Adolf Ozor, a tomato farmer in the Greater Accra Region of Ghana, is struggling to make ends meet after import surges. Credit: Daan Bauwens/IPS

By Daan Bauwens
BRUSSELS, Nov 27 2017 (IPS)

In the run-up to the fifth EU-Africa summit in Côte d’Ivoire, the future of the Economic Partnership Agreements (EPAs) between Europe and its former colonies looks bleaker than ever. While most of Europe’s trade partners around the world keep refusing to sign the deals, the African Union’s Commissioner for Trade will most likely announce a moratorium on all EPAs.

Ever since independence, Europe’s former colonies have enjoyed preferential (duty-free) access to the European market. In turn they didn’t need to open their own markets. When in 2000 the World Trade Organization deemed this one-sided market opening unlawful, Europe and 79 countries in Africa, the Caribbean and the Pacific (ACP) started negotiating reciprocal trade deals."Trade between neighbors is now more difficult than trade with the EU. We are creating borders within Africa." --Gunther Nooke

The resulting deals, coined Economic Partnership Agreements or EPAs, are not pure free trade deals. Under the agreements, ACP countries are allowed to keep protecting 20 percent of their products – mostly agricultural products – with import tariffs. The other 80 percent will be liberalized gradually over the course of 20 years after the signing and ratification of the deal. The deals were negotiated between the European Commission and seven regions of several countries engaged in economic integration processes.

Stalling the implementation

Seventeen years later only two of the seven negotiated deals have been signed, ratified and implemented, one with the South African Development Community (Botswana, Lesotho, Namibia, South Africa and Swaziland) and one with the Caribbean. The EPA with West Africa is currently blocked by Nigeria, Gambia and Mauritania who refuse to sign, while in the East African region, last year Tanzania sued Kenya for signing while Uganda wants to address more concerns – President Museveni travelled to Brussels on a three-day work visit at the end of September for talks.

Almost all ACP countries fear the possible negative impact of the EPAs on their economies and therefore stall its implementation. “They already had the right to export to Europe duty-free,” said Joyce Naar, a lawyer and activist with the ACP Civil Society Forum. “Now they are expected to open up their markets to Europe without getting anything back.”

Especially in Africa, governments and analysts fear an encore of the tomato and chicken scenario. In Ghana, for instance, after IMF and World Bank-enforced tariff reductions, import surges caused the market share for domestic chicken to fall from 100 percent to a mere three percent today in less than three decades. The chicken industry, once the second largest employer in the country, has now been taken over by competing imports from Canada, Brazil, Europe and China.

As for tomatoes, after lowering tariffs Ghana became the second largest importer of tomatoes in the world and according to FAO data, market share for domestic produce dwindled from 92 to 57 percent in only five years.

Industrialization at risk

Aside from agricultural produce, NGOs also fear that entire industrialization of the continent is at risk. At a recent international trade union conference on the issue of EPAs in Togo, this point was repeatedly made. “To industrialize, we need to protect and develop the internal market until we’re ready for international competition, as has been demonstrated by China,” says Georgios Altintzis of he International Trade Union Confederation (ETUC).

At the conference, Mariama Williams, senior program officer at the South Center in Geneva, also stressed that increased competition would lead to increasing feminization of work.

“Women do the worst jobs in the worst conditions,” she stated at the conference. According to Williams, EPAs will have the greatest impact on labour-intensive industries where women are disproportionately employed. An increase of competition would raise the pressure on these sectors while the internal standards and labour conditions remain unchanged.

“Diabolic” agreements or success story?

“There has always been a diabolic whiff about EPAs,” former EPA chief negotiator Sandra Gallina said a few weeks ago at a meeting of trade ministers from all ACP countries in Brussels. “There is nothing diabolic about them, they were just extremely badly communicated. For the last five years I have been fighting a misinformation campaign.”

On the first day of the Brussels meeting, the European Commission published numbers on its website meant to illustrate the benefits of EPAs. In 2012 an agreement entered into force between Madagascar and the EU. By 2016, exports to the EU had risen by 65 percent. The same for South Africa, which signed an agreement one year ago. The last year, exports of processed fish increased by 16 percent and flowers by 20 percent.

