European Imperialism and Free Trade
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Indymedia Paris / Ile de France | 29 July 2004
European Imperialism and Free Trade
Nicolas Barto
Translated by Anoosha Boralessa (January 2016). Not reviewed by bilaterals.org or any other organization or person
The European Union is on the verge of implementing a series of free trade agreements and is leading a trade policy that can hold its own against the American policy. Indeed, the Cotonou Agreement passed in June 2000 between the Union and its former group of African, Caribbean and Pacific colonies (ACP) provides for the establishment of free trade zones (FTZs) which have to result from what are hypocritically baptised, Economic Partnership Agreements (EPAs). The negotiation of these EPAs is taking place and must be wrapped up before 2008. The FTZs will be gradually implemented between 2008 – 2020. The plan has considerable importance: there is no doubt that these agreements will have severe consequences for the lives of numerous populations that include the poorest people on the planet. At present, this European policy remains largely unknown. It must be noted that the media either does not touch this subject, or gives it very little attention. From this minimal coverage, ensues the lack of debates on these agreements even within militant groups.
From great ambitions
The European Union is not negotiating the establishment of free trade zones (FTZ) with two or three countries. Its agenda is far more ambitious since 79 ACP countries are involved. In addition to the FTZs proposals contained in the Cotonou agreement, there are the future free trade agreement with Mercosur (which consists of Brazil, Argentina, Uruguay and Paraguay), the plan for a Euro-Mediterranean area, negotiations with Syria etc.
With respect to the 79 ACP countries, the Union’s aim is of course to promote EU businesses’ exports, by opening up to them access to ACP markets on preferential terms by guaranteeing multinationals juicy profits from the commercialization (1) that dominate the agricultural sectors of these countries.
Implementing the FTZs means abolishing most custom duties in trade. Therefore, the ACP states will be forced to open almost all their markets to EU products.
Raoul Marc Jennar, a researcher with Auxfam Belgique, highlights that the European Union wants to divide ACP unity into six areas. He poses the following question: «What will remain of the ACP group once this project to divide has been implemented? (2)».
Indeed, the European Union wishes to be involved in the free trade zones and to associate with the ACP countries, which are brought together in different customs unions. The Cotonou agreement «has the specific objective of establishing customs unions with a common external tariff between ACP countries (3)». So the European Union favours regional regroupings and is negotiating putting in place free trade zones with each of these regional entities.
The process is underway. NGOs of the «Cotonou Working Group» sum it up thus:
«the untimely opening of ACP economies compromises initiatives for ACP regional integration. [...] The EU is trying to reduce regional cooperation and the integration processes to a process of trade liberalization, it is dictating the content and rhythm of this liberalization, it is dictating cutting out regional configuration and wants to be party to each of these regional integrations. (4)»
During October 2003, negotiations commenced with the Community of West African States (ECOWAS) – bringing together Benin, Burkina Faso, Cape Verde, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo - and with the Central African Economic and Monetary Community (CEMAC) – bringing together the Cameroons, Congo, Gabon, Guinea Equatorial, Chad, Central African Republic – enlarged at Sao Tome and Principe.
In February 2004, negotiations began with a group of 16 South African and East African States (Burundi, Eritrea, Ethiopia, Comoros, Kenya, Madagascar, Rwanda, Sudan, Seychelles, Zambia, Malawi and Zimbabwe) which have to succeed to create a Free Trade Zone in 2008.
On July 1st, the Congolese Minister for Trade, Adelaide Moundéle Ngollo, announced the launch of the free trade zone of the Economic Community of Central African States (ECCAS). This zone affects 120 million inhabitants, spanning Burundi, the Congo, the Democratic Republic of the Congo, Cameroon, Angola, Gabon, Guinea Equatorial, Central African Republic, Chad, Sao Tome and Principe and Rwanda). It prepares for the entry into force of a free trade zone with the European Union. Therefore this fast tracks, to its advantage, an accelerated remodelling of trade agreements in Africa.
Devastating Effects?
What will be the economic consequences of these free trade agreements with the European Union? The ACP States will necessarily have to face significant revenue losses resulting from abolishing customs, with what that implies for financing potential projects that are socially useful for health and education...
