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Demerits of the EU trade agreements

Business Daily (Nairobi) | 18 December 2007

Demerits of the EU Trade Agreements

By James Thuo Gathii

The European Union (EU) has finally negotiated interim Economic Partnership Agreements (EPAs) with the East African Region. The EU used a variety of unsavoury negotiating tactics to get these interim agreements to the signing stage.

For example, it without notice withdrew the sugar protocol on which sugar growing countries in some EPA regions rely on for a significant share of their foreign exchange.

These and other bully tactics were intended to meet a December 31st 2007 deadline for the completion of negotiations of EPA’s. Kenya’s Trade Minister, Dr Mukhisa Kituyi, had to engage in tough bargaining to get concessions like the 25-year transition towards a completely liberalised trade market between ESA countries and the EU.

Under the interim EPA, the EU gets a whopping 80 per cent access to ESA markets over the next 25 years. The ESA countries, including Kenya, will not get much in return since the EU argues that its waiver of WTO rules to extend preferences at the end of this year necessarily requires ending these preferences.

These scare tactics seem to have worked since the EU has cobbled up these hurriedly written EPAs while ignoring the more extensively negotiated drafts over the last several months. While the EU is promising all sorts of development assistance in the interim ESA EPA, such hortatory commitments are unenforceable.

That is why on December 12 , 2007 Mandisi Mpahlwa, the South African Minister for Trade and Industry, said that the interim EPAs concluded with the EU so far raise serious issues.

I want to address one of those serious legal and constitutional issues for African, Caribbean and Pacific (ACP) countries that Mpahlwa may or may not have had in mind.

First, the Cotonou Agreement in establishing the negotiating mandate of EPAs did not confer the authority to negotiate the EPAs on regional groupings of ACP states. Thus through what amounts to no less than an informal arrangement between the EU and ACP states, regional groupings were authorised to negotiate treaty commitments on behalf of the states.

In other words, countries signing the EPAs did not themselves authorise negotiations to be regional. The Cotonou Agreement, which the ACP states signed, contemplated that individual States rather than the regions would be the ones entering into EPAs with the EU.

That is why Article 93 of the Cotonou Agreement leaves ratification up to the ’respective constitutional rules and procedures’ of the ACP States. In fact, I am not aware that the Kenyan Parliament delegated this authority to the ESA group and even if the Executive branch did so and argued it had the authority, this would be unprecedented.

These negotiations therefore greatly differ from the understanding that rights and obligations created by trade rules are bilateral - that is between two countries - rather than multilateral or between one country on the one hand, and all countries on the other.

Second, since the mandate to negotiate EPAs was not accompanied by domestic legal endorsements of this delegation of the authority to negotiate binding international legal commitments to regions, important questions arise when these treaties are presented to ACP governments for ratification.

I am sure the temptation will be to quickly ratify these treaties without a thought. That in my view would be a mistake. Unlike with the East African Community Treaty and other related treaties that involved widespread participation and involvement of a lot of stakeholders, the EPAs have from Kenya’s point of view been negotiated out of reach and control of our government.

Should our government therefore be bound by a treaty entered under such circumstances, especially given the underhanded manner in which the EU worked to have the interim EPAs signed?

Finally, and most important, since EPAs are likely to produce changes including revenue losses when its implementation begins, there ought to be widespread public involvement of their ratification in the respective legislative assemblies of the ACP states. Currently, it seems these EPAs have simply been signed on behalf of Kenya in Brussels.

The ESA EPA must be ratified by our government to attain binding legal status since a signature cannot afford such status to a treaty. While ratification has traditionally been restricted to the Executive Branch, wise policy in this case strongly counsels in favour of widespread public consultation.

Our Parliament and various constituents including farmers and others producers and consumers who will be affected by the EPA’s coming into force ought to have their voice heard prior to its ratification.

Such public consultations would provide information on what various constituencies say is the likely impact of EPAs on poverty reduction efforts as well as with internationally established standards of human rights protection of our citizens.

European states, no less, are going in the direction of subjecting such treaty commitments to public deliberation and there is no reason why we should not.

Such widespread involvement of these constituencies is reinforced by the fact that on the EU side, the EPAs have been negotiated without the involvement of the European Parliament and therefore there is a risk of exporting agreements bedevilled with what Europeans like to call a democratic deficit from the EU to ACP countries.

It is notable that even if the regions have had the authority or legal standing to negotiate EPAs on behalf of the various ACP states, there are areas with regard to which these countries cannot cede their authority or sovereignty to a regional body to negotiate commitments on, that would then have as must to be rubber-stamped by individual ACP States.

The best way to get the informed consent of these States is to have a ratification procedure that weighs the good, the bad and the ugly about the EPAs. Such transparency should be short-changed for expediency.

Safeguarding Kenya’s interests will require more than simply trusting the interim ESA EPA safeguards our best interests without a stakeholder debate about whether it does so or not. Rushing to ratify the ESA EPA would short-circuit important objective.

Gathii is the Governor George E. Pataki Professor of International Commercial Law, Albany Law School.