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TRADE: Civil Society Ensuring Development Stays on EPA Agenda

Isolda Agazzi

GENEVA, Feb 15 2011 (IPS) - In an unusual move, West and Central African civil society organisations have participated in the negotiations between their countries and the European Union on the economic partnership agreements (EPAs). The organisations stress developmental concerns while assisting under-resourced African governments with trade expertise.

Civil society organisations (CSOs) have also taken to the streets to persuade governments not to sign interim EPAs, for example in Mali.

Cameroon’s initialling of an interim EPA in 2009 demanded a change in strategy: “This setback altered the course of the negotiations in the region. After that, we moved from advocacy to providing expertise to governments,” says Jacob Kotchao, CSO representative of the EPA negotiating team for Central Africa.

The EPAs are comprehensive trade liberalisation agreements which have been under negotiation since 2003 between the European Union (EU) and the African, Caribbean and Pacific (ACP) countries to replace the preferential regime of the Cotonou agreement.

The ostensible reason for the renegotiation of the trade regime between the EU and the ACP is its incompatibility with the rules of the World Trade Organisation (WTO). The EPAs came under discussion at a roundtable at the World Social Forum in Dakar, Senegal, which ran from Feb 6-11.

The EPAs should have been concluded by 2007 but only one complete agreement – with the Caribbean — has been signed to date. Controversially, Cameroon signed an interim EPA in Central Africa, with Côte d’Ivoire and Ghana doing the same in West Africa.

For Silke Trommer of the University of Helsinki, who studies what she calls “participative commercial governance”, civil society has been crucial in stressing the developmental aspect of the EPAs and sensitising public opinion to its social component.

“In Aug 2004, when the trade ministers of ECOWAS (Economic Community of West African States) allowed representatives of civil society and the private sector to take part in the negotiations, officials were not very enthusiastic,” she explains.

“But, over time, CSOs have proved to be a source of reliable, flexible and independent expertise while being able to speak on issues officials cannot afford to. Since then, African governments have been happy with them on board.”

Noticeably, this concession is not applied the other way round: CSOs do not assist the European side at the negotiations.

On paper, EPAs should have both a commercial and a developmental component, but the reality is different. CSOs “discovered” that, according to WTO rules, Africa should only be required to cut tariffs by 60 percent and not 80 percent, as insisted upon by the EU.

The EU has stuck to its position, which forced an African compromise offer of 71 percent but, for the EU, the cut is still too slight.

Regarding the developmental component, many sticking points continue to block the negotiations.

One big issue is the compensation for revenue losses resulting from tariff decreases: “For Central African countries, tariffs are not only an instrument of commercial defence but also an important source of revenue,” Kotchao explains. “In some countries, revenue from duties represents 25 to 40 percent of state income.”

Another open question is the strengthening of African states’ productive capacities.

“Even though the EU allows ACP countries to export to the European market under a preferential trade regime – duty-free and quota-free for least developed countries — our exports have not increased and we keep selling unprocessed commodities,” Kotchao points out.

“The EPAs would not bring more opportunities if our countries do not develop real productive capacities.”

Central African countries have identified programmes to strengthen these capacities in agriculture and manufacture, but there is no consensus on how to best support them.

Cheikh Tidiane Dieye, CSO representative of the West African negotiating team, disagrees strongly with European negotiators that “keep saying that ‘the more you liberalise, the more you create growth and development’. Nothing could be further from the truth.

“This point has nothing to do with ideology. West African countries have either almost no industry, or only an embryonic industry; and a very weak agricultural sector. The rhythm and timing of trade liberalisation need to be carefully sequenced.”

Another point of divergence is the most favoured nation clause (MFN) that the EU has wanted to include in the agreement since 2007. If accepted, it would oblige African states to automatically allow the Union the same advantages given to African trading partners such as China, India, Indonesia, Brazil or Saudi Arabia, whether these are developing states or not.

Dieye analyses the European position as follows: “In 1970, trade between Europe and West Africa represented 70 percent of the region’s trade. Today, it amounts to 32 percent, maximum, while trade with the rest of the world has increased at a fast rate – 10 percent per year with Asia.

“In 2007, the president of Senegal stated that the commercial partnership with Europe had failed. In November 2010, Libyan president Muammar al- Gaddafi said the same. Europe tries to get the same privileges Africa gives to other major trading partners, but the system it proposes is unacceptable.

“We will remain a provider of commodities and an importer of manufactured goods. So we do not see how the agreement could be signed,” Dieye argues.

He further explains that the juridical argument to refuse the MFN clause is the enabling WTO clause that allows developing countries to give one another advantages they do not give to industrialised ones. At the WTO, African countries can liberalise markets for Brazil or China without doing the same for the EU.

Kotchao’s conclusion is: “There is a commercial war between the EU and emerging countries about our markets. One can seriously wonder whether we should continue the EPA negotiations”.