19. Memorandum submitted by Action for
Southern Africa (ACTSA)
1. Action for Southern Africa (ACTSA) is
the successor organisation in the UK to the Anti-Apartheid Movement.
It is a democratic, membership-based organisations representing
over 2,500 individual members, as well as 250 affiliated organisations
including trade unions, church groups and local ACTSA groups.
Since the end of apartheid in 1994, ACTSA has worked to support
the fourteen countries of the Southern African region. ACTSA aims
to identify issues for its campaigning work which have a major
impact on peace, democracy and development in Southern Africa,
which enjoy mass support from democratic organisations in the
region, and on which international policies and actors have a
major impact. In line with these values, the most consistent campaign
issue for ACTSA since 1994 has been trade. In particular, we aim
to ensure that the interests of the majority of the Southern African
population, who earn the wage that feeds and clothes their families
through farming and food manufacturing, are reflected in European
trade negotiations with the region.
2. On 27 September 2002 negotiations were
launched over future trading relations between 77 African, Caribbean
and Pacific (ACP) countries and the 15 countries of the European
Union (EU). The date was not marked by riots in the streets of
Brussels, smashed windows or police brutality. As a result, the
media and politicians have taken little interest. Nonetheless,
these negotiations represent the cutting edge of the globalisation
debate and are central to the prospects of some of the world's
poorest countries. One reason why they have attracted so little
protest is that the EU portrays itself as a friend of the developing
world, protecting Africa from the damaging impact of international
trade rules established to serve the needs of rich countries.
However the EU is not using the negotiations to protect Africa.
Far from it. In these negotiations the EU is pursuing the same
agenda it pushes in the WTO—insisting that poor countries
expose their markets and domestic producers to international competition.
This "free market agenda" could open up new markets
and new contracts for European multinationals, but it is much
less clear what Africa stands to gain.
3. The agenda for current negotiations has
been fundamentally shaped by the notion of "WTO compatability".
Thus, while this submission focuses on Cotonou, there is a vital
inter-action between Regional Trade Agreements and the Doha agenda,
towards which we propose the committee directs significant attention.
There is also a regrettable lack of democratic scrutiny of European
trade negotiators. Though the EU-ACP Joint Parliamentary Assembly
plays a progressive role in this area, the Commission's agenda
is primarily directed by the member states, via the 133 committee.
We are therefore concerned about the absence of transparency in
this process, of public and parliamentary debate within the member
states. This enquiry represents a good opportunity for British
parliamentarians to familiarise themselves with the issues concerned.
We have attached the "Cape Town Declaration", adopted
by the EU-ACP Joint Parliamentary Assembly last year, for your
information. This provides excellent coverage of the issues and
powerful critique of the Commission's current approach. However,
both the Commission and member states have largely ignored it.
We recommend that the Committee adopts the conclusions of the
Cape Town Declaration and pursues these issues with UK Government.
THE COTONOU
AGREEMENT
4. The discussions now underway will go
on for the next five years. They are taking place within the framework
of the Cotonou Agreement, signed in June 2000. This comprehensive
inter-state treaty replaced the 25-year-old Lomé Convention
and covers aid, trade and political relations between the EU and
the ACP. The Cotonou Agreement lays out broad principles for co-operation,
but the current round of negotiations will deal with all the small
print in the area of "future trade arrangements", defining
tariff levels, quotas, labelling and numerous other issues for
imports and exports between the two regions. As with most treaties,
the real politics of Cotonou is in this small print. All the warm
words about "equal partnership" and putting development
first will be forgotten as the development needs of poor ACP countries
are pitted against the interests of rich European countries.
5. ACP negotiators can expect to be threatened
with cuts in aid and political support, bullied by phone calls
to their Presidents and overwhelmed by the sheer volume of European
demands and agendas. They will have to rush between hundreds of
meetings in Brussels and Geneva, defending rights which they won
years ago and which should not be on the negotiating table at
all. European negotiators will also face pressure from the narrow
agendas of particular industries in European member states. The
Cotonou Agreement explicitly states that "civil society organisations"
ought to be consulted over all aspects of the treaty. However,
when it comes to trade, despite many critical voices existing
in civil society, it is the corporate lobby that holds sway. During
similar negotiations between the EU and South Africa, blockages
emerged as Portuguese wine manufacturers and Spanish fishermen
fought for EU protectionism for their special interests.
