| From Angola to Zimbabwe, Burundi to Rwanda, Benin to Togo and Cook Islands to Vanuatu all eyes are on Economic Partnership Agreements (EPAs). As accusations and counter accusations fly fast and furious on who is dragging their feet on EPAs it is too easy to forget the background that should inform all EPAs. Indeed there are worrying attempts whose interpretation of EPAs gives the impression that these partnership agreements should be understood in isolation. It is almost as if an artificial separation between EPAs and Cotonou is being created. In June 2000, the European Union (EU) and 77 countries in Africa, the Caribbean and the Pacific (ACP) signed a new cooperation agreement known as the Cotonou Agreement. This Agreement builds on 25 years of ACP-EU cooperation under four successive Lome Conventions. Under this agreement, non-reciprocal tariff preferences will be maintained until 31 December 2007 after which they will be replaced by reciprocal EPAs.
EPAs need to be understood within the context of Cotonou. For the avoidance of doubt, Article 1 of the Cotonou Agreement is very clear on the kind of partnership that is sought: “The partnership shall be centred on the objective of reducing and eventually eradicating poverty consistent with the objectives of sustainable development and the gradual integration of the ACP countries into the world economy.” Contrast this with EU Trade Commissioner Peter Mendelson’s address to the London School of Economics Society: “We have made it clear to our partners that the EU is only interested in deep free trade agreements across the full range of sectors … not just goods, but services, non-tariff barriers and rules on issues such as investment, competition and public procurement as well.” It is evident from this statement that the EU is really road-testing issues considered too sensitive for the World Trade Organisation. Attempts to bring these new issues in the Doha Round of the WTO were abandoned in 2003 after fierce resistance from the developing countries that argued then that the Doha Round could not be about anything other than development.
In April this year, the AU Conference of Trade Ministers in their Nairobi Declaration made the following points: “On the issues of investment policy, competition policy and government procurement, we re-iterate the concerns we have raised at the World Trade Organisation, leading to their being removed from the Doha Work Programme. We reaffirm that these issues be kept outside the ambit of Economic Partnership Agreements. We stress the importance of maintaining consistency in our negotiating objectives and positions in the various fora. We appeal to regional groupings, that in dealing with these issues, they ensure the coherence of our negotiating objectives and positions adopted in various fora. We specify that regional instruments can be developed for the sole mutual benefit of member states of regional groupings.”
Given this background, it is worrying that there is an understanding of EPAs which is gaining currency and seeks to stress that EPAs should be about more liberalization, investment and trade facilitation only. African countries’ expectations of development, eradication of poverty and gradual integration into the world economy somehow seem to get lost. Where they are mentioned it is done as an afterthought. When the issue of development is brought up, those who negotiate on behalf of the EU say “Sorry we can’t do anything about that, we have a mandate that we were given.” What is this mandate that they were given? A mandate to plunder Africa’s resources, wreak havoc in Africa’s agriculture and damage the environment and livelihoods? It is a reflection on the nature of the partnership that the EU is able to use steamroller tactics to push for the inclusion of the new issues in the EPAs. What partnership can possibly exist between a cat and a rat?
Article 2 of the Cotonou Agreement states explicitly that “The ACP States shall determine the development principles, strategies and models of their economies and societies in all sovereignty.” What is apparent in this statement is that any EPA must support existing national development strategies. As is explained in the EPAs and Investment article in this Bulletin “traditional-rules based agreements can limit ways in which a country manages foreign investment to fit its own development strategy while avoiding potential pitfalls.” ACP states therefore need to be accepting only those conditions that do not constrain policy space and national independence. The kind of space sought by EPAs will increase capital outflows from Africa than inflows.
The negotiations deadline has continued to hang like the sword of Damocles on the heads of ACP countries. The negotiations have to be completed by 31 December 2007. From 2008 to 2020, the implementation of trade liberalisation within the context of EPAs must begin. Currently there is a waiver in the WTO that gives preferential market access to ACP states to the EU markets. However this waiver will also be expiring at the end of 2007. Given the groundswell of discontent in ACP countries, chances that the negotiating deadline will be met are between slim and zero. Slim has gone out of town while zero is very much around. Given that understanding, it is only fair to call for an extension of the current waiver. Calls for a waiver are not far-fetched especially given that every single deadline of the WTO has been missed. In any case, when the 2007 waiver was given, it was largely against the assumption that the Doha Round would have been completed and this has not happened. Added to all this, Article 37.4 of the Cotonou agreement states that: “The parties will regularly review the progress of the preparations and negotiations and, will in 2006 carry out a formal and comprehensive review of the arrangements planned for all countries to ensure that no further time is needed for preparations or negotiations.” As the Barbados Minister of Foreign Affairs and Trade, Dame Miller says elsewhere in this Bulletin “comprehensive review” must be interpreted to mean that all issues are to be reviewed and the review should be formal, comprehensive and deal with both trade and development aspects.
The reason why ACP countries seek non-reciprocal arrangements is because of the asymmetries in world trade. If as stated in Article 1 of the Cotonou Agreement, the aim is to reduce poverty and promote sustainable development then it follows that negotiations should prioritise the development dimension of trade. It is Europe’s commitment to development that will make or break EPAs. Ultimately, trade must be subservient to development and not the other way round. Reciprocity is the language that ACP countries must talk only when asymmetries have been eradicated, otherwise the dream of equal relationships will remain just a dream. If we look at the countries in the EU we find that their own development trajectory was for decades based on protectionism. Now ACP countries are being called upon to open up everything carte blanche. This is no way to conduct a partnership.
* Percy Makombe is the deputy director of SEATINI. |
