‘Silver lining’ around EPAs

The Post (Zambia) | Tue 06 Apr. 2010

‘Silver lining’ around EPAs

By Chiwoyu Sinyangwe

SO much has been said about the ongoing negotiations between the European Commission of the European Union and the African, Caribbean and Pacific (ACP) grouping countries.

Indeed, so much will still be said for as long as the negotiations drag on. The new trade agreement being negotiated is aptly called the Economic Partnership Agreements… EPAs as the name is fondly called by both its proponents and opponents.

Having spent the second week of March in the company of other journalists from Cameroon, Comoros, Congo (Brazzaville), Democratic Republic of Congo, Dominican Republic, Fiji, Gabon, Ghana, Ivory Coast, Malawi, Madagascar, Nigeria, Chad and Zimbabwe touring the European capital, Brussels, allow me to ‘risk’ concluding that the standoff in the EPAs is artificial.

At least, this is the impression I got having listened to key members of the European Commission connected to trade negotiations; making comparisons with concerns of ACP countries.

The demands of both sides are very clear: The EU will completely open its market to ACP exporters. No more duties, no more quotas.

There will be transitions for sugar and rice but for all other products the tariffs and quotas will be eliminated from day one.

The ACP countries will not be asked to match this offer, and the tariff reductions they do offer will be subject to the flexibility provided by World Trade Organisation (WTO) rules which means the right to protect sensitive markets and use long transition times for change.

In short, the ACP countries will have to make their markets 80 per cent permeable to European finished goods. Reciprocally, the European markets will have to open 100 per cent to goods from Africa. That is the gist of the negotiations and that sounds very rosy on face value. That sounding very rosy, one wonders why there has been continued resistance from ACP, especially African countries to sign the EPAs?

From the African perspective, EPAs portray an attempt by Europe to disintegrate regional groupings which in recent times have made some progress, albeit, at a very snail’s pace. EPAs are seen as an attempt by Europe to pulverize the fragile African industries and perpetually maintaining the continent as a net exporter of raw material and yet a huge market for finished goods. EPAs are seen as an attempt by Europeans to hold back the fast flowing shift for Africa’s economic relationships from its north to the Far East – China!

Africa’s view on EPAs can be summed as an attempt by Europe to push its agenda and erode development successes scored by its 77 former colonies congregating under the ACP umbrella grouping.

Last January, African Union (AU) chairman and Malawian President Bingu wa Mutharika said his country would not be part of the EPAs in their current format since the intention of Europe was to divide Africa.

“EPAs are a divide-and-rule tactic being advanced by Europe for selfish interests and Malawi will not sign until all concerns are addressed and I know all these manoeuvres since I was among the pioneers of regional integration,” says President Wa Mutharika.

President Wa Mutharika, who is former Common Market for Eastern and Southern Africa (COMESA) secretary general, says “the agreements will be signed over my dead body!”

That is how the EPAs are loathed. That is gravity of resistance among the African top brass.

The negotiations on these EPAs started in September 2002 and were supposed to be completed by December 31, 2007, as a WTO waiver on the non-compatibility of the EU’s preferential trade relations with ACP countries would expire by then.

I just do not see the EU continue discussing with us endlessly.

One thing is very clear: These agreements will go on whether ACP wants it or not.

“…But the problem is that you will have to show me how the EPAs will create the inequality. I would like to know the flaws in EPAs… to just say EPAs are a failure is not a solution. The EPAs is a model that has been worked all over the world,” EU Trade Commissioner Karel De Gught told a group of journalists from ACP in Brussels.

The EU is certainly resolved and the free trade agreements will go on. I just find it illogical for African countries to continue resisting agreements that they eventually have to sign. Why not start preparing the industries, the people and indeed, the country for this eventuality?

The aspect of regional integration is one that has dogged this continent for a long time. The EU could be blamed for countering the efforts of Africa’s integration but introspection is crucial here. Apart from multiplicity of regional blocs, for a continent with one billion people in 53 countries to have five regional groupings is incredible.

