logo logo

EU begins to soften its position on EPA negotiations

Public Agenda, Ghana

EU begins to soften its position on EPA negotiations

By Jonathan Adabre

14 August 2006

In what could be described as a softening of its position on the Economic Partnership Agreements negotiations between EU and ECOWAS, the EU’s Ghana office says it is hopeful that the concerns of ECOWAS would be addressed “before” the implementation of the EPAs begin.

Before this subtle change of mind, the EU was pressing on 1st January, 2008 as the date on which the implementation of the EPAs should begin as agreed in Cotonou Agreement.

That date is still fixed though, but now that it says the concerns of ECOWAS should be addressed ‘before’ the implementation of the EPAs, it means that the date is not cast in iron and could be changed if need be.

The pronouncement also means that ECOWAS states will have adequate time to reexamine their development needs and develop a trade pact that would address these needs before completing the EPAs’ negotiations.

The EU Delegation made the observation when they met the press last Tuesday in Accra to outline the programme of the EU under the six month presidency of Finland. The EU has 25 Member States and is practicing a rotating presidency, with a change every six months.

From July to December 2006, Finland has the chair of the president of the Union but because it has no embassy in Ghana, it has conferred the presidency to the German Embassy. In attendance were the Germany Ambassador, Mr. Peter Linder, the Ambassadors of France, Netherlands, Spain, Italy and the British High Commissioner to Ghana.

“Through the works of Civil Society Organizations (CSOs), we do understand the development concerns of ECOWAS states and the negative effects the EPAs will have on their economies. But we are hoping that before the EPAs are fully implemented, these concerns would have been addressed. We are working to ensure the minimization of the losses and the maximization of the benefits”, says Guy Samzung, the head of cooperation of the European Commission in Ghana.

“These negotiations are at their beginnings, they are not at their end. By the nature of the negotiations, things are getting and will change at the end of the day,” Samsung alluded.

ECOWAS Trade Ministers and CSOs in Africa and the developing countries in general, have been arguing that judging from the weak nature of African economies and industries, coupled with the heavy handiness with which developed nations still employ agricultural subsidies, tariffs and other non tariffs measures to protect their markets, implementing the EPAs as they stand today, will foment deeper poverty and underdevelopment for African states.

And although the EU, the sponsoring party of the EPAs, had also agreed to reduce these trade barriers and eliminate agricultural subsidies, it has to date, not lived up to that promise. Even trade negotiations on the Doha development round at the World Trade Organization (WTO) recently came to a halt because the EU and the US did not agree on a timetable to eliminate agricultural tariffs.

The EU and the US are the two biggest providers of agricultural subsidies to their farmers in the world. The EU for instance, gives its agribusinesses around $100 billion a year in subsidies and grants. A cow gets $3 a day in subsides from the EU, while 50% of Africa’s people live less than $1 a day. The US government in 2002 alone, provided $3.7 billion in subsidies to its cotton agribusiness, three times the entire US aid budget for Africa at the time.

It has been established that the collapse of the agricultural sector, which employs over 70% of populations of most African states, is the result of the subsidies developed nations grant to their farmers and the fact that African nations are compelled by the International Finance Institutions (IFIs) such as the World Bank and the International Monetary Fund (IMF) to remove farm subsidies and open up their markets under the structural adjustment and the economic recovery programmes.

But while agreeing that ECOWAS states need time to build competitive positions to be able to compete with the outside world, the EU Delegation is insisting that Africa has got to be a “full member of the world economy and it cannot do so if it has to protect itself throughout its life.”

The question that comes to mind is, is Africa really a protected economy? According to the Coordinator of the Third World Network (TWN) of Africa, Dr. Yao Graham, Africa is already a fully integrated continent. He says that Africa, at the time of the launching of the Doha Round, was a an import dependent economy, a fundamental structural feature, aggravated by more than a decade of liberalization under IMF/World Bank policies.

He says for instance that by the end of 2001, the total value of Ghana international trade; import plus export, was equivalent to over 80% of its GDP.
Exports and imports were equivalent to around 32.6% and 47.6% respectively according a 2002 ISSER report on the Economy of Ghana.

“This is a very high level of external orientation of the economy and integration into the global economy, heavily imbalanced in favour of imports dominated by consumption items,” he articulates.

The bulk of exports are made up of unprocessed agricultural commodities-cocoa, fruit, horticultural products, fish, game and wildlife and extractive commodities-minerals and timber, which incidentally are subject to frequent price fluctuations.

Any attempt to process these into finish products, which could fetch better prices on the international market is often resisted by the developed world, using punitive tariffs.

In an apparent response to the concerns of CSOs and African governments that African nations stand to lose significant amounts of tariff revenues if they implement the EPAs, the delegation counted the EU’s Development Aid as a package in response to those concerns. It says the EU, by far is the largest aid donor in the world and that the EU will not relent in that regard to assisting Africa overcome the revenue problem upon the EPAs implementation.