The
climb down of the shady EPAs
By Tewedage Sintayehu
As the planned year for signing the Economic Partnership Agreements
(EPAs) in the Cotonou agreement of 2000, December 2007 was the time
when the final decision of African countries would be made. Accordingly,
African countries that have always been suspicious of the European
Commission’s push to sign the agreements have finally notified
their decision not to do so, at least for now, on the Europe-Africa
Summit held in Lisbon, Portugal a week ago. Though the EPAs were
not among the agenda for discussion in the summit, they constituted
an important part of the Trade and regional integration agenda between
Europe and Africa.
Ever since its onset in Cairo, Egypt in 2000, the Europe-Africa
summit, planned to be held every three years, has been marred with
controversies. Both the 2003 and 2006 meetings never took place
after England called for the abolition of the Zimbabwean leader
Robert Mugabe in relation with the land reform measures he carried
out and the subsequent refusal of African countries not to participate
in solidarity with the African leader. Consequently, it was only
a week ago that the Lisbon meeting materialized.
Diplomatic sources claim that the major reason for the Lisbon meeting,
after years of neglect, is the rising role of China in Africa. Though
China’s role and the Lisbon summit have got political dimensions,
this article intends to deal with the economic aspects only.
During the Lisbon summit Louis Michel, European Commissioner for
Development and Humanitarian Aid, noted that Europe’s 50+
share of the total volume of trade for Africa before 2000 has been
reduced considerably to 31% presently. On the other hand, China’s
volume of trade with Africa has grown five fold in five years to
reach 27%, with the U.S. constituting a share of 29%.
It would not be surprising, considering these figures, that Luis
Michelle has been pushing African states to sign the Economic Partnership
Agreements (EPAs), that have always been controversial, for quite
a long time. Even when European countries like the UK, France and
Sweden showed some sympathy to Africa’s concern towards the
EPAs, he always stood his ground to warn developing African nations
that not signing the agreements would only leave them with normal
WTO rules that strip them off quota and tariff benefits.
The Economic Partnership Agreements (EPA) that were to be signed
between Europe and Africa have always been controversial. Issues
like the impact of the EPA that includes reciprocal market access
agreements between the European Union (EU) and Africa on the latter’s
GDP, levels of employment and other macro economic aggregates have
always been grounds of contention between the two parties. Furthermore,
the welfare implications for African countries from the EPAs and
their effect on trade expansion have created a forum for heated
debates.
Among the reasons for Africa’s decision not to sign the agreements
was the clear supply side constraint on its part. As the EPAs would
lead to more open African markets for European products, European
countries that have generally got strong economies would have the
capacity to use their opportunities optimally. However, opening
up European markets would not be equally beneficial to African countries
as their supply of products to the former’s market would be
tremendously lower. This is because of the lack of capital, infrastructure
and other variables that affect competence to win market share.
High sanitary and health standards of the European Union would also
make things harder for African producers.
Another reason for not signing the agreements was the absence of
clearly stated assistance schemes for capacity building from the
Europeans. The fact that economic aid for achieving the Millennium
Development Goals (MDGs) has not been addressed by the EPAs has
also given the impression for Africans that development issues have
not been well considered.
Up on the refusal of African countries to sign the EPAs, President
of the European Economic Commission announced that the next step
is an interim arrangement that prevents the use of normal WTO rules
on the developing countries of Africa. The LDCs, those that have
a per capita income of less than 400 USD, would not still be affected
even if the interim arrangements to be proposed by the Europeans
face the same fate as the EPAs. That is because the LDCs are beneficiaries
of what are called ‘EBAs’ (Everything But Arms), which
provide them with the opportunity to retain their quota and tariff
benefits.
With the failure of instating the EPAs as a strategic move to ensure
more control over African International trade and recent measures
by the Chinese to open their market more for Africans, the Europeans
seem to have faced a difficult time changing recent trends of their
reduced trade shares with Africa.
The agenda set for the Lisbon Europe-Africa Summit
1.climate change and energy;
2.good governance and democracy
3.migration and development
4.Trade and regional integration
5.peace and security.
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