6. To counter these influences European
citizens, NGOs and Parliamentarians will need to make sure the
European Commission, European Parliament and member states are
always mindful of the counter-weight that exists within their
own societies and electorates—demanding that development
is put first. There is so far no consensus within Southern Africa,
let alone the wider ACP over how exactly to "put development
first", and what alternative arrangements should be promoted.
This evidence therefore seeks to put the EU's current proposals
in historical context, to re-iterate a number of concerns emanating
from the region, and to suggest some key principles that should
inform negotiations.
THE HISTORICAL
CONTEXT
7. The six treaties stretching from Lomé
I, signed in 1975, through five rounds of re-negotiation, to the
Cotonou Agreement, signed in 2000, offer an album of snapshots
which chart the changing nature of the relationship between Europe
and Africa. The EU has always been aware of Lomés political
origins in decolonisation, trumpeting the "special relationship"
between Africa and Europe. But the special relationship has consistently
failed to fulfil its promise. The treaties have reflected less
Africa's needs than Europe's shifting geo-political priorities.
Rather than bucking trends in the international system opposed
by African states (such as structural adjustment programmes and
"free market" policies), the EU has reinforced the strategies
of the World Bank and WTO.
8. The first Lomé Convention, signed
in 1975, formalised a new relationship between European countries
and their former colonies. Developing countries fought collectively
for a New International Economic Order, demanding a "managed
trade" regime and more aid with less strings attached. At
the start of the independence era, and in the midst of the Cold
War and the oil crisis, Europe's need for secure political allies
and reliable sources of raw materials meant that some of these
wishes were granted.
9. Lomé included innovative schemes
in four key areas:
— The ACP states were guaranteed preferential
trade access for ACP exports to European markets. In recognition
of the fact that the ACP economies were underdeveloped, these
trade preferences were not "reciprocal". In other words,
the ACP countries could maintain their barriers to EU exports
entering their markets, protecting fragile local producers and
continuing to receive income from taxing products entering their
markets.
— To guarantee their income, some suppliers
from the ACP countries were also given free market access for
specific quantities of rum, bananas, sugar, beef and veal. These
were called the commodity protocols.
— Lomé established mechanisms
to stabilise income from commodities on which many ACP economies
are heavily dependent. STABEX and SYSMIN provided a more reliable
and predictable income stream for poor countries facing global
price fluctuations.
— The ACP states won recognition of
the equal status and sovereignty of the contracting states,
implying that the EU would treat them as equal partners in negotiations
and that, in contrast to colonial times, only the people of African
countries had the right to set their own economic policies. Europe's
aid package, the European Development Fund (EDF), initially attached
low levels of conditionality to African government spending.
10. Each of these schemes involved a concrete
commitment to the concept of special and differential treatment,
seeking to compensate for inequalities in the levels of development
between poor African economies and Europe. But in spite of these
innovations, Lomé maintained the fundamental, colonial
structures of the relationship, whereby the EU obtains raw materials
from the ACP states and sells processed goods back to them.
ROLLING BACK
THE SPIRIT
OF LOMÉ
11. After 25 years of Lomé, the ACP
countries are even more trapped in their traditional trading patterns.
The share of ACP exports in European markets has fallen by half,
the ACP has experienced very low growth rates and limited economic
diversification. The EU has argued that this is a good reason
to rip the system up and start again with free trade. However,
before writing off the idea of managing trade, it is important
to analyse whether Lomé was effectively implemented and
whether certain aspects of the managed trade regime were successful.
12. Although all the key features of the
"managed trade" regime survived legally through to the
end of Lomé, the EU used the power imbalance within the
relationship to roll back the "spirit of Lomé".
— While preferential terms of trade
applied to both manufactured and processed goods from the ACP,
preferences for agricultural products, on which most Southern
African economies depend, were less generous. Access was limited
by quotas, seasonal restrictions and exclusions of specific products.
Europe has re-introduced tariff barriers for goods which Southern
Africa produces more efficiently than Europe, such as dairy products,
vegetables, nuts and fruits, wheat, flour and rice.
— The "rules of origin" clause
has been used to prevent manufactured ACP goods which require
some components manufactured outside the region from entering
the European market. This prevented the diversification of industries
within the region.
— Duties are much higher for goods
which have been processed in Southern Africa. This is designed
to keep Africa trapped in producing raw materials, while European
companies dominate the much more profitable business of producing
finished goods.
