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EU flexes its colonial muscles with divide and rule strategies to crush former colonies with unfair trade agreements

Black Britain | 11 october 2006

EU flexes its colonial muscles with divide and rule strategies to crush former colonies with unfair trade agreements

Representatives of ACP countries have been in the UK to lobby politicians to pressurise the government over its proposed new trade agreements. Black Britain spoke to them about how the agreements will destroy their economies and their lives.

Deborah Gabriel

New partnership agreement proposed by EU will bring unfair competition

The EU is keen to establish new trade agreements with 75 of its former colonies in Africa, the Caribbean and the Pacific (ACP). Since 1975 trade agreements between the EU and ACP were conducted through Lome conventions.

These conventions took account of the massive economic disparities between the EU and ACP and allowed preferential trade agreements to ACP which did not have to be reciprocated. This included allowing ACP to protect their vulnerable markets from competitive and highly subsidised EU exporters.

When the last Lome convention ended in 2000 it was replaced by the Cotonou agreement which was designed to reduce poverty and promote sustainable development, allowing gradual integration of ACP into a rapidly globalizing world economy.

But under pressure from the richest countries in the world, who want even more domination of the world’s economy, the Cotonou is on its way out, due to cease at the end of 2007, after which time a new Economic Partnership Agreement (EPA) will be in force.

But the new EPA is stacked against ACP because the EU is demanding that ACP countries open their markets to EU countries. In its briefing report on the EPA, Oxfam says: “The proposed EPA is simply nothing less than a fundamental restructuring of the political and economic relations between EU and ACP countries.”

A lot is at stake for ACP countries - nearly half of their exports go to Europe, yet according to Oxfam City firms in London pay out more in executive bonuses than Europe spends buying products from the whole of the ACP. The ACP includes 39 of the 50 least developed countries in the world. Even the largest group - West Africa is still 80 times smaller than the EU in terms of GDP, according to Oxfam.

Benito Elisai, of the Farmers Union of Malawi told Black Britain that although the EU wants ACP to liberalise its markets: “In Malawi we have other constraints that will not enable us to meet what we want to export to them.”

Under the EU negotiations, where the ACP traded as a bloc, the EU has divided the ACP into six groups for the negotiations, which is counter-productive to existing regional relationships being developed. Elisai explained that although the EU allege that even if they open their markets they can protect certain goods and charge tariffs, if Malawi negotiates with the EU on different products to its neighbours Tanzania and Mozambique, goods from Europe can still make their way from Mozambique through Tanzania and find their way to Malawi, because of poor border controls.

EU using divide and rule strategies with ACP

But Elisai told Black Britain: “To put stringent border controls in place will require a lot of resources which we do not have. This is why we are saying that EPAs are bringing in unfair competition. In Malawi, we are not afraid of competition, but what we are saying is let us have competition on a level playing field.”

Elisai was also very sceptical about the EU’s claim that opening their markets would attract foreign investment. He told Black Britain that this was highly unlikely because of infrastructural problems in Malawi:

“You need good electricity - we don’t have electricity. You need a good water supply - we don’t have that. People are still drinking water from wells, not running water. Who can come to invest in such a country? We don’t have good road networks, the telephone network is so poor - investors cannot come. We are saying to the EU why can’t we address these problems first?”

Elisai also argued that because of its superior technology, South Africa is more likely to attract foreign investors, especially as it is able to produce goods at lower prices, compared to the small and medium enterprises in Malawi. With both countries competing in the same market, Elisai said this spells doom for Malawi:

“What this means is that our small and medium enterprises will close down and in closing down it means creating unemployment. Unemployment causes social unrest - we are already experiencing these things because of the policies that the World Bank is implementing in our country. In Malawi we do not think that trade is the answer to our development needs.”

In Malawi previously most of the industries received funding from the government. But the World Bank insisted that privatisation would increase efficiency. So the Malawi government started selling public industries which were mainly bought by foreigners who cut the numbers of employees, resulting in large scale unemployment.

Elisai told Black Britain: “In Malawi we believe that development is not only trade. Trade is just part of it. But the EU are telling us to concentrate on trade whilst pushing all the other issues aside.”

Echoing Elisai’s sentiments, Veronica Griffith, Deputy General Secretary of the Barbados Workers Union said that she was concerned about the ability of ACP to compete under the EU’s proposed EPA because: “we lack the skills, the weak infrastructure, the weak private and public sector; the workers would have to be trained to be productive.”

Griffith told Black Britain that the consequence of the EPA would mean the loss of jobs: “That is where it is a problem for me within the trade union movement. If workers don’t have jobs then they can’t feed themselves and these agreements, rather than doing what they say - which is to reduce poverty, will in fact increase poverty,” she said.

Griffith also denounced the EU’s strategies as being damaging to regional relationships being established between ACP countries: “Before the EPA negotiations it was the ACP as a bloc and strength would be in that, but now you have six regions. To me that is like divide and rule and they aren’t really negotiating fairly. They are dictating to you what you should do.”

At a Brussels meeting, Griffith told Black Britain that EU ministers were telling ACP countries how they should set up customs unions and economic arrangements: “And we’re saying that arrangement would be in direct conflict with the Caribbean single market which we established in January this year.”

Griffith told Black Britain that in any partnership both sides should benefit in the relationship: “Not one speaking down to the other. That is our difficulty.”

Peter Ozo-Eson is the Director of Research and Chief Economist at the Nigeria Labour Congress in Abuja. He told Black Britain that given the size of the economy and the huge population in Nigeria: “The danger of unemployment resulting from the collapse of industry is very real. We are already battling with that as a result of structural adjustment pushed by the World Bank and the IMF where we have had to implement trade liberalisation to some extent already.”

According to Ozo-Oson, that partial liberalisation resulted in the loss of 450,000 jobs. He also believes that the EPA is not forward-thinking in terms of the development needs of ACP: “There are many African countries today that are satisfied to just be supplying agricultural products, unprocessed. That may be today, but that cannot be their future. They need development and therefore there must be the possibility of kick-starting an industrial process,” he said.

Ozo-Eson accused the EU of double standards in terms of not wanting the ACP to use industrial policy to promote development: “But we know that in the development of countries in Europe and the development of North America, industrial policy was used very doggedly to promote development.”

He told Black Britain that the EPA will signal the death of industry and mass unemployment and that the governments of ACP countries should have insisted on retaining the collective strength of the ACP and rejected the EU’s six region proposition:

“All these [strategies] they use of divide and rule does not give us the capacity to negotiate on equal terms.”

 source: Black Britain