 'escape clauses' should be introduced so that harmful policies can be reversed as necessary.
The concept of less than full reciprocity, used by the African Union in its statement, is not well defined. This terminology in the enabling clause exempted developing countries from obligations to offer any concessions in market opening. Under current market access negotiations, the same terminology implies that developing countries will make some concessions, but that these would be significantly lower than those for developed countries. The tenor of the AU's statement suggests that the onus is on maximising flexibility within the current political realities.
Is a consensus likely to emerge?
As with other areas of the Doha agenda, the chair of the rules group will be required at least to make a progress report at the WTO General Council meeting this month. At the time of writing, there is much speculation about expectations for July. The idea of 'first approximations' is a vague one, and as progress is painfully slow in key areas, it is unclear whether anything as ambitious as draft agreements can be expected. Yet the intention still holds that the Hong Kong ministerial meeting should not be the forum for significant brokering of agreements.
Rules talks are notoriously slow and difficult as they tinker with the infrastructure of international trade rules, tend to open up controversial issues, inconsistencies or lack of definitions that may have benefited some members over others. This is certainly the case for RTA rules. The number of RTAs has increased dramatically over recent years (World Bank 2004). These RTAs have varied significantly in scope and transitional arrangements (WTO 2002). If proposals for 'grandfathering' (i.e. retrospective application) of changes in rules are accepted, then these talks could be opening Pandora's box.
A further political complication is posed to the ACP countries by the EC’s agenda to target larger developing countries, such as India and Brazil, in this round. In its submission, the implied quid pro quo for special and differential treatment provisions is that there be an acceptance that RTAs between larger developing countries become subject to stricter disciplines and no longer be governed by the enabling clause (WTO 2005b).
The position of the USA is not yet clear. Their main interests in rules negotiations lie elsewhere (for example in anti-dumping). In theory, they could have an interest in also seeking provision of special and differential treatment in RTAs, as their own trade arrangements with developing countries, for example AGOA (the African Growth and Opportunity Act), are not in conformity with current rules. However, the seeking of waivers for these arrangements suggests that this might not be the case in practice.
Despite this, there does seem to be convergence around the need to introduce special and differential treatment in these rules, with even 'hardliners' who are looking for their most strict application now accepting this principle (WTO 2005a).
ACP countries with other WTO members now face a greater challenge of making this principle work in practice. The EC must hold firm to its commitments to put development first in EPAs and to ally with the ACP countries to make any necessary changes in WTO rules to ensure their legality. [Article 36, Cotonou Agreement]
* Christina Weller works for Christian Aid on issues of trade.
* Please send comments to editor@pambazuka.org
References
African Union (AU) (2005) 'Ministerial declaration on EPA negotiations', 5-9 June 2005, Cairo, Egypt
Crawford J-A and Fiorentino R (2005) 'The changing landscape of regional trade agreements', Discussion Paper 8, WTO, Geneva
Onguglo B and Ito T (2003) 'Towards special and differential treatment in Article XXIV of GATT 1994 in the context of economic partnership agreements', Brussels: ACP Secretariat
Stevens, C and Kennan J, 2005, 'EU–ACP economic partnership agreements: the effects of reciprocity', Briefing Paper, June, Institute of Development Studies (IDS), University of Sussex
World Bank (2004) Global Economic Prospects 2004, Washington DC: World Bank
World Trade Organisation (WTO) (2002) 'Coverage, liberalisation process and transitional provisions in regional trade agreements: background survey by the secretariat, Geneva: WTO, Geneva
World Trade Organisation (WTO) (2005a) 'Submission on Regional Trade Agreements by Australia', TN/RL/W/180. Geneva: WTO
World Trade Organisation (WTO) (2005b) 'Submission on regional trade agreements by the European Communities', TN/RL/W/179. Geneva: WTO
Meeting Africa’s human development needs and the failure of EPAs
2005-07-21
Demba Moussa Dembele
Far from being a development tool, Demba Moussa Dembele argues that Economic Partnership Agreements (EPAs) seek to take control of the continent’s resources and undermine its drive toward autonomous economic and social development. The result would be the transformation of Africa into a playground of multinational corporations. Trade and Africa’s ‘integration’ into the global economy must not be allowed to take place on terms dictated by Europe, Dembele concludes.
