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EPA road-show rolls on

EPA Road-Show Rolls On

Fahamu (Oxford)
January 4, 2007

By Richard Kamidza

Negotiations between African countries and the European Union aimed at finalizing free trade deals known as Economic Partnership Agreements (EPAs) are continuing apace. As part of the process that will finalise EPA deals sometime in 2007, Eastern and Southern Africa countries have just submitted a draft EPA document to the EU. But, in this article, Richard Kamidza documents the astonishing lack of consultation in the negotiating process, claiming that in some cases even cabinet ministers don’t know the details. One of the sectors that could face the biggest battering is agriculture, already buckled by three decades of structural adjustment and rich country subsidies.

Southern Africa hosted several Economic Partnership Agreement (EPA) events between September and November 2006. Of these, the 7-8 September 2006 regional conference organized by the Trade and Development Studies Centre (Trade Centre) - whose theme was ’Southern African Development Community (SADC) and the Eastern and Southern Africa (ESA) experiences in negotiating the EPAs with the European Union (EU)’ - is my point of reference. Senior officials of the ESA configuration, the EU delegation in Harare, policy makers and civil society organizations (CSOs) attended the event.

At that meeting, the ESA-EPA draft document, which was officially submitted to the EU with a response timeframe of end of September 2006, was circulated to participants. An excited Dr Moses Tekere, ESA-EPA Advisor, remarked: "It is a wise strategy meant to outwit our counterparts in the EU...The ball is now in the EU’s court, and a timed response is likely to work in favour of the ’happy family ESA’..."

However, this mirrors a competitive race of African configurations of wanting to be the first to reach out to the EU’s negotiating machinery in spite of limited capacity, timeframes and space to assess outcomes in light of emerging national and regional economic units and the aspirations of consumers.

But, being the first to knock at the EU negotiating machinery’s doors not only fuels pessimism in the process, but also points to a bleak future for ESA economies under a legally binding trade regime. While the ESA-EPA advisor expresses triumph and optimism on the draft, the failure to widely consult at various stages of the process has a strong bearing on outcomes, especially with regards to consumers, smallholder farmers and other small to medium-producers.

ESA-EPA intellectual leadership [1] opted for ’text-based’ negotiations, hence compiled a comprehensive ’wish list’ document to form the basis for actual negotiations with the EU. Its main highlights include the scope of the agreement coverage: trade cooperation, trade related issues, trade in services, fisheries, economic and development cooperation, development finance cooperation, institutional framework and dispute settlement; and the schedule for eliminating customs duties a day after the agreement’s entry into force. These provisions aim to increase production, supply and trading capacities as well as enhance capacity to lure investment and technology.

The submission of the draft has fuelled fears of negative implications and outcomes likely to tie ESA economies to Europe in an unbalanced framework. This scenario perpetuates an unjust trade regime that has the potential to undermine national and regional economies, and in the process, compromise regional integration efforts.

Various meetings of the ESA processes and lobbying missions to the EU have continuously raised the need to redress supply-side constraints including unreliable public utilities (electricity and water); poor public infrastructure (run down roads, bridges and railways); weak institutional policy frameworks (fluctuating exchange rates, high inflation rates and poor fiscal measures); low labour productivity (arising from poor education, health and housing provisions); and an unfavourable investment climate coupled with inadequate resources to foster socio-economic transformation. In addition, countries have weak production structures and/or capacities.

While the above requires huge resources in order to improve the situation, many countries do not have the capacity to mobilise such resources both externally and internally due to a poor investment climate and low gross national savings (GNS) ratios, respectively. In addition, many countries have been experiencing dripping developmental assistance inflows.l

In this respect, the ESA-EPA draft text says "...every 5 years the ESA-EU EPA Council shall undertake a formal and comprehensive review to ascertain if the development benchmarks have been attained by individual ESA countries as well as determine whether EU’s trade and development policies and assistance have contributed to individual ESA countries achieving the development benchmarks." This vindicates the prevailing fear that outcomes may fail to assist in the development of respective countries and that development may be overlooked, and in the process remain elusive to the future developmental trajectory of the respective ESA countries.

The ESA text was crafted against the backdrop of increasing pressure from the World Trade Organization (WTO) to open up their markets and let their farmers "compete" with the heavily subsidised food and other agricultural produce dumped into their economies by the EU and other industrialized economies. The same economies have been subjected to neo-liberal policies driven by the World Bank and the International Monetary Fund for over three decades, which forced African governments to dismantle public agricultural research and extension programmes and drop whatever protection and incentive mechanisms existed for their small farmers and other small-to-medium-size producers. In addition, the same African governments are then forced by the same agencies to devote their most fertile land to the growing of export commodities for markets in the North, thus pushing small farmers off their land and food production out of rural economies.

The concluded South Africa-EU Trade and Development Cooperation Agreement (TDCA) has impacted on the economies of the Southern African Customs Union (SACU) and other regional countries, especially on agricultural development, market competitiveness of both agricultural and non-agricultural products and policy space for future intervention in support of vulnerable sectors (such as rural farmers) and consumers.

To date TDCA exposes other regional economies (SACU and non-SACU countries) to the highly competitive EU environment which heavily subsidises its agricultural producers. It is therefore possible that products from EU end up flooding the markets of non-TDCA signatories due to porous boarders that are difficult to police, a development that leads to de-industrialisation (downsizing), de-agriculturalisation (forcing farmers off their agricultural activities), unemployment, underemployment and poverty.

EPAs are associated with huge adjustment costs relating to revenue losses. As the TDCA shows, Swaziland, Lesotho, Namibia and Botswana, which prior to the new trade regime were guaranteed 45, 42, 28 and 17 percent respectively of the total SACU imports are estimated to lose between R1.9 billion and R3.5 billion in revenue. This translates to falling fiscal expenditures necessary to support agricultural development, social service delivery, infrastructural development and livelihoods.

