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EPA, a veritable Hobson’s choice, Mr
Mandelson
E. Ablorh-Odjidja, Ghanadot
The economic Partnership Agreement (EPA) between the EU and
Third World countries is to take effect beginning 2008. With it,
The EU hopes to create trade reciprocity with developing
nations.
Reciprocity is the word used, but in reality what is happening
is an arm twisting exercise against Third Word countries in an
attempt to offer them a choice that had already been used under
colonialism.
The rationale for this new trade arrangement is that it would
help end poverty in developing countries, while allowing rich
countries to benefit if they could sell more of their goods and
services in the developing world.
But what can the Third World offer other than the agricultural
products that the EU subsidizes her farmers to produce cheaply?
Developed countries are wealthier because they are at the high
end of the world trade pole. Not only are they massive producers
of agricultural products like corn, wheat and cotton, but they
dominate the world of heavy industry too. Receipts in trade
dollar amount heavily favor their industries and manufacturing
services and assure their dominance in this field for decades to
come.
Stated bluntly, the two worlds are not on equal footing in trade
and as such it is impossible for true reciprocity to take place
between them without some concessions first. The EPA grants
none.
One cannot trade bananas for tractors or life saving
pharmaceuticals for cocoa beans and claim you are on equal
footing with your trading partner, especially when you don’t
even get to set the price for your own product.
But in the name of reciprocity, the EU is demanding that Third
World countries, mostly former European colonies, sign this EPA
agreement or perish by the end of January 2008.
As reported in Ghanadot.com, on Sept. 19, Mr Peter Mandelson,
the EU Trade Commissioner, “warned that there would be no legal
basis for the extension of existing preferential trade terms
between the EU and the 78 African, Caribbean and Pacific
countries if the two sides do not initial new Economic
Partnership Agreements (EPA) before the end of 2007.”
The threat in Mr. Mendelson statement was real; except he failed
to note why the developing nations are not rushing to the table
with pens ready.
By September 27, 2007, Mr. Mendelson was ready to repeat his
warning in an on-line BBC publication that said “former European
colonies ..could miss out if they do not sign up to new trade
deals” and that “those who relied on exports of goods such as
bananas and fish faced a risk to their livelihoods.”
The cruel part of this statement was that the message was
directed at a constituency of exporters in the Third World whom
non-compliance with EPA agreement would hurt most. The intent
obviously was meant to prod them to put political pressure on
their governments, the very entities in the Third World the EU
was negotiating with, to force them to sign the deal. Thus the
unethical hand of the EU was revealed.
Since 2001, Third World governments have been demanding for the
lowering of trade barriers to agricultural exports from
developing countries and the removal of subsidies paid to
farmers in rich countries, some say to the tune of some $300
billion a year, in exchange for a fair trade deal, but the
effort has been to no avail.
Ironically, the EU, through Mr. Mandelson’s exercises, has
revealed more zeal in forcing Third World governments to sign
the EPA deal than she has ever shown in her willingness to end
farm subsidies to her rich farmers; never mind the fact that
ending farm subsidies in Europe would boost agricultural
production faster and help end poverty in the Third World.
But the reason why the EU has taken this approach is obvious; EU
countries have the most to gain in an EPA deal that fosters
competion with the fragile economies of the Third World.
In the good old days of the colonies, there were no barriers to
the flow of trade to the dependent nations who produced nothing
other than raw materials. Market integration was forced on them
as part of the colonial regime.
The inherent key in any market integration is a force that moves
both markets to the “comparative advantage” stage.
In time, the “comparative advantage” meant each partner would
produce goods in the field in which he excelled. Soon, the
colonized became the “hewers of wood and drawers of water.”
This trade partnership called for under the EPA arrangement is
the same as the oe in the colonial arrangement. For the Third
World, the choice is one that good old Hobson could not have
improved.
Thus EU countries would flood Third World markets with cheap
products from their modern and efficient industries and
industries in the Third World, with aging and antiquated
machinery, would be forced to compete. The result can only be
detrimental to the industrial sector in places like Africa.
On the flip side, in EU markets, very little will be gained by
Third world goods, bearing in mind that most of what the Third
World produced would agricultural products mostly. European
subsidy to her farmers would have already gutted the benefits
obtainable under the EPA.
But such is the world when one refuses to learn. The EPA cocept
is the same trade arrangement as was during colonial times. The
colonial dependency, disturbed by the granting of independence,
is about to be reinstalled under the guise of a different name.
Threat from Mr. Madelson aside, if only Africa could have a
common market, it could then say to him that any imposition of
tariff on our products by Europe would result in an imposition
of same on yours. Then Africa can go ahead and open her markets
to India, Chinese, Japanese, American and others who decide to
play fair.
E. Ablorh-Odjidja, Washington, DC, September 30, 2007
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