In February 2000, the new framework agreement, signed between the African, Caribbean and Pacific (ACP) countries and the European Union (EU), marked a major departure from previous agreements in that it opened the door to a profound transformation of the relationships between the two groups. Arguing that the new international trade environment requires that both parties comply with the rules of the World Trade Organisation (WTO), the EU has compelled its ACP partners to engage in separate free trade zones, dubbed 'economic partnership agreements' (EPAs), whose fundamental aim is to remove the trade preferences granted to ACP countries and establish reciprocity in trade relations:
Negotiations of the economic partnership agreements shall aim notably at establishing the timetable for the progressive removal of barriers to trade between the Parties, in accordance with the relevant WTO rules. (EU 2000, Article 37-7).
However, the EU insists that the partnership agreements will be negotiated only with countries which feel that their economies are able to sustain competition from European products. All the other non-least developed countries (LDCs) that do not fall within this category would be granted some undefined 'alternative possibilities'. The necessity to bring the ACP/EU relationships into compliance with the WTO framework stems from the belief that it would be almost impossible to get a waiver for an indefinite period for maintaining the trade preferences granted to ACP countries. In fact, the EU claims that under WTO rules, these preferences are both discriminatory – applying only to ACP countries rather than all LDCs – and non-reciprocal – European exports are not granted similar preferences in ACP markets.
Apart from the need to comply with the WTO provisions, the economic partnership agreements are intended to achieve two other objectives. One of them is the necessity to maintain the 'special relationship' established between Europe and the ACP countries. From the EU perspective, the necessity to comply with the rules of the new international trade framework does not mean giving up all the benefits associated with decades of special trade and financial relationships with ACP countries. According to the dominant view, Europe has invested too much in these countries to let others undermine the close relationships that have been nurtured over decades.
The other objective assigned to the EPAs is to make the economic partnership more 'efficient'. The concern with efficiency stems from what Europe perceives as a 'poor' performance of the Lomé Convention. The EU's own studies, corroborated by several other studies, indicate that ACP countries’ share in the EU market has consistently shrunk over the years to the benefit of other developing countries in Asia and Latin America. The reasons for this 'poor' performance are both internal and external to ACP countries. The internal constraints are weak supply conditions, a limited awareness of Lomé preferences, the lack of well-functioning trade channels, and so forth. Among the external constraints are the stringent rules of origin imposed by the EU, which require an added value of between 50% and 60% of ACP exports to Europe, and complicated and cumbersome trade procedures. To these constraints, one may add numerous non-tariff barriers, such as sanitary and phytosanitary measures and transportation costs that are a real handicap for small or medium-sized exporters, particularly those in landlocked countries.
In addition, the Lomé mechanism has not helped export diversification in African countries, but contributed to reinforcing their trade dependence on the European Union, which is estimated at more than 45%. In the light of this, the European Union tends to draw the conclusion that trade preferences granted to ACP countries have been a waste and have had little impact on the development of ACP countries.
But despite their emphasis on trade liberalisation and reciprocity, the EU insists that the EPAs will promote 'integration' and stimulate 'economic development' on the continent. For this to be the case there would need to be a fundamental reorientation of the EPAs, to transform them into a development-enhancing scheme, as spelt out below.
Non-reciprocity in trade liberalisation
Article 53-1 of the Cotonou Agreement stipulates that: 'Economic and trade co-operation shall be based on a true, strengthened and strategic partnership.'
If that is really the case and if the EU is sincere in adhering to these principles, then, it should accept that the huge asymmetry that exists between the two economies should prevent the establishment of a free trade zone between African and European countries. In other words, the EU should give up its intention to impose reciprocity in trade relations. It is said that the EPAs seek to go beyond what is allowed under the WTO rules, such as special and differential treatment as well as non-reciprocity which have been integrated into the WTO since the Punta del Este Declaration. Even the Commission for Africa, established by the British Prime Minister, Tony Blair, has challenged the free trade stance of the EPAs, to such an extent that it seems to have alarmed Peter Mandelson, the EU trade commissioner.
