Time for a rethink

The European commission’s negotiating stance means EPAs were always doomed to failure, argues Glenys Kinnock

A tangled cat’s cradle if not a mangled dog’s breakfast” washow one newspaper described the situation at the close of 2007 at end of tradedeal negotiations between the EU and African, Caribbeanand Pacific (ACP) countries.

It’s a fair description. But of course it wasn’t meant to bethat way. When negotiations on economic partnership agreements (EPAs) began in2000 it was with the best of intentions – to agree WTO-compatible tradingarrangements that would contribute to poverty alleviation, development andregional economic integration. 

Yet as the December 2007 deadline approached, those of uswho had closely followed the negotiations despaired as we saw the processbecome increasingly mired in conflict and contention. From the outset the commissionnegotiators approached the talks on EPAs as if they were conventionalfree-trade area negotiations focused on market opening, rather than as toolsfor development. And so, with the exception of the Caribbean,the agreements were inevitably scaled back, with WTO-compatible interim deals,mainly on trade in goods, signed in haste. Of the 79 ACP countries that tookpart in the talks, fewer than a third agreed interim EPAs by the 31 Decemberdeadline.

Perhaps the biggest casualty of the whole process has beenregional integration. Though it has been reiterated time and time again thatregionalism is a key component of a progressive development strategy, thecommission’s policy of concluding separate deals with individual states, orgroups of countries, has possibly irreversibly splintered ACP regions. InCentral Africa for example, only Cameroon, because of its highvolume of trade with the EU, signed up to an interim EPA. Not surprisingly,this has resulted in friction between Cameroon and other governments inthe regional grouping.

The commissioner blames this clearly limited outcome on NGOsand, indeed, European parliament members like myself. This, I believe, fails torecognise the disquiet and concern that has been most forcibly expressed by ACPgovernments, parliaments and their private sectors, by business people,farmers, trade unions and civil society more generally. Several countriesagreed, at the eleventh hour, but only because they needed to maintain marketaccess. This was particularly the case for non-least developed countries (LDCs)who do not qualify for the EU’s ‘everything but arms’ agreement for duty-freequota-free market access, and who, as a result, were threatened with majortariff hikes and trade disruption if they failed to initial an interim deal.

In response to ACP criticism at the EU-Africa summit,commission president José Manuel Barroso appeared to promote opportunities foradjustments to interim agreements.  Yetthe commission now asserts that this is not, and never was, the case. Thisconfusion must be addressed, not least because the central and west Africa agreement contains explicit reference to thepossibility of adjustment at regional level. Similarly, Namibia hasannexed declarations providing for amendments. Unless these issues arerevisited, it appears that EPAs will end up closely resembling the commission’sambitious bilateral deals, with very few development concerns thrown in.

In order to successfully fulfil its mandate to conclude EPAswith the ACP that are primarily tools for development, building on, andstrengthening the regional integration processes, the EU needs to work on adevelopment friendly and focused package. The international food policyresearch institute has already estimated that full implementation of EPAs in2035 would see EU exports to the ACP increase by €29.4bn, while ACP exportscould fall by €6.5bn.

Let us be clear: economic restructuring to accommodate EPAswill be expensive and needs long-term resources to deal with capacity buildingsupply-side constraints, loss of fiscal revenue and much else. The EU claimsthat recycled money for the European development fund, covering the period2008-13, and pledged at €22.7bn, will be enough to cover both ongoingdevelopment assistance plus additional EPA costs.  The member states promised a further €1bn ayear but I think we can fairly assume since it has not yet been committed, itis unlikely to ever materialise.

Now is the time for the EU to build bridges and work todeliver a fair deal which puts development priorities back at the heart of theissue.  There has to be a moreparticipatory approach, more transparency, respect and understanding for ACPregional and national interests. We urgently need a further opening of EUmarkets to ACP products, particularly agricultural products which are the mainexports for ACP countries. The need for reform on rules of origin must beaddressed, as must EU subsidies that harm ACP producers – particularly onproducts such as rice, sugar, poultry, cotton, fruit and vegetables. We mustalso ensure that there is no attempt made by the commission to pressure ACPcountries to liberalise services, investment and government procurement, norfor the strengthening of intellectual property rights or the inclusion ofcompetition rules within EPAs. ACP countries should not be obliged to negotiatebinding commitments in these areas which are not required for WTO compliance.

These trade agreements between the EU and the ACP areabsolutely critical to the future of the poorest countries in the world. Wemust ensure they are a genuine force for development.