— The EU has given even better deals
to countries which are not as poor as those in Southern Africa,
but are politically favoured by the EU. As strategically favoured
regions of the world were offered even more "preferential
access" to the EU market than the ACP enjoyed, the relative
value of the access offered the ACP declined over time.
13. So it is perhaps unsurprising that the
managed trade regime failed to deliver spectacular gains. Nonetheless,
in areas where high tariff preferences have provided a real advantage
for Southern African producers, these preferences have driven
a significant expansion of manufactured goods. For example, textiles
from Zambia and furniture made in Swaziland have been encouraged
through high tariff preferences. And fish products from Namibia
and Mozambique have experienced export growth well above average
for developing countries[16]
Although exports from Southern Africa to the EU have declined
by 5.4% in volume between 1988 and 1997, in those areas where
the EU offered ACP countries significant preferences, exports
increased by 83.6%[17]
14. "Supply-side constraints"
have also prevented ACP countries from taking advantage of preferences.
ACP producers found it difficult to adapt rapidly to product quality
standards and to changes in world demand. Structural problems
also included low rates of saving and poor infrastructure. In
other words, ACP producers may not have been well positioned to
take advantage of trade preferences, but this is no reason to
argue that they might not potentially be very useful.
15. The Cotonou Agreement aims for "a
comprehensive approach which builds on the strengths and achievements
of the previous ACP-EC Conventions", but the EU's current
approach rejects the legacy of Lomé. Since the problems
of underdevelopment are essentially unchanged since 1975, with
Southern African economies still heavily dependent on low value-added
goods subject to fluctuating prices, a more balanced assessment
of measures taken in the past to face these problems can help
to map out a sensible response now.
PRESSURE FROM
THE WTO
16. The advent of the WTO in 1994 dealt
a strong blow against the idea of "managed trade" and
against the attempt to use the international trade system to equalise
relations between rich and poor. The WTO's central purpose is
to construct a "level playing field". Its "non-discrimination"
rules allow for non-reciprocal trade preferences only in two specific
circumstances—political groupings of states, and groups
made up only of least developed countries (LDCs). The ACP group
does not meet either of these conditions, distributed, as it is
both geographically and between 39 LDCs and 32 richer countries.
Lomé preferences therefore had to exist on a "waiver",
agreed by the membership of the WTO as a short-term allowance
for countries in crisis. The Lomé waiver came under attack
from key states (led by the US) and companies (particularly in
the soft fruit sector), arguing that the richer countries within
the ACP should not enjoy any special treatment and should "graduate"
out of the Lomeé system and into the "Generalised
System of Preferences" (GSP)—the market access scheme
which the EU offers exporters from non-favoured locations. The
"banana dispute" showed the willingness of the US to
push the issue and the reluctance of the EU to commit a real political
effort to fighting the case with the ACP. The current waiver will
run out in 2008 and the EU has made it quite clear that it will
not sponsor another appeal to the WTO to extend this deadline.
The WTO dispute gave the EU a convenient excuse to drop the preference
system and WTO-compatibility became the EU's fundamental condition
for whatever regime replaced Lomeé. The EU has lost faith
in the idea of managed trade, having become convinced of the argument
that internal economic reforms, or structural adjustment, are
the key to development.
THE COTONOU
NEGOTIATIONS THUS
FAR—RETREAT,
RETREAT
17. When the time came to negotiate Cotonou,
all of the negotiating strength which the ACP drew on in 1975
had been dissipated:
— Producers of commodities have been
crippled by an historic decline in terms of trade for non-fuel
ACP primary commodities,
— At the end of the Cold War with the
EU increasingly looking East to accession states, Africa, and
the post-colonial ties cemented by Lomeé, have become strategically
irrelevant,
— As the debt crisis mounted, African
states have become increasingly dependent on creditors ever more
willing to impose their version of development,
— The coalition of states which fought
for managed trade had lost its cohesion under intense political
pressure, and has failed to negotiate effectively as a bloc.
18. The direction of the negotiations was
thus defined to a large extent by the European Commission, which
in a 1997 Green Paper argued that the new phase in the relationship
should involve a complete re-assessment of the purposes of co-operation.
