Global Policy Forum

Africa: Countries Stand Up to EU


By Michael Deibert

Inter Press Service
August 28, 2007

Concern over getting too little in return for what they are being asked to give up has led some African nations to say "no" to some proposals for new trade relations with Europe next year. Several Eastern and Southern African nations have announced that they will only sign parts of the Economic Partnership Agreements (EPAs) that relate to market access and development. The EPAs have been put forth as successor to the Cotonou Agreement, which expires at the end of December.

The Cotonou Agreement gives 77 African, Caribbean and Pacific (ACP) countries preferential access to European Union (EU) markets. Signed in Benin capital Cotonou in June 2000, the agreement replaced the 25 year-old Lome Convention (signed in the Togo capital). The Cotonou Agreement was broader in sweep than its predecessor, and set as its objectives "poverty eradication, sustainable development and the gradual integration of the ACP countries into the world economy."

At a regional negotiation forum Aug. 3 to 5 in Port Louis, Mauritius, 16 Common Market for Eastern and Southern Africa (COMESA) countries agreed a strategy to be presented at their next negotiating round in September. The 16 COMESA nations, represented by no less than five separate overlapping and occasionally competing economic groups, have little choice but to sign on to the market aspects of the new pact in order to maintain preferential access to EU markets and remain compatible with World Trade Organisation (WTO) access rules.

At present ACP members enjoy non-reciprocal trade benefits with the EU -- such as access to EU markets which EU nations do not enjoy with ACP countries -- but these benefits are incompatible with WTO standards. New trade terms are being renegotiated through creation of WTO-compliant Economic Partnership Agreements (EPAs) that are scheduled to enter into force by the end of 2007. But EPA negotiations have proved difficult, with some countries fearing that their economies will not be able to withstand competition from European goods for years to come.

At a meeting in Brussels in February this year, COMESA negotiators said that potential loss to revenue for many African states across the continent heavily dependant on tariffs could require the EU to provide an additional 2 billion euros in assistance by 2010 if they were to allow Europeans free access. The COMESA members also want the EU to commit more funds to development in exchange for lowering trade duties. "What Africa lacks is a market for its goods, and there are many barriers amidst which our goods are produced and sold to the EU," says Tiberius Barasa, assistant research fellow at the governance and development programme at the Institute of Policy Analysis and Research (IPAR) in Nairobi, Kenya.

The EU has been accused by some food and trade policy analysts in the developing world of applying "zero tolerance" policies on food import that they say have more to do with protecting Europe's heavily subsidised agricultural and fishing industries than with public safety.

Another mistake, some observers in Africa say, is an insistence on the part of Brussels to make South Africa the standard for assessing the capacity of the whole continent to withstand loss of revenue foreseen through the EPAs. "This appears to be a fundamental clash of paradigms, and it's very difficult to see how we're going to overcome that," says Brendan Vickers, senior researcher on multilateral trade at South Africa's Institute for Global Dialogue. "The (European) Commission just isn't seeing the bigger picture, and there's a failure to understand that it's not just the South African market, it's the markets of other countries and less developed countries." South Africa, which has natural resources and a highly developed business and communications infrastructure, maintained per capita gross domestic product of 13,300 dollars last year, despite unemployment that still hovers around 25 percent. The Bureau for Economic Research in South Africa reported this month that South Africa's GDP growth holds steady at 5 percent. By contrast, Mozambique maintained a GDP per capita of just 1,500 dollars over the same period. In Kenya it was 1,200 dollars, and in Tanzania 800 dollars.

Despite offer of a transitional period for lowering trade barriers, there are fears that any agreement that does not address issues such as production and supply within each individual economy could do more harm than good to bilateral trade.

"If you look at national impact studies that have been made, you find that these reciprocal free trade agreements are going to be devastating for industrial capacity, for tariff revenues," says Vickers. "There's a need for far greater development cooperation to address these issues."

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