Indeed, given the asymmetry between African and European economies and the huge subsidies the latter enjoy, any reciprocity in trade liberalisation, as implied by the economic partnership agreements, would deal a major blow to Africa’s development prospects. It would mean not only more unemployment and poverty on a larger scale, but worst of all, the total collapse of the agricultural sector in sub-Saharan Africa, which in turn would aggravate the food crisis on the continent. It is widely acknowledged that trade liberalisation has already entailed huge losses to African countries. It has been estimated that the combination of deteriorating terms of trade and the trade restrictions introduced by developed countries has led to an average annual loss of $60 billion for Africa, about four times the amount of development 'assistance' to the continent. Admittedly, sub-Saharan Africa has suffered disproportionately from trade losses over the last 25 years. In particular, the costly protectionist European agricultural policies are undermining the objective of 'poverty reduction' in sub-Saharan Africa, one of the other objectives that the EU claims to pursue in Africa.
Findings reported by the United Nations Conference on Trade and Development (UNCTAD 2004) confirm that trade liberalisation has aggravated the economic and social conditions of the least developed countries, most of which (34) are in Africa. These findings are consistent with the analysis made in 1997 by the United Nations Development Programme (UNDP), which made the following observation, based on a number of case studies around the world:
In the real world, distinct from the imaginary world of free-trade proponents, the survival in agricultural product markets depends less on the policy of comparative advantage than on the comparative access to subsidies. To liberalize local food markets in the face of such an unequal competition is not a policy aimed at improving efficiency, but a recipe for the destruction of livelihood on a large scale. (UNDP 1997: 86)
This observation and those by other UN agencies must convince the EU that reciprocity in trade liberalisation with Africa would be a recipe for disaster. Indeed, agricultural policies left to the free play of market forces, combined with the continued subsidising of developed countries’ high-cost production, have led to the collapse of commodity prices in world markets and contributed to a low level of investments in productive capacity in Africa. Therefore, unless European agricultural policies are dismantled or substantially reformed, to take into account the interests of African countries, the latter must insist that agriculture be kept outside of any negotiations with the EU, while they reserve the right to protect key sectors of their domestic economies. Thus, it can be argued that reciprocity in granting trade preferences should not be based on a theoretical timetable proposed or decided on by the EU. Rather, it should be linked to tangible achievements by African economies in being able to sustain competition from European products.
No to TRIPS
If the EU is really committed to promoting 'a true
partnership' and establishing 'a strategic partnership' with Africa, it should help African countries take full advantage of all the WTO provisions that allow them to protect their economies under certain conditions. The EU should not be forcing them to forgo those provisions, or to go beyond what is allowed under the WTO framework. The compliance with some of the WTO key provisions would represent a major threat to African economies. For instance, the continent’s industrial policy would be particularly hurt if African countries were forced to comply with some of the most basic WTO provisions such as the trade-related intellectual property rights (TRIPS). The following paragraph in the Cotonou Agreement clearly indicates the EU's determination to force ACP countries to abide by these provisions:
Without prejudice to the positions of the Parties in multilateral negotiations, the Parties recognise the need to ensure an adequate and effective level of protection of intellectual, industrial and commercial property rights, and other rights covered by TRIPS.
(EU 2000: 40, Article 46-1).
If there are not profound modifications to these provisions, complying with TRIPS would compel African countries to enact laws designed to protect the intellectual property rights of European multinationals for 20 years, even for essential drugs. In effect, these provisions protect intellectual property through patent arrangements that exclude third party use, offering for sale, selling or importing of such products for a minimum of 20 years. This would make it impossible to produce generic copies for at least 20 years. This policy would strengthen developed countries’ technological monopoly and deprive African countries of the opportunity to catch up through adapting technology and producing generic copies of drugs, which was possible before the WTO provisions entered into force in 1995.
Even worse, African countries would be required to enact laws to protect patented products, including those owned by companies in the EU that patent plants and products found in developing countries. In other words, Western multinational corporations operating from the EU can freely patent products found in African countries and get protection from these countries’ governments! This is unacceptable. Thus, development-oriented EPAs should support the call for a comprehensive review of some WTO provisions that are detrimental to developing countries and for an extension of the transition period for these countries. In particular, the EU should support African countries in calling for a profound transformation of TRIPS to limit the threat to Africa’s industrialisation, technological progress and food sovereignty.