The attitude which the Commission appeared to adopt was not one
of negotiation between partners, but of the EU dictating to the
ACP what would and would not change in the new relationship. The
Commission stated, "the colonial and post-colonial period
are behind us and a more politically open international environment
enables us to lay down the responsibilities of each partner less
ambiguously"[18]
and set about unilaterally dismantling the key features of the
Lomeé regime, effectively before negotiations on a new
framework had even started.
19. First, both commodity stabilisation
mechanisms, STABEX and SYSMIN were closed. Despite being jealously
guarded by the ACP, these mechanisms were written off by EU negotiators
as a hangover from the New International Economic Order. Whatever
the failings of the previous system, this approach leaves the
EU with no solution to offer to one of the biggest problems faced
by Southern Africa. Recent calls for the destruction of huge stocks
in the world coffee market illustrate the inability of the current
multilateral system to deal with this issue.
20. The EU has also sought to dramatically
re-work the system of trade preferences and protocols. Until 1998
the European Commission was considering "Economic Co-operation
Agreements", a half-way house to full WTO compatibility.
However, they are now insisting on "WTO compatibility"
for new trade arrangements and encouraging all ACP states to join
sub-regional groups of states and to negotiate free trade deals.
The decision to insist upon full reciprocity represents a failure
of political will to defend the interests of the EU's ACP "partners".
During the negotiations leading up to June 2000, the EU pushed
the full reciprocity model, against vociferous African complaints.
The EU is now trying to now trying to limit the agenda for the
new round of talks to the establishment of these reciprocal agreements.
THE NEGOTIATIONS
FROM SEPTEMBER
2002
21. Despite the ACP's clearly expressed
misgivings, the EU is insisting that the model for discussion
in the forthcoming round of negotiations should be the "Economic
Partnership Agreement" (EPA). Under these "reciprocal"
agreements, Southern African countries would be obliged to open
up their markets to EU products in order to maintain the same
levels of market access to the EU that they currently have. EPAs
would involve Southern African countries organising themselves
into regional groupings, capable of managing a customs unions.
Each group would then negotiate an agreement with the EU which
would involve detailed timetables for the removal of import tariffs
and quotas and export duties on specific products. These policies,
which Southern African countries currently use to protect domestic
producers and jobs from external competition would be abolished.
Based on the EU-South Africa Trade and Development Agreement,
Southern African states might be asked to liberalise access to
their market on goods that account for around 85% by value of
their imports from the EU. EPAs are due to start in 2008 and be
completed within 12 years. The EU claims that EPAs will have a
positive impact on Southern Africa, increasing the flow of European
investment and assisting in the restructuring of the economies.
But the models on which these arguments are based assume that
the theoretical benefits of free trade between economies at similar
levels of development will also apply in the concrete reality
of underdeveloped, post-conflict Southern African economies. The
EU is finding it difficult to convince the ACP of these benefits.
Delayed completion of impact studies means that there is a lack
of empirical evidence of EPA's likely impacts. It is far from
obvious who the winners will be. But the risks for Southern Africa
are clear.
22. RISKS OF
EPAS
— Continued de-industrialisation and
unemployment in the manufacturing sector: Local Southern African
industries, particularly in agriculture, are typically not in
a position to compete with the heavily subsidised goods produced
in the EU. There is a real danger that opening up Southern Africa's
markets will lead to local markets being swamped by artificially
cheap European produce, destroying jobs and livelihoods in the
region.
— Drastic declines in fiscal receipts
from losses in tariff duties: Many ACP countries are heavily dependent
on public income raised from customs duties and import taxes.
Countries that adopt an EPA know that they will face a sharp reduction
in their fiscal receipts, reducing the finances available to national
health and education systems already crippled by the debt burden.
The EU-South Africa Trade, Development and Co-operation Agreement
has led to revenue losses for neighbouring Botswana, Lesotho,
Namibia and Swaziland ranging from 5.3% to 13.9% of total government
revenue.[19]
— Unequal capacities to trade: If proposals
for free trade areas go ahead and existing supply side constraints
are not addressed, ACP-based companies will not be able to supply
the larger markets created by EPAs, and European multinationals
are likely to dominate. This is in fact precisely the argument
that the European Commission used to convince its own member states
of the value of the idea in its 1995 paper "Free Trade Areas:
An Appraisal".
— Doubtful benefits for consumers:
Consumers may benefit initially from cheaper goods, but once market
monopolies are established, and local and regional products have
been priced out of the market, consumers are likely to find that
prices rise again. In the long run, EPAs will increase the profit
margins of European exporters rather than lowering prices for
consumers and ACP importers.
