EPAs Remain Roadmap for Africa’s Development - EU
Public Agenda (Accra)
February 13, 2006
By Jonathan Adabre
The European Union is still insisting that the Economic Partnership Agreements (EPAs) whose implementation it is currently negotiating with four sub-regional groupings in Sub-Saharan Africa remain the only option for Africa’s development.
The EU insists that for Africa to move from its current share of global trade of 2% to 8% in the next ten years, Africa has to be fully integrated into the global trading system and that it is only when the regional groupings accept to implement the EPAs that this could be possible.
Ambassador Filiberto Ceriani Sebregondi, the European commission’s ambassador to Ghana who echoed the EU’s position was answering questions from Journalists during a press conference in Accra last Friday.
Under the EPAs, the EU is asking African countries to further open up their markets by reducing tariffs on agricultural and non-agricultural exports from developed countries. It is also asking African countries to do away with non-tariff trade barriers, such as import quotas, trade bans, agricultural subsidies and domestic agricultural support, i.e. guarantee prices to farmers. The EU sees these measures as trade distorting and therefore is pushing through the EPAs, that Africa agrees to them as ’don’ts’ to trade in exchange for markets in the developed world.
But the EU’s insistence comes at a time when there is overwhelming agreement among African states Civil Society groups that the implementation of the Economic Partnership Agreements (EPAs) in their current form would be detrimental to Africa’s development.
African Civil Society groups and trade justice campaigners insist that for Africa to benefit from global trading, it must have built the necessary competitive capacity to compete fairly with the developed nations, which the EU agrees Africa currently does not posses.
The African trade justice campaigners are also convinced that when countries apply trade liberalization before they build strong economies and institutions, de-industrialization is set to follow.
They also cite the Blair’s Commission on Africa’s Report, which agrees that for Africa’s development, trade liberalization should be non-reciprocal. In other words, the report alludes to the fact that there is need for the developed world to open their markets for Africa’s exports, but must allow African countries the policy space to protect their infant industries, until such a time when they have the capacity to compete. However, the EPAs are to do the opposite-liberalization before capacity building.
The question the activists are asking the EU is that ’if the EPAs collapse African manufacturing industries and discourage capacity development for processing and manufacturing how else would the EPAs support Africa’s development as it claims?
The Activists are arguing that the EU’s resort to the EPAs negotiations is to undermine the position of the developing world at the WTO trade talks.
They note that though the EU has repeatedly asserted its commitment to the multilateral trading system, stressing the WTO as the principal forum for negotiating in terms of economic relations with trading partners, the EPAs will do exactly the opposite.
They are also concerned about huge fiscal revenue loses, which the developing world would suffer should they implement the EPAs.
Many developing countries depend upon import duties for as much as one third of their national revenue. Studies have however predicted that the EPAs would cause major declines in government income through lost tariffs revenue. Cape Verde and The Gambia for example, stand to lose 19.8% and 21.9% of their national incomes respectively; and Ghana and Senegal about 10% and 11% should they implement the EPAs. Kenya too is set to lose 12% of her fiscal revenues should she accepts the EPAs.
The activists do not also agree with the EU’s point that the EPAs will foster regional integration. They do recognize that indeed, given the small size of most African economies and their over dependence on a few primary commodities, regional integration among groupings of developing countries would definitely offer them mutually beneficial development gains. Such trade arrangements can promote the pooling of resources, expanded markets, increased intra-regional trade and investment and greater diversification and value addition.
In turn, they can reduce dependency on a small number of Northern markets and diminish vulnerability to a downturn in those markets. Moreover, in the longer term such regional projects could place countries in a stronger position to trade in higher value-added products on a more even playing field with major trading partners like the EU.