EPAs spell doom for poor economies

EPAs spell doom for poor economies


EPAs are meant to create a free trade area (FTA) between the EU and the African, Caribbean and Pacific (ACP) countries in accordance to World Trade Organisation (WTO) rules for globally liberalized trade that removes all tariff and non-tariff barriers and other preferential trade treatment as was the case between the EU and ACP countries under the now defunct Lome Convention.

Unlike the preferential treatment of ACP countries by the EU states under the Lome Convention, the EPAs are open to all developing countries, in effect terminating the ACP countries as the main development partner of the EU, an arrangement that had lasted for years.

A key feature of the EPAs is their reciprocity and their non-discriminatory nature, meaning they care less about differences between rich and poor or the least developed nations, such as Tanzania, Uganda, Rwanda and Burundi in international trade relations.

Under international relations and agreements, the principle of reciprocity states that favours, benefits, or penalties that are granted by one state to the citizens or legal entities of another, should be returned in kind. This means that if ACP goods enter the EU duty free then under WTO rules, EU goods should also enter the ACP countries duty free in order to fulfill the criterion of being a non-discriminatory agreement.

EPAs are being negotiated within the framework of the Cotonou Agreement, which was signed in June 2000 replacing the Lome Convention that was the basis of ACP-EU development co-operation since 1975. EPA negotiations were supposed to have been concluded on a region by region basis by 2008 but talks continue because the parties are yet to agree on the finer aspects of the deals, including trade revenue and less aid inflows.

In principle, the Cotonou agreement aims at reducing and eventually to eradicate poverty through sustainable development and to gradually integrate ACP countries in the world economy, meaning the economies of the nations would finally be evaluated through a single monetary value or currency such the US dollar or the Euro.

The revised Cotonou Agreement is also concerned with the fight against impunity and promotion of criminal justice through the International Criminal Court (ICC) at The Hague, which is partly why some Kenyan politicians are now at The Hague on charges of crimes against humanity following the December 2007 post election violence.

Mr Mkapa and the South Centre are right in warning poor countries about the economically suffocating nature of the EPAs. But what chances do poor nations have of ringing themselves out of the tentacles of the WTO, a bureaucratic monolith that has its sights on nothing else but bringing all the economies of the world under one rule?

One serious shortcoming about the EPAs is their tendency to be negotiated in secrecy or behind close doors for a process touting adherence to democratic values. The Cotonou Agreement recognises the role of civil society and even local governments in development but EPA negotiations are usually held in camera with highly patronising attitudes and statements when word about what is being discussed eventually escapes the four walls.

I think one of the options that poor nations have is to return to the imperatives of south-south cooperation, work that was done very well by Mwalimu Julius Nyerere when he chaired the South Commission and later the South Centre that produced a very comprehensive report for engaging and dialogue with the rich North entitled: “The Challenge to the South.” One of the reviews of that report reads as follows:

"The Report is a welcome departure from the publications...in which the problems of economic development in the developing countries are looked upon mainly from the perspectives of the developed countries....[It] has clearly brought out two things: the South has to depend mainly upon itself for its development, and the North cannot simply be oblivious to what happens to the countries of the South."--Southern Economic Journal.

Yet, this is what is happening. In globalising the world economy, the north is totally oblivious to the needs of the south. But a problem which Mwalimu also identified in ‘The Challenge to the South’ was that the south doesn’t know itself. Besides, its leaders and intellectual are too preoccupied with either national or regional issues as to be of broader service to the region, which is home to half of humanity.

Another thing is that there is sometimes serious misunderstanding of the difference between trade negotiations such as under EPA and development assistance or aid. Under the Lome Conventions the two aspects were treated together but under EPAs, trade is separate from development assistance, which is in any case undesirable if trade relations were to be more democratic and not be based on the insensitive principles of exploitation flaunted as equality or reciprocity.

Another tricky aspect is to negotiate EPA on regional basis or multilateral arrangements as opposed to bilateral deals. The East Africa Community (EAC) alone is not made up of countries with equal development status. At least Kenya is not on the list of Least Developed Countries (LDCs) to which Tanzania, Uganda, Rwanda and Burundi belong.

Indeed, EPAs stand out not only to globalise world economies but to clobber the economies of poor nations and condemn the people to perpetual poverty and enslavement very much away from the stated aim of eventually eradicating poverty in the world.
EAC negotiators have to be very careful. If tax free goods from Europe were to swamp the region what would happen to domestic revenues, jobs and the ability finally to provide schools, health services and even build roads as indicators of development?! No kidding.

EAC cannot export on the same level to the EU so as to benefit from access to wider markets under an FTA. Such trade is bound to be one sided and that is where poor nations would literally get spoofed by EPAs and FTA. One of the strategies suggested by ‘The Challenge to the South’ was to engage the North in dialogue.

However, there has to be increased debate and greater awareness creation also within the countries of the South themselves about the dangers of giving-in to almost all the demands of the North. It is about our future and the future of our children.   That report summarizes the South’s global vision as follows:

“The south’s vision has to embrace the whole world, for it is part of the world. It cannot isolate itself; nor should it wish to isolate itself from the rest of the world. On the contrary, the South seeks an undivided world in which there would be no ‘South’ and no ‘North’; in which there would not be one part developed, rich, and dominating, and the other underdeveloped, poor, and dominated.

The South’s goal is a world of equal opportunities in which criss-crossing lines of interaction – political, economic, social, cultural, scientific – may sustain global interdependence; in which nations in their variety would work together in pursuit of jointly agreed goals; in which peace, security, and dignity would be the birthright of all persons and all peoples; in which all can take advantage of the advances of science; and in which the world’s resources may be prudently used to satisfy the needs of all and not  merely the narrow self-interests of a few.”

If the world can get there, then it shall have become a better place for all. Key that however, is that the South too has to learn to bestride this world as equal partners in all maters of global destiny. If it fails, it shall have no one else to blame.

Author: Mboneko Munyaga

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