— Undermining the benefits of regional
integration: It has long been recognised that increasing levels
of intra-African trade is the most viable development strategy
for the continent. This regional integration would be undermined
by EPAs if businesses opt for cheap EU products rather than goods
and services from neighbouring countries.
— Unequal capacities to negotiate:
The capacity of the ACP to negotiate with the EU is very weak,
especially when broken up into EPA regions. South African negotiators
who were involved in the EU-SA talks are assisting the ACP, but
there are few trade officials able to follow the complex negotiations.
The EU's strategy involves putting a plethora of issues with serious
development implications on the negotiating table at one time
and under tight deadlines. The ACP will be stretched further by
parallel negotiations in the WTO and in their own regions.
FORCED REGIONALISATION?
23. The Cotonou Agreement states that EPA
negotiations will only be undertaken by those states which consider
themselves ready to do so. But the European Commission's mandate
has confirmed its preference of building on existing regional
groupings, such as SADC in Southern Africa, ECOWAS in the West
and COMESA in the East. The EU argues that these groupings have
the potential to create economies of scale within African markets,
providing "stepping stones" towards deeper global integration.
Though the EU seems to be trying to define terms and conditions
which are not those of the Cotonou Agreement, the decision over
which groups of states will form EPAs, which was due at the end
of 2001, is one that must be made by the ACP states themselves.
It has caused enormous tensions within the ACP grouping and delays
in presentation of vital research on the economic impact of EPAs
have held up progress.
24. Forming regional blocks to negotiate
with the EU may jeopardise delicate existing processes of integration
at the sub-regional levels. One of the difficulties, particularly
in Southern Africa, is the overlap between existing groups. For
example, SADC and COMESA share nine members. A further challenge
relates to the sub-regional groupings within proposed EPAs, such
as the Southern African Customs Union (SACU) within SADC. The
SACU has already effectively integrated Botswana, Namibia, Lesotho
and Swaziland into the EU-South Africa free trade deal.
25. For the least developed countries (LDCs)
in Southern Africa, EPAs pose a major challenge. In February 2001,
these countries were granted non-reciprocal duty free and quota
free access to EU markets through the "Everything But Arms"
initiative. They therefore already have market access and have
no incentive to commit to "reciprocity" with the EU.
However, where these countries are already engaged in a customs
unions with richer ACP states, they will not be able to protect
themselves from European goods flowing across their borders from
neighbouring countries. It is unclear either why LDCs would want
to join an EPA, and how, if EPAs go ahead, they could join, negotiate
and function within a regional grouping which includes non-LDCs.
26. Regional integration takes a long time
to negotiate and to move forward equitably. EU member states have
taken decades of negotiations to establish a regional settlement.
However, the ACP is now being asked to untangle the complex web
of existing trade agreements to meet an external deadline. SADC
states already know what they need to do in order to achieve economic
integration and are taking steps to do it. Rushing the process
risks weakening the goodwill of individual member states towards
the process, undermining its long-term potential.
THE NEED
FOR ALTERNATIVES
27. The ACP have fought hard against the
EPA proposal and secured an opt-out clause in the Cotonou Agreement
which provides an alternative for ACP States not wanting to negotiate
EPAs. These must guarantee at least the current level of market
access, so ACP states should not therefore be forced to make any
concessions in order to secure it. This should apply to tariffs,
non-tariff barriers and the rules of origin system. As the ACP's
guidelines for the negotiations argue, "In view of the differences
in the level of development between the ACP States and the EU,
the ACP cannot be required to make the same level of commitments
under EPAs as the EU, particularly as regards market access."
Although there is little consensus at the moment, there are many
possible alternatives to the EPA being promoted by actors in Southern
Africa. However, the EU are refusing to clarify what alternative
they would be prepared to consider, leading to fears that the
only real alternative is to lose all preferential treatment (apart
from LDCs), and instead become part of the EU's Generalised System
of Preferences (GSP).
AN ALL-ACP
AGREEMENT?
28. A number of states are concerned that
the Commission's proposals risk destroying the idea of an ACP
grouping. They have argued for an alternative which would maintain
an ACP-wide negotiating forum in which all non-LDCs would negotiate
an EPA while the LDCs would maintain the market access they recently
gained under the Everything But Arms (EBA) initiative. This would
avoid sub-regional EPAs competing with each other, for instance
for certain proportions of any quotas under the commodity protocols.
