EU trade agreements – gambling with livelihoods in the developing world?

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The EU is locked in last minute negotiations with countries from the African, Caribbean, and Pacific (ACP) group on Economic Partnership Agreements (EPAs). Any country not signed up by 1 January faces losing its EU trade privileges under the EU’s (self-imposed?) deadline.

The war of words is ferocious. Oxfam argues that the EU is pursuing “… an extremely aggressive agenda that pays little more than lip service to development”. Bob Geldof and Africa advocacy group Data have weighed-in with an alternative African Trade Initiative. EU trade commissioner Peter Mandelson retorts that campaigning NGOs are putting huge political pressure on countries not to sign, and are giving out misleading information. Together with Louis Michel (EU development commissioner) he recently argued in the Guardian that: “critics of the EU’s trade agreements are gambling with livelihoods in the developing world”.

Last minute confusion reigns over who has signed and what they are signing up to. Trade-expert Chris Stevens is tracking the story on the ODI blog. The ACP’s manufacturers worry that there will be no tariff protection for industrial development. Mandelson argues that the trade preferences of the last 30 years have not delivered much industrial development, and that EPAs offer a new beginning. The WTO gave the EU and ACP 7 years to sort this out, so this is hardly rushing it, concludes the EU trade commissioner.

The East African Community, the Seychelles, and Zimbabwe have signed. Angola, Fiji and Papua New Guinea seem willing. Some Southern Africa Development Community (SADC) members were close to signing, but South Africa and Namibia have refused to sign-up. They don’t want to be bound to offering the EU the same terms as any future bilateral trade agreements with other parties (under the EPA ‘most-favoured nation’ clause). Loss of EU privileges will hit Namibia’s beef industry. South Africa need not worry about an EPA: it already has a bilateral trade treaty with the EU.

The EU argues that it offering 100% market access under EPAs (except for sugar and rice) and that if any partners grant more market access to others in future deals, then the EU should get the same treatment. The EU is pursuing the same line in negotiations on a trade deal with India. Services have been left for a future second stage.

The process to put in place EPAs by end-2007 began after the WTO ruled against the longstanding agreement governing the EU’s trade with the 79-member ACP group (mostly former European colonies). If a country is not signed up to an EPA by the deadline then the EU will apply the Generalised System of Preferences (GSPs) and its less generous tariff rates.

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One Response to “EU trade agreements – gambling with livelihoods in the developing world?”

  1. Andrew Okola Says:

    There is a lot of potential to really make a positive difference to The Caribbean’s vulnerability and its economic prospects, and there is still time to do so. It is with this in mind that I take this opportunity to urge all members and friends of the region to use our collective will to impress upon our Regional Leaders not to sign the present deals being offered under the Economic Partnership Agreement (EPA) with the European Union (EU), on 30th June, 2008 as to do so is to commit the Region’s economy to a catastrophic future.

    The analysis carried out by Oxfam entitled, “Partnership or Power Play?’ has indicated that unless the deal is overhauled this agreement will do irrevocable damage to the development prospects of some of the poorest and most vulnerable countries in the world including those of the Caribbean. These deals have strayed from the development template they were suppose to follow and it is now in the best interest of the Caribbean and other members of the ACP to hold out for a better deal.

    The cost to these already over-burden countries will be enormous: annual losses from tariff, the loss of independent trade policy and very limited scope to retain any protection highlights the pending cataclysmic consequences of signing-on to EPA in its present form.

    The analysis highlighted further weakness in the offer as follows:

    o The deals create significant barriers to integration between existing regional partner countries and in several instances fragment existing regional bloc.

    o The offer fails to tackle food insecurity, though allowing some amount of protection. However, the weak safeguards in the deals unnecessarily exposed our small-scale farmers to sudden surge in competition from imports which have the effect of undermining our staple food market.

    o The deals only make it slightly easier for the Caribbean and other ACP countries to export to Europe. In return, these countries are required to dramatically open their markets to imports from Europe. Nevertheless, Europe is set to open up to other developing countries which would make the immediate gains temporary.

    o The Offer fails to support innovation as stricter intellectual property rules undermine access to knowledge and there exist a toothless commitment to technology transfer.

    o The deals tie the hands of the Caribbean and other ACP government to make it harder to manage investment in the Public’s Interest.

    o The deals severely constrain effective regulation and threaten universal access to vital services.

    Ministers, MPs, trade, and development experts and academics from all over especially from within the African, Caribbean and Pacific region have all questioned the current approach.

    The EPA negotiations started six years ago and involved 76 countries from the ACP region which includes the Caribbean, as at December 2007 only a mere 35 countries initialled the document let alone signed-on to it.

    The spirit in which the initial discussions on EPA were conducted must be fully reflected in the deals presently on the table for consideration. If we accept that we should be masters of our own destiny then we will equally have to accept that the world owes us no obligations.

    Notwithstanding, in a fair world and in a fair deal, Europe would fully open its markets to all exports without demanding reciprocation. It would give developing countries the policy freedom to govern in the public interest and pursue regional integration on their own terms. And it would assist these countries to become more competitive, generate decent jobs and access new technologies. However, rather than reflecting the development needs of the Caribbean and other ACP countries, the texts tend to reflect negotiating capacity and EU interests.

    With the rapid growth of emerging markets as a source of investment and trade it is an inopportune time to lock the region into a bad deal with Europe.

    What is urgently required before the Region’s Leaders signs EPA are listed but not limited to the following:

    • A thorough independent evaluation of what has been initialled.

    • Adaptation of existing EU preference schemes to ensure that the Caribbean is not left worse off if it doesn’t conclude an EPA.

    • Renegotiation of problematic aspects of the initialled deals.

    • Full consultation with all affected parties including workers, producers and businesses.

    • Vigorous engagement by parliaments to allow for full scrutiny of the deals.

    In the course of negotiation we can accept that well-intentioned deals may be badly designed, let us now take a fresh look at these deals as we cannot afford for our leaders to get this wrong.

    Please sign and forward this petition now, as time is not on our side.

    The above petition can be signed at http://www.ipetitions.com/petition/jamaicaepa

    Feel free to contact me at andrew@okola.co.uk.

    Andrew O’Kola

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