In the case of ESA, the rejected text acknowledges that agriculture supports a significant number of people (about 70% of the population) whose production is solely for household consumption with a minor role in commercial agricultural market. The text further lists areas that require assistance from the EU. What is instructive is the fact that EPAs are likely to flood ESA markets with subsidised agricultural products, a development that has future negative implications to the sector and the entire economy.

Many ESA citizens have memories of the negative implications of the neo-liberal policy project on their economies and subsequently to their livelihoods. Many economic units are now exposed to globally driven ’one-size-fits-all’ policy agendas in addition to EPA driven global market competition. While many stakeholders through various levels of interventions hope to contribute to the outcome, it seems that the ESA-EPA intellectual leadership is now immune to such crying voices in addition to being unwilling to reach out to many noble ideas through consultation.

Knowing very well that most ESA countries are largely dominated by agriculture and agricultural related activities, failure to involve constituencies in this sector display ESA-EPA intellectual leadership’s insensitivity to the plight of smallholder farmers, other producers of agricultural related products and consumers.

To date a significant number of the population live on one meal a day. Wide consultation and deep involvement of other stakeholders and citizens is in line with the spirit of the Cotonou Agreement. Consultation is not about making assumptions on other social and economic units, but rather about direct or indirect soliciting of their views. While the ESA-EPA leadership has not appreciated the above, it is sad that an opportunity that should have facilitated ESA stakeholders and citizens inputting to the process prior to the submission of the said draft is missed. ESA-EPA intellectual leadership has less confidence in wide consultations and deep involvement. They seem to only consult those with moderate views. So in the process, they leave out the views of broader constituencies. Given this critical moment, it is thus imperative to consult even radical views, including those calling for a stop to EPAs.

Since the launch of the ESA-EPA road map in Mauritius, February 2004, the intellectual leadership has not organized a single meeting with non-state actors’, particularly civil society, a separate platform that is necessary to broaden their horizon on issues of livelihoods and survival strategies of ordinary citizens. This is not a resource-constraint weakness, for on some occasions, configurations of officials have failed to avail themselves when resources were made available. This is equated to snubbing civic body meetings and processes meant to benefit the future trade regime between Africa and EU; and to lack of ’open door policy’ ready to embrace civic bodies’ voices - both moderate and radical, a platform that has been ably provided for by their EU counterparts.

In this respect, many campaign missions by civic bodies to the EU, have seen them directly engaging with the EU Commissioner, Director-General Trade, Director-General Development, EU Parliament and other influential institutions. However, a lot of inputs from these missions have failed to filter into the said draft because the ESA-EPA intellectual leadership has failed to open its doors for such voices, which are deemed radical. Lobbying powerful EPA institutions and structures in Europe require radical elements. One wonders why those in charge are not yet ready to accept and value such inputs.

Historical bilateral trends show EU emerging a ’winner’, a position likely to mirror the current EPA process. African configurations need to learn why this is always the outcome. While it is necessary to appreciate the prowess of EU in defining trade relationships with its former colonies, it is equally important to harness all available resources, particularly views of non-state actors which have not filtered through.

The ESA region can improve its negotiating capacities by harnessing all available human resources, including critical voices. Many stakeholders engaging EPAs have valuable inputs, which have the potential to add value to the outcomes. Coordination of all voices, especially of critical constituencies calls for an "open door policy" coupled with expressed intent to accommodate different views. Coordination is about accountability of outcomes; reaching out to broader constituencies; and building synergies and networks aimed at ensuring positive outcomes necessary to promote pro-poor development and address livelihood needs in ways that ameliorate widespread poverty. Coordination is about soliciting other views on emerging positions deemed not yet official.

While there have been appeals to popularize the draft, one wonders what are the appropriate messages and strategies to use, and which constituencies to target given that the fourth draft has been rejected by the EU and the ESA team has remained numb about it. Its rejection filters from European civil society networks. Why the draft was not shared with stakeholders boggles the minds of citizens, especially those likely to be affected by the outcomes.

The appeal to popularize the draft raises questions including: should we focus on the weakness of the document with the view to improve the final output or to lobby its acceptance in the EU negotiating machinery? Should we focus on the inherent intellectual weakness at the ESA leadership level that fails to widely consult broader constituencies before serving the ’menu’ on the EU’s table? Should we focus our energies on exposing those, who, all along have been seeking glory, that is, eager to append their signatures regardless of the flawed process and outcome? Should we focus our energies on intellectual ESA-EPA leadership, which is increasingly detaching itself from the reality on the ground?

The above not only raises serious challenges within all African configurations, but also points to deficiencies in synergy building, strategic alliance formations and policy driven strategies among various stakeholders aimed at concluding a just trade regime. Soliciting opinions of other stakeholders has remained elusive in the ESA-EPA intellectual leadership.

At the 21st Plenary Assembly of the SADC Parliamentary Forum, it emerged that the EPA processes have not been shared adequately with other organs of states in respective member-states despite the relevance of such institutions. Though MPs are important they are largely at the periphery of the process. From the discussions, it was clear that no sharing of countries’ positions was done. In fact, from the sentiments, most of them were not consulted and in many states EPAs are yet to be discussed at the Cabinet level. Indeed, some MPs in this Forum are Ministers who profess ignorance on the process. This development illustrates poor coordination of all organs of state, and non-state institutions in the process; and lack of intellectual supervision by those in charge with the view to ensure that all the voices are consulted.

• Richard Kamidza is a senior researcher at The African Centre for the Constructive Resolution of Disputes (ACCORD)

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