A new colonialism? EU trade demands and ACP countries

Caribbean Net News

Commentary: A new colonialism? EU trade demands and ACP countries

By Sir Ronald Sanders

16 June 2007

The European Union (EU) has been pushing African, Caribbean and Pacific (ACP) countries to conclude Economic Partnership Agreements (EPAs) by the end of the year, claiming that preferences which they now enjoy will not be approved by the World Trade Organisation (WTO) come next year.

Now, at last, some government representatives in Africa and the Caribbean are refusing to be pushed, recognising that the terms of the proposed EPAs could make their countries worse off than if they relinquished the preferences.

In any event, preferential access to the EU market for two important exports, sugar and bananas, has already suffered from significant changes to the terms of entry. Preferences, therefore, while still important to small and vulnerable economies, do not have the same worth as they did before.

If, on top of this reality, the EU insists on the further opening up of the markets of ACP countries to give European companies the right to competition and government procurement, local companies could be squeezed out of their own domestic markets.

The EU also wants trade in goods and services opened up on a reciprocal basis. This means that the African, Caribbean and Pacific regions would be treated as if they were the equals of Europe in trade and investment terms despite the huge differences in the level of their development and their financial capacity.

In short, the ACP countries could be swamped by Europe for despite the talk about “reciprocity”, it simply is not possible for ACP companies to compete within their own countries (let alone in Europe) with much larger and well resourced European companies.

Indeed, in as much as the EU countries may not want to hear it, and they would strenuously deny it, these EPAs could well be the start of a new era of colonialism in which the economies of ACP countries are held in thrall to European companies.

The EU has to recall that it is busy fortifying barriers to migration from ACP countries, it should not at the same time be contributing to conditions of dislocation and displacement in which more and more people have to try to get into Europe to eke out a livelihood.

Lest it be said that I am unmindful of the circumstances of poor governance in many ACP countries, and that I am ignoring the need and importance for adjustment in the economies in all of them, I acknowledge these circumstances fully. But, even with the best will in the world to address these issues, ACP countries will be hard-pressed to do so if they are not given the breathing space and helped with the capacity to effect the changes that are necessary.

The Trade Minister of Barbados, Dame Billie Miller, who is a seasoned campaigner in all of the trade negotiations in which the Caribbean has been involved, particularly with the EU and the WTO made a telling observation recently. She declared that regional negotiators remained firmly convinced that preferential treatment must be given to small vulnerable economies and developing countries, as there is a need to protect sensitive sectors and industries from rapid liberalisation.

She went on to say: “"Europe and the other OECD countries gave themselves since the Second World War - virtually the better part of 60 years - to arrive at where they would like us to be. And they expect us to do this in 10 to 15 years. It is just a human and physical impossibility”.

Then, a Namibian trade analyst, Wallie Roux, lost his job because he suggested that the EU was trying to browbeat southern African governments into signing an EPA before they had a chance to analyse its consequences. Roux had urged the SADC governments not to capitulate to demands that they sign an EPA swiftly. He wrote: "If you are unwise enough to rush for a deadline without looking at the content of the agreement, then you are signing away your life".

Both Dame Billie’s remarks and Mr Roux’s observations point to the growing unease of ACP countries with the hurried pace at which the EU wants to complete the EPA’s. There is clearly a need to pause and to reflect more deeply on the implications of the proposed agreements. If they are concluded in haste, there may lead to a long and troubled period of repentance.

It is not sufficient for the EU to dangle the threat of the WTO not extending preferences over the heads of the ACP group. The WTO is a creature of its member-states, and surely if the four regions of Europe, Africa, the Caribbean and the Pacific were to make a case for the extension of current conditions to allow them more time to conclude agreements, other countries in the WTO would listen.

And, if they don’t, then perhaps Russian President Vladimir Putin may be right that today’s international economic organizations "look archaic, undemocratic and awkward" and a new system is necessary - one that is more sensitive to development and less obsessed with globalisation.

Sir Ronald Sanders is a business executive and former Caribbean diplomat who publishes widely on small states in the global community.

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