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TRADE: Barroso’s EPA Intervention to Be ”More Than Symbolic”

David Cronin

BRUSSELS, Jan 31 2008 (IPS) - Conscious that trade issues had become a major source of friction between African countries and their former colonial overlords, the European Commission President José Manuel Barroso extended an olive branch in December.

During a summit meeting of African and European Union leaders in Lisbon, Portugal, Barroso promised that there would be an opportunity to revise provisions in the economic partnership agreements (EPAs) signed between the two sides over the past few months.

While Peter Mandelson, trade commissioner of the European Union (EU), had been tasked with responsibility for overseeing the EPA negotiations, Barroso indicated that he personally would take a more hands-on approach to them this year, by convening top-level discussions.

This followed a barrage of accusations that Mandelson had resorted to heavy-handed tactics during the negotiations, in particular by threatening to impose punitive taxes on some African exports to Europe if the EPAs were not concluded by the end of 2007.

‘‘The president has committed to personally intervene,’’ a European Commission insider, speaking on condition of anonymity, told IPS. ‘‘There are no dates yet. The feeling is that it’s a bit like a silver bullet, you can only fire it once, so you have to choose the right moment.’’

The source also suggested that Barroso’s contribution ‘‘should be more than symbolic’’ and should be designed to remove obstacles to the successful conclusion of long-term trade deals.

Thirty-five EPAs have been reached with the nearly 80 African, Caribbean and Pacific (ACP) countries negotiating with the Commission. But most of these have been labelled ‘‘interim agreements’’ and are mainly limited to trade in goods.

Talks aimed at extending them to the liberalisation of services and rules on investment, intellectual property and public procurement are set to continue.

In the end, Mandelson’s threat to increase the tariffs levied on exports of African goods to Europe were not carried out. This was largely because 32 of the governments that declined to sign EPAs are officially recognised as least developed countries and are eligible for a scheme called Everything But Arms that allows their goods enter the EU’s markets free of charge.

Better-off African countries that refused to sign have generally escaped ‘‘punishment’’, too. In the case of Nigeria, for example, this has been because it is the world’s fifth-largest producer of oil. Exports of oil were not at risk of higher tariffs in cases where no EPA was signed.

Despite the lack of disruption in trade, political and diplomatic figures in both Europe and Africa admit that much harm has been done to the relationship between the two continents.

‘‘The last few weeks of 2007 were very painful,’’ said Mauritius’s ambassador to the EU, Satiawan Gunessee, adding that the European side ‘‘has created a lot of strain and mistrust in the process’’.

While a far-reaching EPA has been agreed between the EU and 15 Caribbean countries, he warned that pressure must not be placed on African governments to sign a similar one. The Caribbean deal covers issues relating to investment and services liberalisation that many African countries have sought to exclude from the scope of the EPA talks.

Glenys Kinnock, a Welsh Socialist member of the European Parliament (MEP), said the negotiations have created ‘‘terrible acrimony’’ between Europe and the ACP bloc.

Her MEP colleague, Vitorrio Agnoletto from Italy, noted that while the EU had been dealing with a number of regional configurations in Africa, it decided to pursue agreements with individual countries towards the end of last year. In West Africa, for example, agreements were reached only with Ghana and the Ivory Coast.

‘‘The Commission has been able to apply the notion of divide and conquer,’’ said Agnoletto. ‘‘I think this is the logic the European Commission will continue to follow.’’

Paul Goodison from the European Research Office, which monitors Europe’s economic policies, urged African politicians to remain vigilant in the coming months.

He voiced concern about efforts being made by the Commission to prevent Southern African countries from using export taxes, which are designed to ensure that raw materials are processed at home. In Namibia’s beef sector, he noted, such taxes have helped bring a greater level of sophistication.

Whereas live cattle used to be exported ‘‘on the hoof’’ to neighbouring South Africa, it has used fiscal measures to ensure that animals are slaughtered first and to build up a meat-packing and leather industry. ‘‘Thousands of new jobs have been created,’’ Goodison said.

‘‘But the Namibians fear their ability to use export tax measures will be compromised because of provisions in the EPA.’’

In all of the ‘‘interim’’ EPAs, African countries have given a commitment to eliminate tariffs they impose on goods from Europe.

Oxfam spokesperson Luis Morago said that concerns remain that these agreements will lead to a substantial loss in the government revenues accrued through tariffs, as well as a loss of jobs and of room for manoeuvre in being able to adopt policies that will ensure African countries’ social and economic development.

‘‘President Barroso has made an offer of a high-level EU-Africa meeting to bring the regional element of the EPAs back on track,’’ Morago added. ‘‘We are asking that this opportunity be used now there is less pressure of time. The right amount of flexibility could allow African countries to pursue regional integration and put development at the centre of the process.’’