According to Marc Maes, trade policy officer at the Flemish North South Movement 11.11.11, the figures should be taken with a grain of salt. “Madagascar is recovering from a period of total chaos,” he said. “Do these numbers show the influence of the EPA or mere economic recovery? In the case of South Africa, the mentioned period consists of just one year. It’s a bit premature to talk about a steady, reliable impact.”

Migration crisis

The criticism isn’t limited to the content of the agreements. The way in which the European Commission concludes them is also widely condemned. As agreements with entire regions are stalled, the Commission now makes agreements with individual states. Ghana and Côte d’Ivoire signed and ratified such interim EPAs a year ago, fearing they would lose preferential access to the European market.

“That’s crazy,” says Gunther Nooke, personal representative in Africa of German Chancellor Angela Merkel and one of the staunchest critics of the EPAs. “Trade between neighbors is now more difficult than trade with the EU. We are creating borders within Africa. ”

According to Nooke, in the midst of a migration crisis the only things that benefits Europe and Africa is more employment in Africa. “This can only be done by protecting the entire African market with the creation of an African Customs Union led by the African Union. African products can be made here and be freely traded across the continent without having to compete with European goods. But now, because of differences in opinion about EPAs, African countries aren’t making any progress in forming a customs union.”

Moratorium

According to Merkel’s envoy, the African Union Commissioner for Trade has already announced that he will call for a moratorium on all EPAs. “And we must respect that,” says the advisor.

Germany is in the perfect position to make its opinion be heard. The country delivers the greatest contribution to the European Development Budget: just over 6.2 billion euros in the period 2014-2020, accounting for 20.6 percent of the total. It is doubtful whether Berlin and Brussels will be able to voice their opinions in unison at the Nov. 28-29 EU-Africa Summit in Abidjan.

By Demba Moussa Dembele
DAKAR, Aug 29 2014 (IPS)

A few years ago, nobody could have imagined that some 50 Heads of States and Prime Ministers from Africa would meet the President of the United States for a summit. Yet, the first Africa/United States Summit took place in Washington from August 4 to 6, making headlines around the world.

It is obvious that geopolitical considerations were behind this summit, with the shadow of the BRICS (Brazil, Russia, India, China and South Africa) hanging over the meeting.

Demba Moussa Dembele

The United States would have never organised such a summit if the global balance of power had not been gradually shifting towards emerging powers, notably towards China and the BRICS.

Western economic domination is being eroded, as illustrated by the deepening crisis of the Eurozone and the worsening deficits of the United States. Meanwhile, the BRICS are increasing their economic and financial weight in the world economy, and represent about 20 percent of the world’s GDP and 17 percent of world trade, with China now the second economy behind the United States.

For most observers, the BRICS Summit in Fortaleza and Brasilia (Brazil) in mid-July heralds a new world monetary and financial order in the next decades or so. Observers from the South and the West are predicting the gradual shift to a new balance of monetary and financial order, with the BRICS at the centre.“Growing China-Africa ties are a disturbing development for Western countries, the European Union (EU) and the United States. They view these relations as a threat to their “traditional” neo-colonial relationships with Africa”

Indeed, the decision to set up the BRICS bank and the Contingency Reserve Arrangement (CRA) is seen as a serious challenge to the World Bank and the International Monetary Fund (IMF), which have been the tools of Western countries for more than half a century. They will gradually become more and more irrelevant to developing countries, as these increasingly turn to BRICS’ financial institutions.

On the other hand, China and the other members of the BRICS group are challenging the hegemony of the U.S. dollar through several swap arrangements, aimed at boosting their trade by using their own currencies. One of the most significant arrangements is the swap between China and Russia, when one takes into account the 400 billion dollars gas deal signed between Russia’s Gazprom and the China National Petroleum Corp. (CNPC).

The French online newspaper, Mediapart (July 5, 2014), reported that in the oil and gas sector, the top three investors in 2013 were all from the BRICS – PetroChina (50.2 billion dollars), Gazprom (44.5 billion dollars) and Petrobras (41.5 billion dollars). The first Western company was Total, which ranked seventh with 30.8 billion dollars.