Under «Economic Partnership Agreements» unilateral trade preferences that are currently in force are replaced by reciprocal preferences. In this way, the European Union offers its firms privileged access to the markets of 79 Third World countries. But producers that are barely competitive in these countries - are they going to be able to compete with European products that are often subsidized (Europe has committed around 40 billion euros of subsidies for these producers in 2003 (5)?
In a communiqué dated 4 October 2002, the association Action Solidarité Tiers Monde declares that the European Commission (which we recall applies a mandate established by States) «seems to completely underestimate the implications of these proposals. The majority of ACP countries, and in particular the PMAs, are not in a position to face competition from European products in their own markets or to sell their products in European markets.»
There is an urgent need to do something about the possible consequences of these EPAs. CONCORD, a confederation of European NGOs, paints an alarming picture: «The establishment of Free Trade Zones will expose ACP states to simply devastating competition from the EU. [...] The impact study on development commissioned by the European Commission highlights that for West Africa, EPAs could precipitate the collapse of the manufactured products sector.(6)» European industrials will be able to pursue their profitable activities without fearing the emergence of African competition....
The European Union wins on all fronts: it guarantees the supply of raw materials (peanuts, coffee, cocoa, cotton...) from its market and from its process industries and undermines the potential for developing African industry. Furthermore, the extroversion and specialization of African agricultures will probably be strengthened to the detriment of food producing cultures, that are barely competitive in the face of subsidized European products. So, the ACP countries risk sinking to even greater levels of dependence and under-development.
The Parliamentary Confidences
It seems evident that these trade agreements are capable of devastating third world economies that are already in a bad way. The inequalities between the so called “partners”is so outrageous that even the MP, Jean-Yves Gateaud, in his report to the National Assembly on the ratification of the Cotonou Agreement, has been forced to make the following concession:
«Generally, the markets of ACP countries towards reciprocal liberalization represent a gamble, the economic consequences of which are not understood (7)».
If one trusts this report, then the precautionary principle, that the French State has just inscribed in its constitution with much fanfare, would require these EPA negotiations to come to a halt....
Jean-Yves Gateaud discretely evokes «the social cost of transition». He admits that «you can understand the concerns of ACP countries because there are many unknowns as to the potentials and constraints of the future system». He repeats this, concluding: «What will be the consequences of the trade liberalization forecast? We have no guarantee that allows us to assert that it will lead to increased development.»
Paulette Brisepierre’s Parliamentary Report also examines «the relevance of the new trade regime as a determinant of development ». The author cannot help observing that: «The reduction of custom revenues, the disappearance of whole sectors of the economic fabric due to competition by European products that may provoke a serious destabilization of the ACP economy.(8)»
The Implication for Civil Society?
These remarks have not, for sure, prevented our «representatives of the people» from ratifying the agreement. There is still the civil society, the militants of the NGOs, associations, the trade unions, to try to limit, even in a small way, the dominating and even devastating character of the EPAs. Now, as Jean-Yves Gateaud proudly highlights: «with the Cotonou Agreement, local collectivities, trade unions, professional associations, representatives of the private sector, local NGOs and other actors officially enter into the partnership to mobilize the population about the objectives of transformation and modernization.»
Thus European imperialism anticipates the criticism and tries to integrate potential anti-Establishment figures that it would like to rein back to the role of welcoming observers or moral guarantors. This method is not new. However, it is not always effective. As for the implications of the Free Trade Zones for populations of Third World countries, there is no guarantee that all civil society « partner» actors will accept playing by the rules of the game.
Not all“development” NGOs have the same policy and function – far from it. However, we should be under no illusion about how aggressive the largest among them are. In this regard, a parliamentary report specifies that: «the agreement also provides prioritizing the development of the capacities of these participants so that their role is recognized and does not stay merely potential.» Else put, these NGOs, meant to fight against poverty and «to bring about development», are going to see their finances increase thanks to an agreement that will probably have the effect of increasing poverty and draining all possibility of development!
