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Tuesday, November 27, 2007

Economic Partnership Agreements: new dangers

Source: CIDSE Advocacy Newsletter, issue 37 (November 2007)

After long negotiations, the EU is again turning the screw on African Caribbean and Pacific Countries (ACP) in a last-ditch attempt to seal a trade liberalization deal. Under a proposal by Trade Commissioner Peter Mandelson, the EU has endorsed a watering down of its demands in the context of Economic Partnership Agreements (EPAs). While this might appear as a conciliatory move towards ACP countries, it is in fact quite the opposite and creates a new danger that poor countries in Central Africa and the Caribbean, among others, will further undermine their food sovereignty.

Initially, the Commission’s Economic Partnership Agreements aimed to secure liberalization in goods as well as services and government procurement markets in ACP countries. The Commission has argued that existing agreements with ACP countries were contrary to World Trade Organization rules and that EPAs would bring these countries in conformity with international rules, as well as promote their economic integration in world markets.

Almost immediately, the proposed agreements were opposed by a majority of ACP countries as well as the NGO community. One of the first reasons for this opposition is the weakness of the EU’s proposals. While it makes very high demands (liberalization of goods, services and government procurement) on poor countries, it offers comparatively very little (quota free access to the EU market for most ACP goods – which they enjoy already and to little advantage).

The proposals take no account of ACP’s countries capacity constraints to export towards the EU or meet its stringent sanitary criteria. But most importantly, the EU has failed to explain what “integration” to the world markets would effectively mean and what tangible benefits these countries would derive from it. While the Commission has consistently stressed that these Agreements would promote “growth”, it has failed to explain how this growth would be distributed in ACP economies and whether it would contribute to reduce poverty.

Under the new proposals, the EU would now drop its claims to liberalizing services and government procurement markets in ACP countries, so that EPAs would only cover goods. It also hinted that, in some cases, liberalization could take place over a period of 25 years. Though this seems like a more sensible approach, it still represents a one-sided deal for most ACP countries: the EU merely offers a market access which ACP countries already have and are mostly unable to benefit from. Also, the deal would comprise agricultural goods without discrimination. Such goods still represent the single most important source of revenue in the ACP region. Under a liberalization agreement, ACP countries’ already weak agricultural base would be vulnerable to cheap imports from the EU. This could in turn dramatically undermine the food sovereignty and long-term economic development of ACP countries.

The most worrying development in the EU’s negotiating stance is that it is presenting this proposal as time-bound: countries that wish to have a deal must sign it by the end of this year. This means ACP countries will have less than 6 weeks to examine the proposal and effectively threatens to split the ACP community between the “haves” and the “haves not”. This approach is not only bullish, but deeply irresponsible. It also sheds further light on the “development” character of EPAs.

It now seems rather clear that the EU is not prepared to genuinely engage in a reframing of the Agreements that would put development first and trigger targeted growth in the economic sectors that need it most.

EPAs will be on the agenda of the next meeting of the CIDSE-Caritas WG on Trade and Food Security which will take place in Brussels on 6-7 December.

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See also Euforic's dossiers on trade and EU-ACP cooperation

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