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DAKAR, Jul 20 2010 (IPS) - Since 2002, African countries have been negotiating with the European Union (EU) a new framework of cooperation called Economic Partnership Agreements (EPAs). These are supposed to replace the Cotonou Agreement, which is the current basis of the relationships between African, Caribbean, and Pacific (ACP) countries and the EU. However, instead of negotiating with the ACP countries as a group, as had been the case in all previous agreements, the EU decided that the EPAs would be negotiated with each of the three regions of the ACP group individually.

In Africa, the EU went even further and imposed negotiations with the sub-regions of the continent. Initially, the European Commission (EC) had set December 2007 as a deadline for the signature of the EPAs with African countries, but all African heads of state rejected it.

In the different regions, some countries had signed what the EC called “interim EPAs”, mostly on trade in goods. So far, not a single African region has signed a full partnership agreement. However, civil society organisations (CSOs) as well as some intergovernmental organisations, such as the South Centre, are questioning the legality of these interim EPAs under the World Trade Organisation (WTO) law.

The EC had pinned its hopes on the East African Community (EAC) – Burundi, Kenya, Rwanda, Tanzania, and Uganda- which had given indications that it might sign before the end of June 2010. However, under pressure from civil society organisations and public opinion, EAC leaders backtracked at the last minute and the signing was postponed.

In Central Africa, Cameroon had initialled the interim EPA in 2007 and signed it in January 2009. However, its implementation has been postponed twice. Recently, the sub-region has expressed its willingness to continue the negotiations with the view to reaching a full EPA. But in the other sub-regions, there is still a big gap between both parties.

Southern Africa initialled the interim EPA at the end of 2007. Since then, Botswana, Lesotho, and Swaziland have accepted to sign interim EPAs but have not implemented them. This leaves other countries of the sub-region under pressure from the EC. This is especially the case for Namibia, which is the most vocal opponent of signing. Recently, Southern African countries have pledged to sign a much scaled-down EPA before the end of 2010. The announcement was issued following concessions made by both parties in an attempt to bridge the gap between them.

In West Africa, Cote d’Ivoire and Ghana initialled the interim EPA but all other countries there, including Nigeria, refused. In November 2008, Cote d’Ivoire went a step further by signing an interim EPA. Negotiations have been going on at the sub-regional level. However, the Cote d’Ivoire interim EPA has obviously weakened the negotiating position of the sub-region.

The sub-regional roundup shows that two and half years after the December 2007 deadline, the EC has not been able to convince African countries that the EPAs are “beneficial” to them. African countries and the EU have divergent positions on such issues as the content of the EPAs, the level of compensation for fiscal losses, the scope of trade liberalisation in goods, the Most Favoured Nation (MFN) clause, liberalisation of the services sector, export taxation, the period of transition to full liberalisation, etc.

For African countries, the EPAs should be development-oriented whereas the EC seems to focus on trade and financial liberalisation. In the African view, a development-oriented agreement should have the following objectives: 1) develop domestic productive capacities; 2) remove supply bottlenecks; 3) contribute to export diversification; and 4) strengthen regional integration.

But the EC seems more interested in opening up African markets to European goods and services and securing guaranties for European investments. Moreover, the EC is insisting that African countries liberalise their services so that European multinationals might be in a position to control a big chunk of that market.

Regarding specific issues associated with the implementation of the EPAs, African countries have raised the issue of financial compensation for fiscal losses that would result from trade liberalisation. For many developing countries, especially in Africa, import taxes constitute a big part of fiscal revenues. For instance, it is projected that by 2015 Senegal would lose more than 175 million euros. Yet, the vague promises made by the EC are not reassuring.

The EC is pressuring African countries to open up their services markets to European multinationals. However, all African sub-regions have so far rejected this demand and want the negotiations to focus only on trade in goods. In view of this fierce opposition, the EC has agreed to postpone discussions on this issue until later.

African countries are demanding a longer transition period during which asymmetrical trade would be in place, while the EU is calling for a shorter period, except for the so-called “least developed countries” (LDCs).

The MFN clause is another contentious issue. The EC is insisting that African countries grant the EU MFN status, whereas African countries see this as limiting their freedom in their relations with other Southern countries, especially China. The EC wants to have European countries granted the same privileges as would be granted to China or any other “emerging” country. African countries have resisted this demand and made it clear that their relations with these countries should be seen as part of South-South relations.

The current economic and financial crisis has exposed the utter failure of the neoliberal system and discredited the IMF, the World Bank, and the WTO, which have been among the most vocal promoters of market fundamentalism. The crisis reflects the structural flaws of “free trade” policies and unregulated capital flows and should therefore be interpreted by African policy makers as a warning sign of what is in store for their countries if they enter into a “free trade” agreement with the EU. (END/COPYRIGHT IPS)

(*) Demba Moussa Dembele is Director of the African Forum on Alternatives (Dakar).

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