10 reasons to challenge the Pacific EPA


Prepared by Professor Jane Kelsey, School of Law, University of Auckland

September 2006

1. Do the Pacific Islands’ negotiators genuinely hope they can negotiate a beneficial Economic Partnership Agreement with the European Union or are they simply going through the motions and doing what is required of them under the Cotonou Agreement 2000? In the secretive chess game of trade negotiations it is impossible to know. Realistically, the Pacific Islands cannot expect to gain anything from an EPA. The few gains the governments hope they might make are likely to be blocked by the EU and they would face serious economic and social costs in return. But so long as they remain at the negotiating table there is a risk that Pacific negotiators will not walk away from a ‘take it or leave it’ deal.

2. The current negotiations for a Pacific EPA are due to be concluded by December 2007. A draft legal text has been prepared that would seriously limit the options of future Pacific Islands governments. That text has already been discussed informally with the EU. But members of parliament and the affected communities in the Pacific Islands have not seen it; indeed, it is not clear if they will get to see it before the negotiations are concluded. To ensure they can, the draft text obtained by NGOs is available on www.bilaterals.org. Detailed comments on the text are being prepared so Pacific people can see what is being proposed for their future - something that the negotiating governments and Forum Secretariat should have done.

3. Governments from the Pacific and other sub-regions in the Africa Caribbean and Pacific (ACP) group have said they want to explore alternatives, because they see little to gain and much to lose from an EPA. The EU has been very cunning in avoiding discussion of those alternatives. By getting the six ACP sub-regions to draft the first texts, the EU has drawn them into negotiations where they will be tempted to defend ‘their’ texts. Each of the sub-regions is working in isolation from the other, which increases the EU’s ability to divide and rule. Meanwhile, consideration of alternatives is taking place in a long drawn out review process that won’t be completed until around March 2007 and is running on a separate track from the negotiations on the EPA text.

4. The initial draft EPA text sets out the Pacific ACP governments’ wish list. So that text is as good as a Pacific EPA is going to get. Yet it is only the starting point for negotiations. Any final text will be much weaker because the EU will refuse to accept the parts that it doesn’t like. It hasn’t even agreed to the unorthodox ‘framework’ on which the whole agreement hangs and is refusing to fund the many facilities and activities that are proposed. The text has attempted to change the standard trade rules to advantage the Pacific and include proposals that could benefit particular countries and sectors. But most, if not all, of those innovations are likely to disappear. The more deeply the Pacific Islands governments become immersed in negotiations on the text, the less willing they may be to reject a bad compromise. That risk is heightened because the negotiations are invisible and there is no effective accountability.

5. The Pacific ACP governments have taken a defensive approach to the EPA. Their main concern is to avoid triggering negotiations with Australia and New Zealand under PACER, which have the potential to devastate Pacific Islands’ economies. The trigger is activated if they negotiate a free trade agreement on goods with the EU. That is why the main text is called a ‘framework agreement’, which all the Pacific ACP governments could sign, and the agreement on goods is in a separate Annex. As soon as any Pacific ACP countries begin to negotiate with the EU on goods, Australia and NZ will demand negotiations with them too. The governments that are thinking of taking part in a goods agreement are Fiji, PNG, Solomon Islands, Samoa, Vanuatu, Tonga and maybe the Cook Islands. Yet they have nothing obvious to gain, especially if the EU rejects proposals for more flexible rules as seems likely. Only Fiji and PNG have any significant trade with the EU, and most of Fiji’s trade is caught up in the separate discussions over sugar.

6. The draft text contains chapters that deal with different issues: agricultural development, services, tourism, investment promotion and protection (which is blank), trade facilitation and promotion. All these are key areas of national policy. Bringing them under the EPA would tie the hands of future governments in deciding the paths they want to follow. Democratically elected governments would have no choice but to continue the global market model of development that has already failed too many Pacific countries.

7. The text proposes to vest authority over key Pacific development strategies in Partnership Committees made up of EU representatives and Pacific trade officials. It says the Pacific governments retain the full control over their develop strategies and models of their economies and societies ‘in all their sovereignty’. But these committees would receive, approve and review national and regional strategy papers in all the main areas covered by the EPA. There is no guarantee that Members of Parliament and the public would be involved in preparing the documents or that the papers would be made public before being sent to the committee. It is common practice for such committees to work in secret with no effective accountability to national parliaments or their citizens.

8. One explicit goal of the Agriculture Development Strategy is ‘to assist in the reform of laws, including laws relating to land tenure’, with ‘enabling policies’ that ‘endeavour to strengthen local institutions and enact policies and legislation that provide for equitable and secure access to ownership and control of natural resources, particularly land’. This could mean improving the rights of ordinary people over land and resources. But in a trade liberalisation agreement whose model of agriculture centres on cash cropping for export, it is more likely to mean secure control over larger-scale land holdings for individuals and companies, including foreign firms. Any changes to land laws made for agriculture would flow on to tourism, forestry, mining and more. There is no mention of people’s participation in these decisions, constitutional protections for land rights, or the social, cultural, environmental and spiritual dimensions of land.

9. Trade in services is a complicated and high risk area that can limit the way governments can regulate banking, electricity, sanitation, education, ports, retail shops, health care and much more. The draft text proposes to give EU companies rights to supply services in the Pacific Islands when it doesn’t have to and there are rumours that governments are being advised to make reckless commitments. The Cotonou Agreement says services don’t have to be included in an EPA until countries have had experience with such agreements. Only Fiji, PNG and the Solomon Islands - 3 out of 14 Pacific ACP countries - have signed the WTO services agreement and their commitments are minimal. Vanuatu and Tonga have put their accession to the WTO on hold partly because of concerns that they agreed to excessive services commitments. Yet it is rumoured that the Forum Secretariat’s advisers said Tonga should offer the same list of services in the EPA! Hopefully that is wrong, but the secrecy of the process makes that hard to know. Even new wording that is supposed to protect public services is ineffective and has already been identified as something that could be traded away.

10. The Forum Secretariat promised a meeting of civil society groups in Nadi in June 2006 that there would be a social impact assessment of the Pacific EPA before the negotiators decided their final position. The Pacific trade ministers agreed to the study. Pacific NGOs made it clear that they wanted to play an active role in the impact assessment, but they have been ignored. The terms of reference for the ‘social impact assessment’ of the Pacific EPA are a farce. It will not look at the likely social impacts to decide whether there should be an EPA, only how ‘to cushion the impact of an EPA’ once it is negotiated with the EU. There is no consideration of alternatives. A consultant is supposed to conduct a comprehensive review the social impacts of the EPA across a sample of Pacific Islands in 35 days and make an interim report by 15 December. The final report will go to ‘technical experts and senior government officials’ in late January 2007. There is no requirement to consult the people on the ground who understand the social impacts in their communities, no provision for independent peer review by those people, and no promise that the final report will be made public.

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