Indeed, these provisions have been called into question by developing countries and even by some institutions within the United Nations system. For instance, UNCTAD has made some recommendations to that effect. One recommendation is for a comprehensive reassessment of the links between property rights and development. Another is to extend the transition period to allow more time for developing countries’ industries to adapt. The third recommendation is to allow developing countries to use compulsory licensing to ensure technology transfer and meet public health concerns. These recommendations apply more specifically to African countries, given their extreme economic vulnerability. Therefore, the EU should take into consideration those recommendations and change its view of the EPAs, not as a trade-enhancing tool, but as a development-oriented instrument.
Taking into account the real costs of the EPAs
The EU tends to minimise the costs of the EPAs to African economies even if it says that it has put in place mechanisms aimed at compensating for the transition costs incurred by African countries. However, the real costs of that transition cannot be estimated. First of all, a free trade zone means full reciprocity when it comes to granting trade preferences, which means a complete removal of all quantitative and tariff barriers between African and European countries. In other words, African industries would be exposed to competition from European products. One important implication is that infant African industries would be deprived of the minimum protection they need, which would result in the collapse of many national industries that would not be able to sustain competition with European companies. This would have dire consequences in terms of lost income, higher unemployment and an increase in the level of poverty.
On the other hand, the removal of tariff barriers would entail heavy financial losses for the state as a result of lower revenues from import duties. Since in many African countries’ more than 20% of their budget revenues depend on import duties and more than 50% on primary export revenues, those countries would lose up to 50% of their revenues, because a free trade agreement with the EU would abolish or drastically bring down tariffs on European imports. All this would lead to a further sacrifice of the social sector, because financial compensation from the EU is not likely to match the magnitude of the losses incurred by these states.
In addition, a free trade agreement implies not only a free flow of goods and services, but also a free flow of capital, which means that European multinationals would have a legal basis for freely investing and selling in many African countries. The economic partnership agreement would give fiscal privileges to European investors and protect their investments. The free movement of capital would result in a free and unlimited repatriation of profits. The free flow of capital could aggravate capital flight from Africa and foster short-term capital movements that would be harmful to Africa’s development, as the East Asian case demonstrated a few years ago. All this would exacerbate the financial problems experienced by African countries.
To limit these losses and help African countries overcome some of the most intractable obstacles to development, any development-oriented economic partnership agreement must be linked to unconditional debt cancellation for all African countries, to a rise in official development assistance (ODA) and to the repatriation of stolen wealth. In addition, the EU could provide incentives to stimulate foreign direct investments (FDIs) that are compatible with African countries’ development needs and priorities.
Keep the Singapore issues out of the EPAs
In connection with the above, the Singapore issues must be kept out of the EPAs. These issues include competition policy, government procurement, investment policy and trade facilitation. They had been one of the principal subjects of contention in Cancun, when African and other developing countries rejected discussion of these issues within the WTO framework, leading to the collapse of the meeting. The EU is trying to use the EPAs to force these issues on African countries. This would deal an even greater blow to the continent’s development prospects. Joseph Stiglitz (2004) has stated that acceptance of these issues by developing countries would certainly 'stop the process of development'. Even the British government has asked for the issues to be removed from the negotiations unless the ACP countries feel ready to discuss them.
Accordingly, EPAs that envisage making a contribution to Africa’s development must remove the Singapore issues from the negotiations until general consensus is reached among African and other developing countries. Indeed, the inclusion of the Singapore issues would compel African countries to comply with trade-related investment measures (TRIMS), which would deal another big blow to a regional industrial policy, since it would mean granting 'national treatment' status to European investors and allowing them to invest in any area of their choice. Worst of all, it would mean adapting African economic and social policies to the needs of these investors, since they would be allowed to sue host countries for any losses they might suffer as a result of domestic economic and social polices. These provisions are similar to those embodied in the failed Multilateral Agreement on Investment (MAI), which was strongly opposed by African and other developing countries. For individual African countries, as well as for the continent as a whole, this would spell the end of any chance of industrialisation for the foreseeable future. Indeed, the provisions for support and protection of investments, contained in the current post-Lomé IV Agreement, are far more extensive and stringent than those found in previous Lomé Conventions. An illustration is given by Article 78-3 of the agreement, which indicates:
The Parties also agree to introduce, within the economic partnership agreements, and while respecting the respective competencies of the Community and its Member States, general principles on protection and promotion of investments, which will endorse the best results agreed in the competent international fora or bilaterally. (EU 2000: 61)
According to critics, these 'general principles' do not contain any mechanisms to ensure investors’ responsibility for their labour force or the host country’s national development. Nor do they include mechanisms that ensure a clear relationship between investments, poverty reduction and sustainable development. Worst of all, these provisions have no mechanisms for allowing ACP countries to control the flow of portfolio capital, which is the most speculative part of foreign capital for developing countries. It is precisely the absence of such mechanisms that led to the Asian financial crisis in the late 1990s, with its devastating economic and social consequences.
