Info Service on WTO and Trade Issues (May 08/07)
African Ministers and CSOs in scathing attack on EPAs
Accra, 22 Apr (Riaz K. Tayob) -- Economic Partnership Agreements came under heavy attack from two African ministers who criticised the EPAs while many African NGOs called for their governments to reject and pull out of these free trade agreements with the European Union.
This took place at a NGO side event at UNCTAD XII convened on Tuesday by the Africa Trade Network with the objective of presenting its views and engaging with officials.
Minister Rob Davies of
countries find themselves backed into a serious corner that undermines
development prospects and divides the Africa,
from promoting regional integration, the reality is that they have created
divisions and complicating
said that SADC does not have a common regional position on services,
government procurement, investment or competition. As such the common
position of SADC is that we would not enter into binding commitments
with the EU on these issues. The EU demands an agreement on these issues,
which is premature, as it even took
far as the other new generation issues are concerned, investment and
An important issue for developing countries is standards to sell agricultural products, and the EU has made demands that exceed WTO obligations and which set up inequitable terms.
Many of the contentious issues were inserted into the text at the last moment as red lines (bottom line demands). Included in the dispute settlement demands are mechanisms for the EU to take collective action against our countries, said Davies. They also demand onerous administration of customs procedures so that EU goods can pass freely in the region with only one point of payment of duties and guarantee that they will not pay duties at any other customs point in the region. African countries would have to bear the costs of this administration. On infant industry protection, the policy space left to us is restrictive.
Further the EU demands a ban on export taxes even though these are used to encourage local production. This prohibition on policy space is to grant EU firms access to the primary products they need.
the most favoured nation treatment clause (i. e. that African countries
are to accord to the EU on a MFN basis the preferential treatment that
it gives to other trading partners in other FTAs), Davies said this
would limit the region's ability to pursue trade diversification. This
is in spite of the fact that trade amongst developing countries includes
products that have a higher value added content from Africa than
Davies said commercial vested interest have swamped development interests and Africans find themselves in a serious corner. The critical question is, does the EPA address supply capacity constraints. Not enough headway has been made on this. The EPAs are supposed to enhance this and the devil is in the details, and these details complicate matters further.
we continue to have a dialogue of the deaf with the EU when we present
real concerns, then
There was a favourable response to our request to substantially open up the negotiations on this issue to EU President Baraso at the AU-EU summit, said Davies. We understood that we had his commitment but matters changed in the translation of this commitment as it was not available at the time of the initialling of the EPA agreements.
Abdoulaye Diop, Minister of Economy and Finances,
Many of our countries have national budgets lower than those of the average American university and we face the question of whether we want to stay like that or change. Diop said that unity on the continent was needed as it did not help the continent for each of us to address the EU individually.
ECOWAS as a sub-regional entity should be able to work out alternatives to the EPAs and we need to think collectively on these issues, working with civil society in the North and in our own region.
Marcio B. Cozendey Minister of the Brazilian Economic Department of
Foreign Relations said that
The MFN clause also creates concrete problems for the Brazilian-SACU trade negotiations. While not passing judgement on the EPAs themselves, Carlos said that such a clause would create problems for North-South agreements.
Carlos requested that CSO ask their countries to raise this matter in the WTO and to talk about it as it will cause great difficulty for other countries seeking arrangements with ACP.
also said that the EU was saying that the least developed countries
of the world would get the WTO round for free. They are simply not making
They have received the waiver for 30 years and this is an indication that they do not want to enter into negotiations with poor nations that are not ACP countries to pay compensation for the waiver. This does not have anything to do with the WTO because the EU does not want to follow the WTO procedure that they followed in the past for ACP countries.
Carlos said it is well known that the EU is promoting its Global Europe regulatory agenda (in other countries) and they have made similar demands (as in the EPAs) on customs procedures for European products. Negotiations on competitive regulatory regimes will be a problem for Multilateral Trading System in the future.
Gyekye Tanoh presented the Africa Trade Network (ATN) position on EPAs and said they had repeated the same concerns many times. In some cases the EPA negotiations are marked by bullying and power play and in some cases even bribery. Also the EPAs are not a usual FTA as they are supposed to be developmental in nature.
in the emerging global context they are anachronistic because they privilege
relations with the EU instead of the wide variety of possible partnerships
opposes the EPAs as long as they enshrine reciprocity which the EU insists
means between 80 to 90 percent of all trade with
ATN also rejected free trade and rules on services, government procurement, investment, intellectual property and denied the voracity of any claims to development. The EPAs amount to anything but development, Tanoh said. ATN rejected the EU view that support to mitigate the costs of adjustment is developmental.
The EC has made no real commitment on the question of aid to the ACP and says that about 2 billion euro will be made available. ATN research indicates that this money is simply recycled and is not new.
EPA draft texts seek to establish EPA councils in the sub-regions in
The EU is also imposing regressive tax regimes through the EPAs. The EU demands increases in taxation on the informal sector, which is the refuge of those thrown out of jobs and with subsistence livelihoods. The EU also seeks consumption and Value Added Taxes, which are well known to be regressive. The EU seeks to shift the tax burden away from its corporations to the poorest of the poorest and therefore is categorically rejected.
Jones of Oxfam said that African countries are far more open to international
trade than most European countries.
The debate is not about ACP countries' economies being open or closed, it is about the manner in which they are integrated into the global economy. The ACP has 12% of the world population but only two percent of the income, which has halved over the past two years. Oxfam issued a new report on EPAs at UNCTAD XII.
Studies also show, Jones said, that the outcomes of the EPAs reflect not the level of development of the country but the capacity to negotiate as the less advanced ACP countries open up faster than the poorer countries.
During the discussion session, a representative of the EU said that the ATN discussion was very difficult because the view was that trade does not do anything for poverty reduction. The EU is large donor of aid and is committed to Aid for Trade for which it has committed resources.
Graham of Third World Network Africa called for greater sophistication
from the EU. He requested that they not be paternalistic in prescribing
that they know what is good for
He said that talk of aid is used as a distraction and is used to tell Africans that unless they sign the EPAs their access to European funds will be endangered. There is a lot of this kind of colonial arrogance which treats us as if we do not read or know what is best for ourselves. +