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TRADE-MALAWI: ”If EPAs Are So Good, Why Force Us to Sign?”

Pilirani Semu-Banda

LILONGWE, Apr 23 2008 (IPS) - While the European Union (EU) has wanted a conclusion to the economic partnership agreements (EPAs) as soon as possible, the Malawian government has been staving off a deal.

The deadline for EPAs at the end of last year passed without Malawi signing – in contrast to other African states such as Ghana, Cote d’Ivoire and the members of the Southern African Customs Union, excluding South Africa.

The Malawi government indicated that it was taking its time considering the implications of the EPAs, for fear of getting bound to an agreement that might not be good for the nation. The EPAs are deals aimed at liberalising trade between the EU and African, Caribbean and Pacific (ACP) countries.

Secretary for Trade Newby Kumwembe told IPS last month that Malawi does not want to rush into signing an agreement without exhausting all channels of consultation within the government hierarchy.

‘‘The EPA is not a temporary agreement. This is something that Malawi is going to live with for a very long time. We cannot therefore rush to make a decision that might make us have regrets at a later stage,’’ cautioned Kumwembe.

For such ‘‘an important trade agreement’’, the trade ministry, which has been directly involved in the trade negotiations, needs to go through all its bureaucratic channels which meant consulting the whole state machinery.

Kumwembe mentioned the country’s foreign affairs ministry and the cabinet as some of the important groups that have to scrutinise and recommend on whether the country should sign an EPA or not.

‘‘You don’t negotiate for a raw deal. We want to sign an agreement that has no loopholes and that’s why we want to have conclusive consultations,’’ added Kumwembe.

Malawi government consultations can take ‘‘very long’’ and no timeframe has been set for a decision to be made. ‘‘It may take some time before we, as a country, know for sure what we’re going to do on the EPA,’’ said Kumwembe.

At the beginning of this month Malawi’s President Bingu wa Mutharika said at a press conference that he will not allow Malawi to sign the EPA because it will not benefit Malawians. Instead, it is expected to be harmful to the country.

Mutharika went as far as to accuse the EU of ‘‘imperialism’’.

He was critical of the EU’s stance that EPA signatories will be assisted with money from the European Development Fund (EDF).

‘‘This is imperialism by the EU which we must fight against because the EDF funding has nothing to do with EPA conditionalities. They are doing this in order to punish those that who are not signing their agreements. Now, if the agreement is so good, why do they have to force people to sign?’’ asked Mutharika.

The government’s decision could mean that it is bowing to the pressure mounted by 10 of the country’s most influential non-governmental (NGOs). They have been protesting against the signing of the EPA in its current form since early last year.

In April 2007 five civil society organisations wrote to EU president Angela Merkel, arguing that the EPAs will prevent Malawi and other poor countries to protect their domestic industries with tariffs and other means.

The Malawi Economic Justice Network (MEJN), consisting of NGOs advocating economic justice, is one of the organisations that have been against the signing of the EPAs.

MEJN executive director Andrew Kumbatira told IPS that, ‘‘the government should not sign this trade agreement in its current form. Critical issues of development and supply side constraints have not been addressed to Malawi’s satisfaction’’.

He said Malawi would need a capital injection of up to 5.7 billion euros to counter the supply-side constraints and other adjustment costs if it were to benefit from the proposed EPA trading framework.

‘‘But there are no clear agreements in the current form of the EPA on how these resources will be made available to us,’’ said Kumbatira.

Without the resources, Malawi would be fully exposed to the shocks that take place in the commodities markets from time to time.

Kumbatira also said the EU wants to tie Malawians into an agreement that reduces the country’s policy space to consider other and more profitable economic agreements with other regions.

‘‘Asia is an upcoming major economic power which might potentially be a better alternative for Malawi,’’ said Kumbatira. He was worried that Malawi was being asked, under the EPAs, to liberalise 80 percent of all its trade with the EU.

‘‘This means that the Malawian market will be put in direct competition with the European market. This will be very unfair for our small country as we are just an emerging economy. The EPAs could easily destroy the great potential to grow we have.’’

Interestingly, Malawi’s parliamentary committee on trade had already approved the signing of the interim EPA on trade in goods. The temporary deal is aimed at averting disruption of trade between African countries and the EU, following the expiry of the Cotonou Agreement at the end of last year.

The signing of the EPAs was initially slated for the end of last year but ministers from the Eastern and Southern Africa (ESA) region, of which Malawi is part, said at the ESA-European Commission ministerial negotiating meeting in Brussels in November last year that it was not practical to do so.

Kumbatira said at the Brussels meeting African leaders called for more work in the negotiations until they can be reviewed.

‘‘Through the African Union, African leaders underlined the importance of trade and development cooperation to the partnership they share with the EU.

‘‘They stated that now more than ever, Africa needs economic partnerships that will see its people grow in economic power, and living standards commensurate to their dignity as human beings,’’ said Kumbatira.

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