No amount of EU money can right the wrongs of proposed EPAs
The Times (South Africa) | Dec 16, 2007
No amount of EU money can right the wrongs of proposed EPAs
Why should South Africans be interested in the Economic Partnership Agreements (EPAs) due to be signed between the European Union (EU) and African, Caribbean and Pacific countries by December 31 this year?
Why are the prophets of profit whining because South Africa has not yet signed an agreement that could have far-reaching implications not only for us, but for the entire African continent? Europe’s EPA agenda poses a grave danger to the people and economy of South Africa. Our government will suffer huge losses of revenue, because it derives a substantial portion of tax revenue from duties on imports from Europe, a major trading partner. Cheap and often subsidised European products will flood our market, displacing domestic products and deepening the crisis faced by domestic producers, leading to further loss of jobs and livelihoods. South Africa will be deprived of overall policy space and of key trade and investment policy instruments to support national investment and production in our economy.
The EU’s agenda for the EPAs requires that all the countries in Africa, the Caribbean and Pacific - known as the ACP - must open up their economies, across the board, to free entry of European goods and operation by European invest ors.
The EU is demanding that these countries must eliminate all duties on up to 80% of agricultural and industrial products imported from Europe; that governments in ACP should allow European investors free access to any sectors of their economies; and that these governments should not give preferences to domestic investors over European investors. Could it be that this so-called economic partnership disguises the EU’s intention of using the EPAs to enable European firms to have greater access to South Africa than they have under the free-trade agreement concluded between the EU and South Africa in 1999? The EU side has gone so far as to advocate that tariffs levied by South Africa on a wide range of goods should be removed. The EU’s promises to address the so-called "supply side constraints" and provide funds to meet the "adjustments costs" of EPAs are empty and have been contrived to lure our country into the one-sided negotiations.
Instead of specific pro-development policy measures, based on the actual imperatives of our economies, the EU insists that the free-trade agenda it is proposing is enough to bring development.
The €2-billion which the EU has touted with fanfare as support for EPA countries has essentially been an accounting gimmick, with little more than €700-million actually available to be shared among the 78 ACP countries. In any case, it is now widely accepted that EU money, however generous, can never put right the fundamental wrongs of the EPAs. EPAs will undermine Africa’s own agenda for regional integration as the continent’s different regional economic communities are transformed into separate European free-trade areas that deal directly with Europe rather than with each other, and with European goods and investors replacing those from the different African regions, dealing further blows to the already fragile inter-Africa trade and investment. If this partnership is mutually beneficial to all parties, why are top European Commission (EC) officials such as Peter Mandelson seeking to create divisions between South Africa and its
neighbours in talks aimed at establishing a free-trade deal? In addition to these threadbare promises, the EC has resorted to blackmail and disinformation. It has threatened countries not willing to play along with cuts in aid, while promising "incentive tranches" to those willing to ignore their own concerns and meet the negotiating deadline. EC officials are touring different countries, threatening exporters with loss of export markets in the EU if the EPAs are not signed by December 31.
Rather than change tack, the EU is persisting with its agenda, changing only its rhetoric. African governments, in turn, seem to have been disproportionately influenced by dependence on aid and concerns about export preferences into the EU. Most disappointing, many African government are accepting Europe’s negotiating terms and parameters, discarding their own publicly stated individual and collective positions.
Both sides of the negotiations continue to be silent on the clearly available alternative on which a more just relationship - consistent with the developmental needs of African countries and the continent - could be based.
Reporting on the EPAs, the editors of Pa m - bazuka News state that "behind the herd of acronyms, obscure economic jargon and polite euphemisms lies a pernicious programme that threatens to subjugate the economies of African, Caribbean and Pacific countries to the needs of European capital. In a political
dimension, this has meant a true territorial conquest of the South by the North, without any apparent military conflict ... but in the name of the sacrosanct concepts of ’development’ and ’interdependence’."
What the prophets of profit do not understand is that Africa’s development can only be achieved on the basis of a strategy driven by the needs and priorities of the African people. This principle must be the basis for any relationship with the EU. It should not be bargained away, as is being done in the EPAs, for continued access to the EU market, especially when there are credible alternatives to ensure that market access.