Without such mechanisms, the free flow of capital that would accompany a free trade agreement with the EU would devastate African economies as a result of speculative short-term investments. A development-oriented partnership agreement must therefore aim at promoting long-term and stable investments in productive sectors, in infrastructure, in telecommunications and human resources development. It must also recognise African countries’ right to restore capital controls and set performance criteria for foreign investors in terms of technology transfer, job creation, etc, to meet the objectives of their economic and social development.
Provide genuine support for economic integration
A development-oriented partnership agreement should encourage real economic integration, at both regional and continental levels. This means that it should avoid imposing different trade arrangements within regional economic communities (RECs). But such a risk is associated with the current EPAs, which are dividing African countries into LDCs and non-LDCs. By offering some undefined 'preferences' to LDCs, the EU knows that selfish and narrow 'national' interests may override regional solidarity and compliance with the Abuja Treaty and Africa’s interests as a whole. Therefore, some countries may be tempted to sign separate agreements with the EU for short-term gains at the expense of the long-term interests of their regions or the continent.
Another risk of split lies in the possibility that European countries may attempt to establish closer relationships with some more 'developed' countries, such as South Africa, Nigeria and others, the so-called 'emerging markets', at the expense of the other countries, while nominally encouraging the process of integration. Indeed, by giving a free ride to market forces, the EU may seek to develop closer economic ties with countries presenting better opportunities for its industries and investors. This would lead to a two-level economic partnership and expose African countries to great risks of implosion, if they were to opt for different trading arrangements as proposed by the EU.
But the adoption of two or more trade regimes in the same regional bloc would violate the provisions of the Abuja Treaty, since the African Economic Community (AEC) is a supranational community. This would be even more incomprehensible for countries which already have a common external tariff for third countries. In addition, if there were several trade regimes, it would be almost impossible to control the flows of goods and services between countries of the region, a fact which was underlined by the EU's own study. Thus, African countries must insist that any economic partnership agreement with Europe must be compatible with the provisions of the Abuja Treaty, since it requires the regional economic communities to:
make [their policies] compatible with those of continental integration and align their statutory instruments such as their Treaties and Protocols to the provisions of the Abuja Treaty establishing the African Economic Community. (AEC, 1997).
From this perspective, any economic partnership agreement must contribute to strengthening the region’s economic integration and accelerating the process toward building the African Economic Community. Therefore, if the EU is committed to promoting and strengthening regional integration, it should clearly demonstrate its willingness to invest in African countries’ productive sectors, in infrastructures, in human resource development, in promoting cross-border investments in order to improve supply conditions and strengthen the continent’s production base. To demonstrate this commitment, the EU should allow African countries to complete their integration process before engaging them in any discussions about any kind of economic partnership agreement. It was indicated that the SADC, which is the most advanced example of integration in sub-Saharan Africa, would complete its integration only by 2010 or 2012. Therefore, a genuine commitment to African integration should allow this process to run its full course.
Conclusion
Most observers argue that if the proposed economic partnership agreements between the EU and African countries remained in their original form and if they were implemented they would represent a fatal blow not only to Africa’s economic integration but also to its development prospects for the foreseeable future. These agreements risk dealing a fatal blow to the production model of integration adopted by the Abuja Treaty (1991), which was a major departure from the previous models followed by African countries. Several critics have argued that integration in sub-Saharan Africa cannot be conceived of as a trade-enhancing instrument, but as a development tool, that is, as a comprehensive approach to the continent’s complex economic and social problems. From that perspective, its first and foremost priority should be to develop a strong production base in order to meet the continent’s basic needs in food production, in industrial products, in technology, in employment, in human resource development, etc. This conception is embodied in the Abuja Treaty, which laid the foundations for the AEC. Since the signing of this treaty, all African economic communities have adopted the production model.