It is obvious that these developments are of great concern to the United States, especially in light of the BRICS’ drive to strengthen their economic and financial relations with Africa and South America.

In a 2013 report, the United Nations Economic Commission for Africa (UNECA) indicated that Africa’s trade with the BRICS had doubled since 2007 to 340 billion dollars in 2012. It projected that the trade would reach 500 billion dollars by 2015.

Trade between China and Africa is estimated at about 200 billion dollars in 2013. It has become Africa’s main trading partner. And most African countries are now turning to China for loans while Chinese companies are involved in building roads, bridges, and other infrastructures across Africa.

Growing China-Africa ties are a disturbing development for Western countries, the European Union (EU) and the United States. They view these relations as a threat to their “traditional”, neo-colonial relationships with Africa.

While the European Union has tried to lock African countries into Economic Partnership Agreements (EPAs) – as part of a scheme to create a free trade area (FTA) between the European Union and the African, Caribbean and Pacific (ACP) group of countries – since 2007, the United States seems to be “wakening up” only now to the reality of the fast-changing economic landscape in Africa.

A Paris-based magazine, Jeune Afrique, wrote that with this Summit, Barack Obama was organising a “catch-up meeting”. The reason, said the magazine, was that the United States has lost too much ground to China and to a lesser degree to Europe. It is estimated that trade between Africa and the United States doubled between 2000 and 2010, while trade between Africa and China increased twenty-fold over the same period!

Most observers believe that without China building strong and growing economic and financial ties with Africa, the United States would not have thought about organising such a Summit. Clearly, China’s role in Africa has given a greater “respectability” to the continent and elevated its standing with Western countries, which are now looking at Africa through a new light.

Catching up for will not be an easy exercise for the United States. For one thing, its imports from Africa are essentially composed of crude oil, which accounts for 91 percent of total trade. Second, in its relations with Africa, security concerns have always topped the U.S. agenda.

This is why during the George W. Bush Administration, the United States set up “Africa Command” (AFRICOM) with the view to “helping” African countries fight “terrorism”. And the aim is to move AFRICOM headquarters – now in Germany – to Africa, preferably in the Gulf of Guinea, which is home to the bulk of African oil reserves. U.S. companies, like Chevron and ExxonMobil, have already invested billions of dollars in the area in order to control huge chunks of those reserves.

At the end of the Africa-U.S. Summit, Obama announced that 33 billion dollars will be invested in Africa between 2014 and 2017. But only seven billion dollars will come from public funds in order to boost trade between the United States and Africa, 14 billion dollars will come from the private banking and construction sectors, while 12 billion dollars are part of the “Power Africa” project aimed at bringing electricity to households and the industrial sector. This programme is financed by the World Bank and U.S. private companies such as General Electric.

So, the 33 billion dollars announcement is not really a “gift” made by president Barack Obama to African leaders, as some newspapers erroneously presented it. It will essentially serve the interests of U.S. private companies in their drive to compete against BRICS and European companies in Africa.

But, beyond “catching up” with China and the European Union, the Africa-U.S. Summit should be viewed in the context of the discourse on “Africa Rising”. Indeed, for neoliberal ideologues, Africa seems to hold the solution to the crisis of global capitalism.

In January 2014, Japanese Prime Minister Shinzo Abe toured Africa. In a speech at the headquarters of the African Union, in Addis Ababa, he was quoting as saying that “with its immense resources, Africa is holding the hopes of the world.” This was an echo to a report by the French Senate, released in December 2013, with the incredible title ‘Africa is our Future’.

This may explain French military adventures in Africa over the last several years, from Cote d’Ivoire to Libya, from Mali to the Central African Republic, among others.

Several forums are being organised to advise Western corporations to invest in Africa and tap into its resources. Apparently, Africa has become the “new frontier” of global capitalism, at the expense of its own people. As the renowned Egyptian economist Samir Amin used to say: “the West cares about Africa’s resources, not about its people.” (END/IPS COLUMNIST SERVICE)

(Edited by Phil Harris)

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