Sadly, these groups have spent more efforts and resources pursuing issues that protect their political interests rather than economic development.

The Economic Community of West African States (ECOWAS), a regional group of west African countries founded on May 28, 1975 has spent more time and resources stabilising the political environment in the region rather than their macro-economy and trade relations. The trend is almost the same with all other groupings. The East African Community (EAC) could be excused but things are not any better.

Regional integration should be seen more of Africa’s agenda than Europe. It’s up to Africa to foster this regional integration which has weakened the continent’s bargaining power.

Sources close to the transaction indicate that African countries negotiate in a group of countries with an average of six delegates per country while EU comprises only an average of three member committees. Maybe that is one area that needs revision; some officers will certainly have to forego their much desired allowances and per diem, but certainly there is need to streamline the way we do our business in the interest of orderliness and to ensure progress.

The signing of EPAs by individual countries or specific sub groupings within ESA, Southern African Development Community (SADC) or ECOWAS will establish multiple and different trade regimes that would eventually undermine current regional integration agendas. It’s only Africa that can preserve its interests.

Almost 50 years after independence, African communities are still struggling to trade among themselves. In fact, the least of Africa’s trade relation routes lie in intra-trade.

“Whether it is Europe or Democratic Republic of Congo (DRC), the dollars are the same, and in fact, trading among ourselves is less complicated than going to Europe,” commerce minister Felix Mutati said.

Africa’s competitiveness is still the lowest in the world and instead of deferring the EPAs, Africa must start addressing these bottlenecks because the EPAs are certainly coming.

In trade, competitiveness plays a major role and if Africa is to participate in the global market, the continent must become competitive and this is not just for the EU markets but the whole world. Access to EU and international markets for Zambia will require the country to work on competitiveness through reducing the cost of doing business. If only more energies could be spent on attaining that rather than resisting the inevitable.

I know De Gught says “I have no problem with Chinese increasing influence in Africa, but" but I hope China acts within the international trade rule, and if it does that, then it is entitled to be there in Africa,” but reality is that everyone wants to get a benefit from their investments. After all EU has been the biggest provider of development assistance to Africa. I know Europe is willing to provide funds to help the country deal with the supply constraints, but that can only be seen if we attempt to start seeing the silver lining of this cloud called EPAs. The country needs to start maximising seriously on the EDF.

The fear of the local markets being flooded by foreign finished goods does not sound entirely strong an argument. We have no concrete trade agreements with China but who has escaped Chinese products on the local market? The other source, South Africa is the same. In fact, one of the contentious issues in the SADC FTA is fear by member countries that their fragile domestic industries will eventually be swallowed by the gigantic South Africa commerce sector…on that basis, the fear of European goods flooding the local market sound more of a myth than practical.

What I know is that most international agreements are complex and the powerful will always dominate and exploit the weak and I can take my journalistic gymnastics to suggest that the principles that apply to EPAs are not very different.

Zambia and other countries should start devising ways of surviving the aftermath of the EPAs rather than deferring signing of the trade agreement.

This is the opportune time to start seriously exploring the clauses such as graduation and nurturing of infant industries in view of free trade agreements, emphasizing so much the component of development aid and the general development path within the framework of the EPAs. Issues of market access will certainly be indispensable…if only we can expend our little energies in those areas.

It is amazing that some countries are negotiating the EPAs with the EU to promote market access for products and goods like bananas, honey and fish, things that only succeed in going to rot in this country due to lack of ready market. By the way, these products are their mainstay. It’s their copper. I just cannot imagine how many impoverished rural dwellers can be unshackled from the jaws of poverty, if only we provide market access for them…only if we can see a silver lining within the dark cloud of EPAs.

It is therefore gratifying to learn that De Gught has shown strong willingness to meet Mutati and Malawian trade minister Eunice Kazembe next month to discuss the stalled EPAs negotiations in the ESA region. It would be interesting to see the number of delegates the two ministers will carry.

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source: The Post