Besides, these bureaucratic organizations are already stuck in a joint system that makes them an extension of the State, labelled «civil society». Contrary to what they would like to believe, in playing the part of anti-globalists at Porto Alegre, the big NGOs (Médecins du monde, Action contre la Faim, Comité catholique contre la Faim et pour le développement, Agrisud international etc.) are not counter-powers, but partners of the State, almost mere sub-contractors and representatives. The term «partnership » is currently employed. Thus, Jean- Yves Gateaud could declare that «the future of cooperation is by NGOs » who «have become indispensable partners of State cooperation (9)».
Let us also cite the explicit declarations of Jean-Louis Sabatié, head of the Mission for Non Governmental Cooperation to the Minister for Foreign Affairs:
«Today, civil society actors, in various places, are increasingly involved in initiating and implementing cooperation projects that are co-financed by public powers, generally on issues related to the struggle against poverty. [...] These actions are in synergy with institutional cooperation with which they share the same strategic framework. In this way, they sketch the new contours of a French cooperation where the public interventions of the Minister of Foreign Affairs and the French Development Agency (FDA) complements the interventions of international actors.(10) »
The discretion of these NGOs faced with the dramatic implications of the EPAs can provide no other reason. They do not lack information since they are connected with the negotiations. But they are linked to the French state and to the European Union by multiple «structures of cooperation and dialogue» (Development Cooperation Commission, Mixed Commissions, Club of International Organisations to AFD, HCCI...) and notably, financing - the primary concern of all bureaucracy.
Around 40% of the big NGOs’ budget is sourced from public resources. In 1999, the Minister of Foreign Affairs has distributed 35.37 million Euros to the OSI and the European Union, 127.75 millions (equal to 49%) of their public resources. One understands that officials of these NGOs do not utter a word about the EPAs. This is all the more since the EU is pledging fresh financing to them...
These organizations have access to the media and know how to mobilize public opinion. They handle the range of outcry very well when it comes to obtaining financing, empty talk or stigmatizing innocuous targets for their financial supporters.
Most have always been silent on structural mechanisms for domination. In guaranteeing, would it not be the case that by their silence, some agreements that, most probably, are going to aggravate poverty and develop under development, could well end by being disqualified.
On the Attac France’s website, under the heading «International Trade», there are several articles dedicated to the draft Free Trade Area of the Americas (FTAAs)(11). But there’s nothing on the Cotonou Agreement. It seems that although this association is armed with an impressive «scientific council», it does not struggle against free trade when it profits the US...In the sole article in Monde Diplomatique devoted to the subject to date («The European Union Under the Fire of the Criticism», June 2002), the term « free trade» is not even used once. Thus the readers miss the basis of the Cotonou agreement.
The engine effect of inter-imperialist rivalries
Rival imperialisms are engaged in a struggle to divide the world which translates notably into a race to sign free trade agreements, since any agreement implemented by one, favours their exports and leads mechanically to shrinking the market share of the other. This is what happened when NAFTA entered into force: Mexico’s share of the Union’s market went from 17% in 1994 to 9% in 1999 (12).
Pascal Lamy mentions this race during a hearing at the National Assembly:
«The negotiation with Mercosur is important on the geopolitical level because Europe is engaged in a race with the US’s proposal for a Free Trade Area for the Americas. But, today the Mercosur states agree that for political, cultural and trade reasons, they prefer to conclude a free trade agreement with Europe rather than the United States. (13)».
Lula’s arrival to power has thus been an excellent bit of news for European imperialism.
The parliamentary fact-finding mission on its return from Brazil made the same observation:
«The interest of France and the European Union, which also reflects Brazil’s desire, is that this country does not fall into the American nets for a Free Trade Area of the Americas. The French business community which met at San Paulo insisted on this point. (14)».
The negotiations are delicate. The European Union would like to see Mercosur open its market to European industry and European services. But in contrast to the ACP countries, the Mercosur countries export agricultural products (beef, bioethanol, poultry, corn...) which can seriously compete with European production...
The European Union is already the number one investor in Mercosur:
« According to the most recent Brazilian statistics that are available, in 2000, the European Union has almost half (47%) of foreign direct investment stocks in Brazil, whereas the United States only has 25% (15)»
It is also its first trade partner with at least 25% of the market share of this vast regional area bringing together 221 million residents, that is, 42% of the population of Latin America.
