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TRADE-AFRICA: The EPAs – About Development or Exploitation?

Analysis by Sue Scott

LONDON, Nov 1 2007 (IPS) - Europe’s paternal trading relationship with African states threatens to end in an almighty family fall-out if they fail to sign the economic partnership agreements (EPAs) by the end-of-year deadline.

European Union trade commissioner Peter Mandelson went on the offensive this week, accusing non-governmental organizations of ‘‘ignorance or prejudice’’ in ‘‘wholly misrepresenting’’ the aims of the deals.

The EPAs, he argues, are desperately needed by African, Caribbean and Pacific (ACP) countries to move out of poverty. So what is there not to like?

Aggressively promoted by Europe as necessary to meet its commitments under World Trade Organisation (WTO) rules, but attacked by critics as a Trojan horse that could wreck Africa’s economic progress and do little for its political self-determination, the EPAs are likely to remain a bone of contention way beyond the January 1, 2008 deadline.

No one disputes that the preferential trade arrangements historically enjoyed by Europe’s former colonies are in need of reform. But it is contested whether reciprocal trade agreements in the form of EPAs will be an improvement.

The delays in the EPA talks have to a large extent been blamed on the EU’s inclusion of the so-called ‘‘Singapore issues’’. A far-reaching set of institutional reforms that Europe linked to market liberalisation, they were first introduced into trade negotiations by rich nations at the WTO meeting in Singapore in 1996.

The ‘‘Singapore issues’’ are ‘‘new generation’’ or behind-the-border regulatory reforms that address the areas of investment protection, competition policy, government procurement and trade facilitation. Developing states managed to get them off the WTO agenda, only to find them reintroduced in the bilateral EPAs.

While the EU has since agreed that concluding the ‘‘trade in goods’’ section of the EPAs by the year-end deadline would be sufficient, the ‘‘Singapore issues’’ will remain on the table for conclusion later on.

They involve a raft of provisions, the implications of which may not be fully appreciated by many African countries, says Dr Sanoussi Bilal, co-ordinator of the European trade co-operation programme for the European Centre for Development Policy Management (ECDPM). He was an observer during recent EPA negotiations.

Bilal has deep reservations about the pace and extent of the EPAs, which, he says are in danger of being passed by default. Even of central Africa, the region closest to concluding the deal, he remarks: ‘‘I don’t know if they understand what they are signing.’’

ECDPM is just one of a number of non-government organizations (NGOs) concerned that EPAs are a ‘‘blank cheque’’ for European business to profit from African economies without guaranteeing ‘‘a positive balance sheet for development’’ in return. Bilal says even signing a goods-only trade agreement at this stage may be leaving some African countries hostage to fortune.

In particular, NGOs highlight concerns over the transfer of intellectual property rights, foreign direct investment (FDI) in service sectors such as banking, transport, communication and energy markets, and the liberalization of government procurement procedures, a bête noir for Europe, often accused of being a cloak for corruption.

While the main plank of the EU argument is that economies outside of the ACP are growing at a faster rate than those within the group because they are more attractive to foreign investors, NGOs counter that FDI can bring costs as well as benefits.

Indeed, some elements of the EPAs are prescriptive enough to restrict African countries’ ability to strike strategic deals. Opponents talk of a ‘‘loss of policy space’’, which may limit pursuit of development objectives outside of the EPA regime.

Some are as critical of opportunities missed as much as liberties taken, particularly in the fraught legal area of intellectual property rights, arguing that potentially positive measures around intellectual prpoerty rights are absent from the EPAs.

These include the transfer of technology, joint ventures, prevention of biopiracy and misappropriation of traditional knowledge by EU companies.

But that involves a level of detail way beyond the capacity of many of the resource-restrained African negotiators to fully engage with, says Dr Mareike Meyn, research officer in the international economic development group at the Overseas Development Institute, based in London.

‘‘When it comes to competition policy, for example, some countries have not even drafted a competition bill, let alone implemented it, so committing them to build up a regional competition authority (as foreseen in some EC drafts) is very difficult. There are fears among African policymakers that they are not able to make those commitments.’’

Bottom-up, bespoke documents are needed take into account African states’ different levels of economic development, rather than a top-down template for reform, says Meyn.

‘‘In the case of east Africa and southern Africa, we have 15 highly heterogeneous countries. Some of them are economically integrated at the sub-regional level but for most economic integration is in its infancy. Plus, some are in a conflict or post-conflict situation.

‘‘If the EU is interested in promoting economic development with EPAs, they should take countries’ different development levels into account and not overextend them.

‘‘It doesn’t make sense to include issues that a partner fundamentally objects to and yet argue it is development friendly,’’ Meyn argues.

Bilal agrees. ‘‘Why can’t we have separate templates for each country? The EU Commission will say ‘we do not impose anything’, but the reality is even when the regional negotiators are good, at a national level they do not follow what’s happening and, at the end of the day, those agreements are going to be signed at a regional level.’’

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