It is clear from this analysis that a free trade agreement with an African regional grouping – which would not be compatible with the treaty – would only serve the EU's interests at the expense of the continent’s drive toward building the AEC. Development-oriented EPAs must be compatible with the priorities defined by the integration process in Africa. For instance, any free trade agreement with the EU must be compatible with African countries’ own trade liberalisation scheme, while keeping sensitive areas vital to their economies out of the negotiations.
But Europe has little interest in strengthening Africa’s productive capacity. On the contrary, its fundamental aim is to perpetuate the current trading relations with African countries, whereby Africa remains a market for its products and a source of cheap commodities and labour. One could argue that the proposed EPAs are a response to the US-sponsored Africa Growth and Opportunity Act (AGOA). The EPAs and AGOA would in all likelihood transform Africa into an arena of confrontation between Western multinationals, which have been taking over assets in strategic sectors in Africa as a result of the liberalisation and privatisation imposed on African countries by the IMF and the World Bank. In reality, neither the EPAs nor AGOA would bring 'development' to Africa. Quite the contrary, both seek to take control of the continent’s resources and undermine its drive toward autonomous economic and social development. AGOA violates Africa’s sovereignty and overlooks Africa’s priorities. In short, AGOA aims to 'integrate' Africa into the world economy on 'America’s terms' (South Centre, 1999). So will the proposed economic partnership agreements. But Africa’s 'integration' into the world economy must be on its own terms, and not on America’s or Europe’s.
* Demba Moussa Dembele is Director of the African Forum on Alternatives
Dakar (Senegal)
* Please send comments to editor@pambazuka.org
REFERENCES
African Economic Community (AEC) (1997) 'The main conclusions and decisions of the first summit of the African Economic Community', AEC Newsletter 1 (4)
European Union (EU) (2000), The Cotonou Agreement between the African, Caribbean and Pacific States and the European Community and its Member States. Brussels: European Union
South Centre (1999) Lopsided Rules of North-South Engagement: The African Growth and Opportunity Act. Geneva: South Centre
Stiglitz, Joseph E. (2004) An Agenda for the Development Round of Trade Negotiations in the Aftermath of Cancun. London: Commonwealth Secretariat
United Nations Conference on Trade and Development (UNCTAD) (2004) The Least Developed Countries Report 2004. New York and Geneva: United Nations
United Nations Development Programme (UNDP) (1997) The Human Development Report. New York: Oxford University Press
Negotiating a fair deal: Are trade agreements with the EU beneficial to women?
2005-07-21
Karin Ulmer
Gender issues are conspicuous by their absence from the 'hard' areas of EPA negotiations, such as trade and regional cooperation. In order to estimate the likely impact of future trade agreements on poor women and men, a more systematic approach to trade policy negotiations and to capacity building in ACP countries is required, writes Karin Ulmer.
The Cotonou Partnership Agreement differs significantly from the Lomé Convention, which it succeeded. Although it still contains a commitment to reducing and eliminating poverty, there is a stronger emphasis on integrating the African, Caribbean, and Pacific (ACP) states into the global economy. The economic partnership agreements (EPAs) are designed to speed up this process by reducing or ending preferential treatment of ACP exports to the European Union (EU), and between ACP countries themselves.
The second key aspect of the Cotonou Partnership Agreement is that civil society is to be informed and consulted about decisions on aid, and the economic, social, and institutional reforms that the EU intends to support. It is in this area that APRODEV and other non-state actors can play a vital role in helping to shape policy.
APRODEV’s Zimbabwe case study (Mugabe, Okore and Ulmer 2002) identified the likely effects of EPAs and argued for capacity building of women's organisations and civil society groups more generally, to ensure them a voice in trade policy making. Given the political events in Zimbabwe, advocacy positions since the research have not been further formulated. However, a number of aspects of the Zimbabwe case study are relevant to women in other ACP countries, as well as to policy makers and trade negotiators. The findings of the APRODEV study have also been used to provide input into the EU's sustainability impact assessments and have provided background information for discussions on EPAs and women in West Africa.
