EU Stands to Increase Market Share in Africa With EPAs

EU Stands to Increase Market Share in Africa With EPAs

Inter Press Service (Johannesburg)
NEWS
26 January 2008
Posted to the web 26 January 2008

By Julio Godoy
Paris
While the real impact of the economic partnership agreements (EPAs) on the economies of African, Caribbean and Pacific (ACP) countries will be “small”, the pace of negotiations and of the liberalisation of their markets is too fast and will damage their economies, according to numerous French economists and development experts.

“The main problem with the EPAs is that the European Union wants to go too fast with the negotiations, too fast with the regional integration in the ACP group, and too fast with the market liberalisation in there,” says Bénédicte Hermelin, research director at GRET, a Paris-based umbrella organisation of international cooperation groups.

The EPAs, supposed to take effect as of January 1, 2008, propose to create a free trade area between Europe and the 79 ACP signatories of the Lomé Convention. The convention goes back to the 1970s.

EPAs are part of the Cotonou agreement — a much wider agreement signed between the European Union (EU) and the ACP countries in June 2000 in the capital of Benin. It covers aid, trade and political cooperation between the two groups of countries.

The Cotonou agreement replaced the Lomé convention, which gave ACP countries special access to sell certain products in European markets.

EU officials defend the EPAs as trade and development tools, as Peter Mandelson, EU commissioner for trade, has put it. In a speech on January 20, 2005, Mandelson described the EPAs as “potentially a crucial, hugely positive contribution that Europe can and must make to trade and development” in Africa.

The EPAs’ “purpose is the successful integration of the ACP economies in the global economy — and by that I mean putting the ACP on a ladder of prosperity that ends the grinding poverty which is the daily experience of so many ACP citizens,” Mandelson said.

But numerous ACP governments and European non-governmental organisations oppose the EPAs, for they consider them an instrument of “European economic neo-colonialism”, which would destroy these low developed economies by forcing ACP countries to open their markets to subsidized agricultural goods from Europe.

However, says Hermelin, at least regarding agriculture, “for Africa, the imports of poultry from Brazil are more dangerous than those from Europe”. Similarly, she says, Africa will need to import milk from Europe “still for a long time, until its milk production can satisfy the local demand”.

Other experts believe that the EPAs will strengthen Europe’s trade position in Africa at the cost of inter-Africa trade.

“If African coastal countries, such as Senegal, completely open their markets to European agricultural products, then the Saharan countries producing livestock will lose their market shares in those neighbouring countries,” Benoit Faivre-Dupaigre, an economics researcher at the French Institute for Research on Development, told IPS.

Like Hermelin, Faivre-Dupaigre denounced the pace of negotiations on the EPAs imposed by the EU. “This fast-track liberalisation contradicts the experience of industrialized countries, which needed decades to build up their domestic markets before they opened them up to international competitors,” he said.

According to a study by the Paris-based Research Centre in International Economics (CEPII, after its French name), the impact of EPAs on ACP economies would be negative, if small.

On the one hand, the liberalisation of trade with the EU would represent a 22 percent growth of imports from Europe. But, if 20 percent of these new imports are blocked by the “sensitive products” clause, that growth would fall to 16 percent, representing some 3.5 billion euros in new imports from Europe.

However, these new imports from Europe would substitute goods the ACP countries presently bring in from the U.S., Brazil, China, Japan and other countries, thus reducing the new trade debit balance for the ACP countries to 1.8 billion euros.

As the CEPII notes, given that the ACP countries imported a total of 102 billion euros in goods and services in 2005, that new deficit is insignificant.

More important is the ACP custom revenues loss due to EPAs, as estimated by the CEPII. These losses could go up 3 billion euros per year for the ACP countries, with individual impacts going on from five to 35 percent of the state budget.

In the cases of the poorest countries, such losses can be of enormous importance for states almost deprived of income, notes the CEPII.

Such data lead Roger Blein, French development advisor for the Economic Community of West African States (ECOWAS, a regional group of fifteen West African countries), to believe that “even if the impact of the EPAs would be modest, it is clear that the EU is trying to expand its market share in the ACP countries.

“When the European Commission says that Europe does not have any economic interest in the EPAs negotiations, it is lying,” Blein added.

In general, French critics of the EPAs recall that while the EU farmers do enjoy of massive subsidies — some 50 billion euros in 2005 — small agricultural producers in the ACP do not.

The French group ATTAC, for instance, argues that these subsidies for European agricultural goods already encourage overproduction and, if added to so-called free trade agreements such as the EPAs, will also promote export dumping.

This will lead to the destruction of livelihoods in developing countries, representing a real and palpable menace for those countries’ “food sovereignty”.

ATTAC stands for Association for the Taxation of Financial Transactions for the Aid of Citizens and opposes neoliberal globalisation in general, from the World Trade Organisation to the policies of the World Bank and the International Monetary Fund.

In a position paper published last December, ATTAC recalls that the production of tomatoes in Ghana was affected by the structural adjustment programmes imposed by the International Monetary Fund in the 1980s and 1990s. “The import of tomatoes skyrocketed, from 3,600 tones to 24,000 tones,” ATTAC says in its paper.