Contrary to a very popular idea in France, the Union is not retreating from trade aggression. It is «the trading bloc of world trade linked by the biggest number of free trade agreements (more than thirty) (16) » noted a National Assembly Report in November 2003.
Jacques Ellul highlighted that the propaganda created a system of misrepresentation. On the ideological level, the European Union has every interest in maintaining a biased representation of imperialism, hiding the responsibility of European Capitalism in the disorder of global capitalism.
The United States has concluded its own free trade agreements (with Canada and Mexico, Israel and Jordan, Chile and Singapore) and has resumed negotiations (with the FTAAs countries, Morocco, Australia etc.). But in this country, there are some movements that are opposed to these policies. Why do you not hear about such movements in France? The question takes on particular importance for the people of the ACP countries.
Different imperialisms have always negotiated both bilaterally and multilaterally. Following the failure of the WTO Summit at Cancun in September 2003, they run the risk of preferring regional and bilateral agreements to the multilateral structure. Also, it would be, at the least, incoherent to keep focusing on the WTO while overlooking numerous bilateral agreements. The absence of a counter-power at the bilateral level is the open door for all predations.
Nicolas Barto, July 2004.
1/ For example, the French multinational DAGRIS controls the subsidiary Coton in West Africa. It fixes the purchasing price for producers, a price that is only 7 - 8% of the final price. Let us note that some US groups are developing strategies to penetrate the European market by investing in ACP countries in order to benefit from agreements binding these countries to the European Union. Thus the Dole group made an acquisition of significant holdings of Compagnie Fruitière. But for the peasant farmers, who escape commercialisation, exploitation remains the same, whether the firm is American or European.
2/ Raoul Marc Jennar, « L’accord de Cotonou. Les formes nouvelles du colonialisme européen. », http://www.astm.lu This association’s website has a number of interesting articles.
3/ Information Report filed by the National Assembly’s delegation to the European Union, Sur l’agriculture et les pays en développement à l’organisation mondiale du commerce, filed by Mr. François Guillaume, 21 January 2004.
4/ CONCORD, Cotonou Working Group, « Pourquoi l’approche des négociations commerciales régionales adoptées par l’UE est mauvaise pour le développement », http://acp-eu.euforic.org, April 2004.
5/ Pascal Lamy, «Les APE favoriseront les échanges », Jeunes Afrique/L’intelligent, n°2253.
6/ « Pourquoi l’approche des négociations commerciales régionales adoptée par l’UE est mauvaise pour le développement?», op.cit.
7/ Report of the Commission for Foreign Affairs «Sur le projet de loi autorisant la ratification de l’accord de partenariat entre les membres du groupe des Etats d’Afrique, des Caraibes et du Pacifique d’une part et la communauté européenne et ses Etats membres d’autre part», recorded 13 February 2002.
8/ Report made on behalf of the Commission for Foreign Affairs on the ratification of the partnership agreement between members of the ACP group and the EU, 31 January 2002.
9/ National Assembly, Opinion on the draft Finance Law of 2002, intervention by Jean-Yves Gateaud, the rapporteur of the Foreign Affairs Commission on Cooperation, 11 October 2001.
10/ «Résultats de l’enquête de la Commission Coopération Développement sur les ressources et dépenses des organisations de solidarité internationale en 1998 et 1999 »,http://www.coordinationsud.org
11/ The FTAAs negotiations are at a standstill notably due to the opposition of Argentina and Brazil, who are asking for US agricultural subsidies to be eliminated.
12/ See the Information Report filed by National Assembly’s delegation for the European Union, Sur les relations avec les entités régionales, 28 June 2001.
13/ Hearing of Mr. Pascal Lamy, European Commissioner For Trade Negotiations, review n°91, 6 July 2004.
14/ Information Report following a fact-finding mission was delivered in Brazil by Mr. Jean Bizet, Mrs Odette Terrade, Mr Christian Gaudin and Mr Daniel Raoul, filed 30 June 2004.
15/ Ibid.
16/ Information Report filed by the National Assembly’s delegation for the European Union, Sur les négociations à l’Organisation Mondiale du Commerce, introduced by Marc Laffineur, 13 November 2003.