It would make it easier to negotiate for Commodity Protocols that
benefit the whole of the ACP on equal terms. They argue that a
united front would enable small states to secure their interests
within a broader negotiating forum, and could help to link sectoral
interests spread across the ACP region (sugar and textiles, for
instance).
EBA FOR ALL?
29. One way in which the EU could build
confidence in the negotiations would be to make a number of serious
policy announcements in the early stage of negotiations. These
might include the extension of the Everything But Arms Initiative
to all developing countries—an idea floated by European
Development Commissioner Poul Nielson, who recently suggested
that the EU could "gradually eliminate all tariffs and quotas
for all developing countries." The idea is apparently backed
by a number of Northern European states (UK, Denmark, Sweden).
Whilst such a proposal would do an enormous amount to secure ACP
good-will, seasoned EU watchers are sceptical that Europe's development
wing would be able to push the proposal past the protectionist
Agricultural Directorate.
NON-TARIFF
BARRIERS
30. As the EU comes under increasing pressure
to cut tariffs, the EU is using "back door" measures
to block African exports, known as non-tariff barriers.
— The EU places restrictions on the
amount of certain products that can be imported into Europe. Quotas
often apply seasonally, so that when European goods are being
harvested, they face no competition.
— Food safety regulations should
be designed to protect European consumers. But they are being
abused. The EU is using them as another way of keeping African
exports out of Europe. Standards are being set ridiculously high,
even when the risks are minuscule.
— Even if all trade barriers were removed,
Southern African producers would still find it hard to compete
with EU goods. This is not because the EU produces more efficiently
than Africa, but because the EU pays European farmers huge subsidies
through the Common Agricultural Policy (CAP). 45 billion Euros
a year, nearly half the EU's entire budget, is spent on the CAP.
This gives European farmers an unfair advantage both within the
EU and on the world market.
31. The ACP wants these non-tariff barriers
to be dealt with through the negotiations, and is particularly
keen that the "external dimension of the CAP" should
be part of the first phase of the negotiations. However, the EU,
wracked by internal tensions over the future of the CAP, is refusing
to make any clear commitment to deal with CAP reform, only to
"examine on a case by case basis, the potential impact of
export refund mechanisms on the process of trade liberalisation."
WTO COMPATIBILITY:
A MOVING TARGET
32. The EU is seeking to avoid discussions
of innovative policies, insisting that subsidies are dealt with
in the WTO and that negotiations must secure "WTO compatibility",
which they present as a static, objective fact. But compatibility
is a moving target—and the EU has a strong influence on
the direction of movement. All WTO decisions, as illustrated by
recent discussions over steel, are interpretable and negotiable.
So the question is really about how much political capital the
EU is willing to expend on securing development friendly rules
within the WTO. They can do this because the Cotonou negotiations
will take place in parallel with a number of key WTO debates which
could change the nature of those rules.
33. The ACP are stressing that WTO rules
are incompatible with the ACP needs, and not the other way around.
They are appealing to the Commission to work with them in Geneva
to increase the flexibility of WTO rules. The EU (15) and the
ACP (77), form a substantial part of the 144 members of the WTO,
and should be able to influence decisions about new rules in a
direction which satisfies developing countries' demands and make
the terms of world trade more equal. The EU claims that it is
"prepared to join forces with the ACP . . . to face the challenges
of globalisation in the context of the WTO Doha Development Agenda."[20]
But the EU appears to have a very limited view of the need for
change in the WTO's approach, also stating that, "the WTO
Doha Development Agenda . . . is complementary and mutually reinforcing
with the EPA process."[21]
34. Of particular importance are WTO negotiations
over Regional Trading Agreements and over "Special and Differential
Treatment". Looking at the EU's negotiating priorities within
the WTO reveals that the ACP's needs are near the bottom of their
list of priorities. For instance, the EU mandate repeatedly makes
reference to the need to "take account of the different needs
and levels of development of ACP countries and regions",
but the only measure being offered to make sure this happens is
"variable speed of trade liberalisation". And though
the Commission tells the ACP that they are they are committed
to pursuing "flexibility", its current negotiating position
within the WTO is to pursue "clear and quite strict rules"
on what is a WTO compatible free trade area arrangement.