What's new about economic partnership agreements?
The current EPA negotiations are not simply about future conditions of access to the EU market, but about extending exclusive trade preferences to the EU. Even though ACP countries have agreed to engage in these talks, they remain uncertain about how far EPAs will benefit their economic transformation, or affect their competitiveness once free trade arrangements are in place. There is some suspicion about how 'free' the trade arrangements will be, given the distorting effects of agricultural subsidies under the EU's Common Agricultural Policy (CAP). There is also a widespread fear that rejection of the EU's proposals may mean that they risk losing all or part of their aid allocations. The EU wants EPA negotiations to go beyond tariffs and trade, to include a wide range of trade-related issues such as tourism, financial services, telecommunications, competition policy, intellectual property rights, labour standards, and consumer policy. The European Commission has explicitly said that it wants discussions to go beyond existing WTO commitments. But virtually all ACP governments lack the capacity to take up this negotiating challenge.
From a one-way to a two-way street
The European Commission strongly favours a radical transformation of ACP–EU trade relations, from a system of non-reciprocal to reciprocal trade preferences. This means that the EU will have preferential access to ACP markets, while goods from ACP countries have preferential access to EU markets. The Commission favours this shift because it wants to ensure that future ACP–EU trade relations are compatible with WTO standards. It claims that under the previous arrangements ACP countries have failed to deliver better industrial or trade outcomes, or to achieve development objectives. It is not entirely accurate, however, to claim that the ACP countries' development objectives were not addressed under preferential arrangements with the EU. For example, between 1980 and 1997, prior to the current economic crisis, Zimbabwe was one of the most successful ACP countries in taking advantage of improved access to the EU market. From 1992 to 1996, Zimbabwean agricultural and horticultural exports rose by 35%. In 1998 the sugar sector alone saw an estimated income transfer to Zimbabwe of more than 18 million, an amount greater than the annual aid allocation to Zimbabwe under the Lomé Convention (Netherlands Economic Institute Study 2000).
APRODEV has raised concerns over the ability of the new EPAs to contribute to the eradication of poverty. They could instead result in free trade which benefits the EU, but produces very few long-term advantages for the ACP countries. These countries start from a low base: an unhealthy and poorly trained workforce, inadequate transport infrastructure, and weak institutional and policy frameworks. They are vulnerable to agreements with the developed world which are not in the longer-term interest of their people, especially women, who are the backbone of agricultural production. It is vital that existing sub-regional initiatives in Africa continue to be the basis for economic development. As it is not a 'level playing field', ACP states need to develop tough negotiating strategies, and to cooperate much more closely with one another.
Under the Southern African Development Community (SADC) agreement, for example, Zimbabwean food producers have free access to the large South African market. It will be difficult for Zimbabwean food exporters to compete with EU products once the EU also has free access to the Southern African markets in 2010, as stipulated in the EU–South Africa Trade Agreement. This is a strong incentive for Zimbabwe's food-processing industry to become competitive with the EU over the next few years. However, it remains to be seen whether or not this can be achieved.
What's in it for women? The case of Zimbabwe
If official negotiators on both the EU and ACP sides focus only on the macro-economic and political implications of trade, they could fail to address the implications for different social and economic groups. As has happened in the past, the burden of EPA reforms could fall heavily on women. In Zimbabwe, the 1990s Economic and Structural Adjustment Programme (ESAP) resulted in some negative trends for women. Women's employment in the formal sector declined by 9.5% in the first year, and only 6% of jobs created under employment schemes went to women, with only 11% of loans going to small and medium-sized enterprises (SMEs) (ZWRCN 1998). SMEs have proved to be an important area for the economic and social empowerment of women worldwide, but greater liberalisation under EPAs may reduce their capacity to compete with foreign goods and services. Women are seriously disadvantaged by restricted access to productive resources and gaps in training and technology transfer.
