EPA divides AU

AfricaNews | Saturday 2 February 2008

EPA divides AU

Francis Ameyibor, Special Correspondence, Addis Ababa

The Controversial Economic Partnership Agreements (EPA) has divided the African Union (AU) as the Heads of State and Government attending the AU Summit are yet to take a decision on the issues.

Deliberations at the 10th AU Summit on the theme; «Industrial Development of Africa, » established that Europe is using its unequal bargaining power in the negotiation process to push its controversial vision of development.

The EPAs, essentially free trade agreements, which the European Union (EU) is currently negotiating with 76 of its former colonies in Africa, the Caribbean and the Pacific (ACP).
It envisage the creation of a free trade area between the EU and ACP countries, in which there are no duties on goods imported and exported between these countries.

According to statistics made available to the AfricaNews at Addis Ababa, which focuses on sub-regional levels, only Ghana and Cote d’Iviore had initialled the EPA, whiles; Benin, Burkina, Cape Verde, Gambia, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania,Niger,Nigeria, Senegal, Sierra Leone, and Togo opposes it.

In Central Africa, only Cameroon had signed as against Chad, Gabon, CAR, Sao Tome, Equatorial Guinea, and Democratic Republic of Congo (DRC) are undecided.

In the Southern Africa, South Africa and Angola are undecided whiles Botswana, Lesotho, Mozambique, Namibia, and Swaziland have initialled the agreeement.

In East Africa, Djibouti, Eritrea, Ethiopia, and Sudan are undecided, whiles Burundi, Kenya, Rwanda, Uganda, Tanzania, Zimbabwe, Seychelles, Mauritius, Madagascar and the Comores have signed.

According to African Economist Experts and civil society activists Europe has failed to appreciate the socio-economic and political philosophy underpinning regional integration processes in Africa.

Speaking at the 11th Pre-Summit Conference on the Industrial Development of Africa, the Gender Perspective, Mr Mouhamet Lamine Ndiaye, Pan Africa Head of Economic Justice said the EPA Proposal to cut tariffs would undermine food security and weaken infant
industries in Africa.

The African Women’s consultation on Darfur was organised by the Geneva-based Femmes Africa Solidarité in the margins of the 10th African Union Summit, with the support of the African Center for Gender and Social Development of the United Nations Economic Commission for Africa (ECA), the Women, Gender and Development Directorate of the African Union Commission and the UK DFID.

Mr Ndiaye said the New intellectual property rules would limit African countries’ access to educational materials, technology, and seeds for farmers, and the new rules on government procurement would also hinder governements from using their expenditures to stimulate local industries.

Mr Ndiaye explained that EPA’s new rules on services would reduce people’s access to critical services such as banking, telecom and make African countries more vulnerable to financial crisis.

« The EPA have not examined the cost of liberalisation on women in term of physical resource, human resource and social capital, » the Economic Experts stated.

Estimates also from the Commission for Africa suggest that an additional $10-20 billion per year is needed for African countries alone to be competitive in the global market under EPA.

Whiles Europe’s estimated funds from the 10th EDF (2008-13) and pledge at Euro 22.7 billion will be enough to cover development assistance plus additional EPA adjustment cost.

During the last five-year cycle (2000-07) the EU promised Euro 15 billion in aid to African Caribean and Pacific (ACP) countries, but sadly to not only 28 per cent had been disbursed.

European American corporations own 97 % of all patent and the vast majority of copyrights and trademarks, yet, there is no obligation under Art. 24 of the GATT for IP to be included in EPA.

Moreover, according to Mr Ndiaye, for 39 ACP countries Europe’s proposal would be entirely new obligation since the are LDCs and not subject to any World Trade Organisation (WTO) rules on IP until 2013.

The effect on education would be expensive in Africa, citing the situation in Mali where a student would be forced to pay five percernt of his/her yearly income for one textbook, which is equivalent to asking a European to pay Euro 1,363 for a single book.

On services, African economic experts expressed reservation that opening up the services sector to foreign investment can contribute to development, however, if liberalised in the wrong way the impact can be negative.

For exemple, Mexico liberalised its financial sector under NAFTA, but lending to Mexican businesses has dropped from ten percent of GDP in 1994 to 0.3 percent in 2000.

Europe’s proposals include a request for so called ‘national treatment’ in all sector. Europe is proposing restrictions that would prevent African countries from taking measures in the financial sector.

No differential treatment, no regulation of capital flow Mr Ndiaye said Government Public Procurement practices can be used to direct expenditure at locally produced materials or to achieve industrial development, it constitutes between 10 to 20 percent of GDP in developing countries.

The level of expentiture and the attempt to direct the expenditure to locally-produced materials is a major macro-economic instrument, especially during recessionary periods.

On alternatives to EPAs, the African Economics Experts said everything but Arms (EBA): is available to all Least-Developed Countries (LDCs) and provides duty-free, quota-free imports of all products except arms.

Whiles Generalised System of Preferences (GSP) is available to all countries and provides better tariffs but it is not as good as the Cotonou agreement.

GSP Plus is currently available only to certain developing countries, but could be expanded to immediately allow ACP entry. It is much better than the GSP standard, they noted.

On the Gender Dimension, Mr Ndiaye said women who are already locked into the lowest paid work with the least statutory protection and benefits would experience the worse form of deprivation as even though employment may increase, the quality of that employment would poor.

Labour rights are thus violated while factories are given tax holidays at the expense of providing real livelihoods and permanent employment to women workers.

“Women are subject to competing with poorly paid contract workers abroad as the move to ‘outsourcing’ continues as seen in the notorious Export Processing Zones [EPZs] operating in the South;” Mr Ndiaye stated.

Earning an income externally to the household can lead to greater empowerment for women however, trade liberalisation can also lead to unemployment and the restructuring of labour markets - a situation that tends to affect poor and marginalised groups of women more than men.

In fact, occupational and wage segregation is widening and bad working conditions are rife in many export industries. Access to education, health care and other basic services is often truncated through trade liberalisation.

As such there is often less to spend at household level so the role of social reproduction in terms of providing care, gathering fuel and food etc is brought upon the women and girls.

Where choices are made about whether to send the boy or girl child to school, most communities and families favour the boy. The ‘care economy’ meanwhile remains unregulated and unsupported; The diminishing of women’s role as custodians of traditional knowledge and bio-diversity has been well documented and bears
restating in the wake of the GMO assault and the threat to food sovereignty;

Cheaper goods come onto national markets from overseas, affecting existing indigenous producers but also providing cheaper options for consumers many of whom are women who manage diminishing household budgets.

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source: AfricaNews