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Economic Partnership
Agreements:
STEPPING STONES OR
STUMBLING BLOCKS?
By Gideon Sackitey,
Ghandot.com
Accra - The 5th World Trade Organization (WTO)
Ministerial in Cancun, Mexico true to
expectation collapsed, failing to come to any
agreement on rules to govern world trade.
For Africa, Caribbean and Pacific (ACP) states
the situation leaves them with little or no
option on the way forward to performing on the
world market.
To many observers and experts, the blame falls
squarely on the European Union and United States
of America whose threats and insults throughout
the conference have shown their complete
contempt for the needs of the world's
poorest people.
The fact is that for many after the Lome,
Cotonou agreements and the low expectations
associated with it, the advent of the Economic
Partnership Agreement concept was a welcome
idea, which many saw as a stepping stone to lift
weaker trading nations onto a higher
and stronger plane on
trading with the world. There were others
who thought of the whole idea as a
stumbling block to changing
the current hopeless situation
of poor countries in the world of trade.
Action Aid's
International Campaign Head Adriano Campolina
Soares put it bluntly when he said: "The EU and
US leave Cancun in shame, exposed as cheap
conmen. The rich countries have only looked
after their own interests and clearly never had
any intention of offering anything of real
benefit to developing countries. If the WTO can
do no better than this, developing countries
will simply question why we need it at all."
The coalitions formed by developing countries
have held firm despite extreme pressure from
rich countries. Developing countries have
managed to resist the most dangerous elements of
the rich country wish list by successfully
keeping the controversial 'new'
issues of investment, competition policy,
government procurement and trade facilitation
off the WTO's agenda.
While this has staved off for now the most
dangerous expansion of the WTO's
agenda, the collapse of Cancun means that
developing countries have been denied the gains
they were seeking on the central issues of
international trade.
On the key issue of agriculture, the EU and US
have tried and virtually succeeded to squirm
their way out of reducing subsidies to their
farmers and exporters.
One thing is certain however, is that the
coalitions of developing countries came out of
the Conference with greater unity, which will
provide a better environment for further
international trade talks.
To make the ACP
countries believe in further
talk, the EU and US in particular must
honour the commitments they made at the last
Ministerial Conference in Doha.
The WTO must examine its woeful record and
rethink the damaging free trade mandate on which
it is based. The fact is that the free trade
concept creates a jungle situation where only
the fittest survive in the context of
competition between the
weak versus the
more established nations; the result can be
predictable. Only the
rich, developed nations can win. The WTO
must be careful not to implement the divide and
rule tactics of the EU
Trade Minister's design,
even though some think that
approach may be a good beginning.
For instance, on the eve of his departure to
Mauritius two years ago to launch WTO talks, EU
Trade Commissioner Pascal Lamy said: "The EPA
negotiations with Eastern and Southern Africa
will follow a hands-on approach: development is
the objective, trade one of the tools. By
initiating negotiations on a regional basis, our
partners have already taken a big step towards
deepening and accelerating their own economic
integration. If at the end of these
negotiations, Eastern and Southern Africa stands
as a stronger region, able to define its common
interest and improve jointly the environment for
business and investors, we will all have won."
The EU Development Commissioner Poul Nielson
also had this position: "I am encouraged by
Eastern and Southern Africa's important decision
to initiate EPA negotiations with the EU.
Deepening regional
integration, breaking down barriers to
neighbours and creating larger markets are
crucial steps if these countries are to
stimulate the necessary investments and
productivity improvements that will drive their
development. But at what cost are these things
to be done, especially when you consider the
fact that this EPA
perspective is very long term
one.
This long term consideration
is making ACP
countries wonder if the EPA's
are really the
stepping stones they are
supposed to be or
really stumbling blocks aimed at
hindering the ACP states,
especially African states,
from becoming like those rich and
developed nations of
the west?
One conclusion must be drawn
from the above. Above all, our (ACP)
leaders must wake up from some of the
shortsighted tutelage of WTO, World Bank, IMF
and their affiliates.
They must come up with sound, pragmatic
and workable policies which
collectively has the potential of making
the toil and sweat of our poor farmers not only
profitable, but sustainable.
Is there any reason
why the poor sorry state of farmers in the ACP
countries is nothing to write home about? Just
cast your mind back to how farmers in these
regions have fared over the last 50 years of
more and you will understand my drift.
I believe that it is time for a complete
turnaround of the nation's
agricultural policies and a real attempt
be made at
implementing germane practical steps that have
remained on research documents over the decades
and to translate these
ideas into profitable ventures.
There
is need for a complete paradigm shift in
administration and application of agricultural
research practices that would put more food on
the tables of citizens and make the
agricultural business
a proud
one; a trend that
western nations have applied and profited from
tremendously.
In Lawrence E. Hinkle and Maurice Schiff's
"Economic Partnership
Agreements Between Sub-Saharan Africa and the EU:
A Development Perspective,"
they analyse EPA's
between the EU and Sub-Saharan Africa (SSA) from
a development perspective that makes the concept
and a liking to it easier.
They do
not take a position on whether SSA should enter
into EPA's with the EU.
Rather, they examine the notion that the process
of forming EPA's is
unlikely to be reversed and examines the
conditions that will maximise SSA's benefits
from the EPA's.
They contend that the above
notion is correct, then the analysis presented
in the paper applies.
On the other hand,
Pascal Lamy, the EU Trade Commissioner, made a
proposal at the May 2004 G-90 summit in Dakar
that might lead to a change in the EPA process.
He proposed
that the G-90, a group consisting of ACP and
non-ACP LDC countries, should not have to make
concessions at the WTO Doha Round of
multilateral trade negotiations, that is to say
he proposed a 'free round' for the G-90. This
proposal opens the door to the possibility that
the same might apply to the ACP countries in the
EU-ACP negotiations and that the EPA process
might be reversed!
The argument then arises that EPAs will pose a
number of policy challenges for SSA countries,
including: restructuring of indirect tax
systems, reduction of MFN tariffs,
liberalisation of service imports on an MFN
basis and related regulatory reforms in the
services sector, and liberalisation of trade in
both goods and services within the regional
trading blocs in SSA.
Hinkle and Schiff explained in their book that
EPAs provide an opportunity to accelerate
regional and global trade integration in SSA. To
realise the potential development benefits of
the planned EPAs, two steps are essential.
First, the EU must, as it has stated, truly
treat the EPAs as instruments of development,
subordinating its commercial interests in the
agreements to the development needs of SSA.
Second, the SSA countries need to implement a
number of EPA-related trade policy reforms as
stated earlier. In this regard, ACP states or
SSA's far from
certainty in the spirit of reform momentum, must
be helped not forced to understand that the
EPAʼs hold or portend some good if comprehension
and application of the policies are fully
understood and appreciated.
Gideon Sackitey, Accra, January 1, 2007
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