In Zimbabwe, most households are headed by women, and 74% of these are poor, whereas 54% of households headed by men are regarded as poor (Ministry of Public Service 1995). Eighty per cent of the rural population depends on agriculture, and women farmers are doubly disadvantaged. Women are allocated the worst and smallest pieces of land, and only 11.8% of all land is controlled by women. Women access only 19.8% of available oxen and 23.3% of available credit to purchase seeds and fertilisers (ZWRCN 1994). In general, past experiences of ACP–EU co-operation show that gender inequality has not been addressed. A 1997 review of 24 EU-funded development projects in ACP countries found that 21 in no way addressed gender inequalities (European Commission 1997). A 2002 Review of EU Country Strategy Papers and aid allocations concluded that gender mainstreaming was hardly taken up in country analysis or strategies in vital sectors such as transport, food security, and rural development (European Commission 2002).
The example of value-added food processing
In Zimbabwe, agriculture is not only essential to individual survival but also the backbone of the economy. It provides 45% of the country's exports, 60% of all raw materials used by its industry, and employment for 70% of the population. Seventy-one per cent of the total female population gains employment from the farming of communal areas. Women comprise 70% of smallholder grain farmers, and maize is an important source of household cash income for them, as well as being a basic crop for household food security (Central Statistical Office 2001).
The 'value-added' food industry in Zimbabwe is an important part of the industrial sector and an important market for locally produced agricultural products. A wide range of food products is produced, including breakfast cereals, biscuits, milk and sugar-based products, canned fruit and vegetables, and a wide variety of processed meat products. These industries absorb a significant proportion of the locally produced agricultural products from both communal and commercial farmers. Communal farmers (largely women) supply the local food-processing industry with maize, cotton, peanuts, sunflowers, and paprika, while commercial farmers supply sugar, soya beans, wheat, and pigs.
The EU's Common Agricultural Policy reform in the cereal sector has reduced EU cereal prices by 45–50% since 1992. It has also led to an 18% expansion of EU cereals production and cereal-based exports from 1991 to 2000 (European Commission 1992–2000). The CAP reform process will affect the market conditions facing ACP producers of competing products, and this in turn will affect their incomes at different stages of agricultural production, processing, and marketing. The impact is likely to be felt most heavily by women. Any trade arrangements which allow the import of cheap subsidised maize or other cereal at prices which undermine local prices are likely to depress rural household incomes. Free trade in maize, cereals, and related products needs to be carefully structured to maximise income opportunities for women in rural areas. Cereals and cereal-based products would need to be subject to special trading arrangements, safeguard mechanisms and special protocols, as with the SADC Free Trade Area. Free trade with the EU is hugely distorted by subsidies to EU farmers. In the case of Zimbabwe, as with other ACP countries, there is a real danger that the deals on offer will damage regional food-processing industries, and women will bear a disproportionate cost.
Ethical trade makes sound commercial sense
The Zimbabwe case study also looked at the expansion of the cut flower sector under current preferential access to EU markets. In this sector, 83% of the permanent workforce and 90% of the seasonal workforce are female (Okore 2001). These women have been the principal beneficiaries of improvements to wages and working conditions resulting from preferential market access to the EU. Cut-flower producers and exporters got together to ensure compliance with quality standards and created a body to uphold the principles of the Agricultural Ethics Assurance Association of Zimbabwe, which covers about 31% of the workers of this sector. This ethical trade initiative has supported improved labour conditions for women working on farms. With premium prices being paid in the EU for 'ethically produced' flowers, the growers have found improved labour conditions beneficial to production efficiency and financial returns. This case demonstrates that fairer labour practices have the potential to bring social and economic gains at the household level, while making sound commercial sense. The research found that any loss of preferential access to the EU market in the cut-flowers sector would adversely affect women. Future trade arrangements should secure and maintain favourable conditions of access to the EU market.
Threat to new regional export opportunities
Under the current SADC protocol, Zimbabwe's sugar industry can exploit the protected and high-priced refined sugar market, with positive spin-offs in terms of female employment. Women are predominantly employed in the packing operations for refined sugar. Zimbabwe is potentially a competitive exporter to the Eastern and Southern African (ESA) market for value-added sugar products. Should free trade with the EU be introduced in the sugar sector, this could pose a real threat to the expansion of Zimbabwe's refined sugar exports to the Southern and Eastern African region. Under current CAP reform, European producers in these sectors receive direct aid, which results in lower prices for their sugar and beef. European agro-business and exporters will be most likely to benefit from low prices and increased exports to ACP markets. In the face of this competition, Z