35. There are also a range of "new
issues" which the EU is working to liberalise through the
WTO. These include trade in services, investment, procurement
and competition. Given the high level of attention being paid
to these issues within the WTO, the inclusion of the same issues
within the Cotonou negotiations can be understood as an EU strategy
to pursue liberalisation "through the back door".
CONCLUSIONS
36. ACP countries have been encouraged to
believe that these negotiations are the only way that they can
maintain their current access to highly protected EU markets.
40% of Africa's export earnings depend on trade with the European
Union, and for many products this is as a result of trade concessions
that Europe had granted as a means of supporting economic development.
There are many weaknesses on the ACP side, which make the negotiations
even more challenging for them. The fear amongst African negotiators
is thus that the EU's preferred model will prevail regardless
of its impact. The Commission claimed in 1992 that, "The
ideological neutrality of Lomeé rules out the possibility
of the Community living by doctrines, be they neo-liberal or otherwise"[22]
But the EU's attachment to EPAs in the face of widespread ACP
opposition, in the absence of evidence for its benefits, and with
clearly identified risks to the economies of Southern Africa has
led many to claim that the Commission is ideologically committed
to free trade, whatever the consequences. Southern African farmers
and other producers are at risk of being treated as guinea-pigs
in a global free-trade experiment.
37. The EU's mandate for negotiations states
that, "the objectives of the future trading arrangements
with the ACP States under the Cotonou Agreement are the smooth
and gradual integration of ACP States into the world economy and
the eradication of poverty." This might give the impression
that ACP states have failed to engage with the global economy.
But Southern African countries, under pressure from the World
Bank, the IMF, the WTO and the EU have been opening up national
and regional markets to foreign competition for the past two decades.
They are deeply integrated in the world trade system. The problem
is that Africans are not benefiting from this free market, as
more resources leave Africa than come in. Despite increasing exports,
the value of African products continues to slump. Africa generates
nearly 30% more exports today than in 1980, yet their value has
crashed by more than 40%[23]
There has been no significant growth during the period, no major
increases in foreign investment and insignificant reductions in
poverty.
38. The important questions are not about
how integrated Southern Africa is, but about the terms under which
Southern African countries engage with the global economy, whose
needs this engagement meets and how we can we break the cycle
of extraction, exploitation and dependence. Future EU-ACP co-operation
therefore needs to focus on:
— Compensating for the different levels
of development between Europe and Africa.
— Securing greater real market access
for the ACP to Europe.
— Reducing dependence on primary products
by supporting diversification and increased value-added manufacturing.
— Enhancing production, supply and
trading capacity in ACP countries, particularly with respect to
small scale producers and manufacturers.
Action for Southern Africa (ACTSA)
January 2003
16 Beyond the Rhetoric of Economic Partnership Agreements,
Issues to be Addressed in ACP-EU Trade Negotiations, Dr Rob Davies
(MP) and Dr Kaire Mbuende (MP), 2002. Back
17
Significant preferences are defined here as a greater than 3%
advantage over other regions. From Beyond the Rhetoric of Economic
Partnership Agreements, Issues to be Addressed in ACP-EU Trade
Negotiations, Dr Rob Davies (MP) and Dr Kaire Mbuende (MP), 2002. Back
18
CEC-DG VIII, 1997, quoted in William Brown, Restructuring North-South
Relations: ACP-EU Development Co-operation in a Liberal International
Order, Review of African Political Economy, 85, 2000, pp 376. Back
19
"The Economic Impact of the Proposed European Union-South
Africa Free Trade Area Agreement on Botswana, Lesotho, Namibia
and Swaziland", BIDPA, Gaborone, Botswana, and IDS, Sussex,
UK, July 1998. Back
20
EU Trade Commissioner Pascal Lamy in Fiji for Africa, Caribbean
and Pacific Summit, Press Release, Brussels, 12 July 2002, europa.eu.int/comm/trade/bilateral/acp/pr120702.htm. Back
21
Lamy, ibid. Back
22
CEC-DG VIII, 1992, pp 16, quoted in William Brown, The EU and
Structural Adjustment: The case of Lome IV and Zimbabwe, Review
of African Political Economy, 79, 1999, pp 26. Back
23
Quoted in Patrick Bond, "What is Pretoria Planning for Africa?",
Sangonet Newsletter 45, December 2001. Back
|
