Trade partnerships no ticket out of poverty

Woman in market Over the past few months, the European Union has cast an increasingly eager eye over the markets of the African, Caribbean and Pacific group (ACP) of nations.

At what is hoped will be the end of five years of negotiations, varying Economic Partnership Agreements (EPAs) are due to be implemented in a number of compliant states. Their purpose, according to the trade commission, is to establish 'new trading arrangements removing progressively barriers of trade between EU and ACP countries', and to create 'sustainable development and contribute to poverty eradication in the ACP countries'.

The EPAs will replace the Cotonou Agreement on mutual export and import legislation between the EU and ACP. Older legislation has been condemned as 'too limited', which has prompted sweeping new measures in order to establish additional free trade zones.

According to a special briefing paper, the trade commission sees the EPAs as taking a 'new, more comprehensive approach (that will) tackle all barriers to trade, mostly through re-enforcing regional integration and addressing supply-side constraints, and form secure, WTO-compatible trade arrangements'.

There is a large amount of scepticism regarding the new agreements. Many countries, in particular NGOs and the charity sector, have expressed fears that the EPAs will lead to the devastation of their respective markets. They fear ia mutual lowering of tariff barriers could allow for the EU to wedge open foreign markets for its own produce, while having little to fear from the much smaller competitive power of the ACP.

Groups such as the International Peasants Movement (small-holding rural farming is prevalent in ACP nations) have been particularly vocal, stating that 'the EPAs will open up ACP markets to devastating competition from EU exports'. They believe further measures will only 'lead to increased social inequality and poverty through the destruction of local industries and small-scale agriculture, damaging employment and livelihoods'.

Countries such as South Africa — who represent the more financially robust African nations — have also refused to sign. South Africa appears to prefer its own Trade and Development Cooperation Agreement (TDCA), which has been in force in one form or another since 2000.

The EU subsequently moved to combat such opposition by threatening to impose additional tariff barriers on ACP produce entering the European market if an agreement was not reached by 2008.

This caused a veritable outcry in the targeted countries, who felt they were being bullied into acceptance. Speaking after the EU-Africa summit last December, Senegal's President Wade stated that 'it was said several times during the plenary session and it was said again this morning. Africa states reject the EPAs.'

As of the end of 2007 only 35 out of the 79 ACP states were alleged to have signed up. Those that still resist may now have to endure a change in trade relations that is far from favourable. As part of its routine charity work in combating global poverty, War on Want has taken a particular interest in the issue. In recent correspondence, their Director of Campaigns and Policy, John Hilary, stated that:

The EU is specifically saying that ACP countries which don't sign up to EPAs (at least in a framework state) by the end of 2007 will go back to the normal access which developing countries have to the EU market under GSP rules, which includes facing tariffs on many goods.

However, this does not apply to the substantial number of ACP countries which are 'Least Developed Countries' (LDCs), since they already qualify for duty-free access to EU markets under the Everything But Arms initiative. Key sectors which will be affected include Kenya's flower exports, which is one reason why the Kenyans have agreed to be the first to sign.

Unfortunately, given the resistance still being offered by multiple states, things have not changed for the better. According to groups like the Overseas Development Institute, while import barriers have been removed from EPA signatories, 'higher, less preferential duties' have been imposed 'on those non-LDC ACP states that have not initialled EPAs'.

Therefore, despite the most optimistic declarations from the EU, it seems the EPAs may not be the world's long awaited ticket out of poverty.

LINK:
MPs want Uganda out of EAC-EU trade deal (The East African)

 


Dan Read Dan Read is a freelance journalist and editor operating out of the UK. In the past he has specialised in political and trade union issues, and has appeared in such publications as Transitions in the Czech Republic and Z Magazine in the US.

 

Flickr image by transaid images

 

 

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