This growth in imports led to “weakening of the Ghanaian farmers, traders and the food processing industry in the country”. EPAs would launch a similar process in the whole of Africa, ATTAC claims.

Removal of Trade Tariffs Not Solution for Continent

Removal of Trade Tariffs Not Solution for Continent

New Vision (Kampala)
OPINION
28 January 2008
Posted to the web 29 January 2008

By John Ssempebwa
Kampala
REFERENCE is made to the article titled “African Governments Should Remove Trade Tariffs”, published in The New Vision, January 9. Removing trade tariffs is no solution to Africa’s problems; it cuts government revenue, worsens trade deficits and poverty. In May 2007, the Uganda Revenue Authority (URA) collected sh228b of which sh122b was from imports.

Without import duties levied, especially on finished goods that are also produced in Uganda and ostentatious goods, how will government fund roads, hospitals, drugs and arms without donors?

Whereas Europe can depend on indirect domestic taxes levied on red light districts, casinos, tobacco and alcohol, Uganda cannot remove import duties because its per capita income is less than $400 meaning that less than 1% of all Ugandans have entered a casino.

Uganda has an increasing trade deficit of sh$1.4b. Trade deficits cause massive lay offs as imported goods subject domestically produced goods to competition, forcing sub-optimal capacity utilisation and laying off workers.

This malignant tumour in the Ugandan economy is the reason why impressive growth rates have not translated into better welfare for many Ugandans (Gross Domestic Product is an inverse function of the trade deficit).

Removal of import duties will encourage consumption of imports, worsen the trade deficit, jobs will be lost and markets for agro produce will dwindle. Poverty will worsen.

Before import duty is removed, consumers should have sufficient purchasing power to spend and pay indirect taxes without the consumer feeling the tax burden. This requires industrialisation. In fact, Europe’s industrial development was shaped by fierce protectionism called “Fortress Europe” during which Britain levied an average tariff of 32%, France developed its current agricultural protective system, Bismarck dumped the German Free Trade Policy and average industrial tariffs stood at 19% in Europe.

More so, Intra-African trade liberalisation needs a cautious approach since the EU has already signed free trade areas with leading African economies such as South Africa and Egypt.

Removing tariffs on goods from South Africa in the absence of appropriate rules of origin means offering the EU duty free market access to Uganda yet “EU” has no offensive trade interests in Uganda. Why offer a lift to a rich man who has several Rolls Royces?

The principle of asymmetry has to come into play when discussing removal of trade tariffs and any other trade controls in Africa. Some countries are at higher levels of development because of advantages bestowed upon them by European colonial masters. Full and immediate liberalisation of trade with such countries can only mean jobs lost in Uganda.

In lieu of liberalising Africa’s trade, if the EU is interested in enabling Africa to benefit from world trade, the EU must compensate Africa for the damaging effects of liberalisation implied in the Economic Partnership Agreements.

Africa’s true allies will not be those who impose liberalisation but those who help Africa adjust to the liberalisation by solving its supply side constraints, for example, building the big dam in neighbouring Congo (The dam could reduce the cost of power in Central and Eastern Africa by 50%), building an alternative route for Uganda’s imports through Tanzania.

These projects have been identified by Africa and are contained in the development matrix of the Economic Partnership Agreements Negotiations.

It is unfortunate that the EU agrees to the development matrix but hates a detailed one that identifies the costs and exact projects. Africa seems to know its problems better now. Liberalisation is surely not the solution to our problems.

The writer is the Director of Trade at the Private Sector Foundation

EU Trade “Deals” for Africa under Attack

Oxfam Warns Continent About EU Trade Deal
Business Day (Johannesburg)

NEWS
28 November 2007
Posted to the web 28 November 2007

By John Kaninda
Johannesburg
LONDON-based charity Oxfam has warned African countries not to rush into signing the European Union (EU) Economic Partnership Agreements (EPAs) in their present form as this would result in opening up the continent’s markets to EU trade “too fast and too deeply”.

The institution feared that the move would at the same time expose vulnerable African farmers and fledgling industries to unfair — often subsidised — competition from Europe, said Luis Morago, head of Oxfam’s EU Advocacy Office.

The call was made after Botswana, Lesotho, Mozambique and Swaziland on Friday initialed a free trade agreement with Europe. SA and Namibia are yet to sign the agreement.

Morago fears that in the next few weeks other regions could give into pressure from the European Commission to sign deals before the end of the year .

“Countries are being placed under enormous pressure to sign deals before the end of the year that could cause significant damage to their economic prospects.”

Morago said: “They are being asked to trade off the interests of their exporters — who will see a hike in tariffs from January 1 if no deals are signed — against the livelihoods of some of their most vulnerable subsistence farmers and industries.”

He said the latter would face competition from Europe if the tariffs were taken down.

“It suits the commission to spread the impression that regions are falling into line and others should do so too.

“But we would urge developing countries to take heed of the range of voices raised against these deals — from the World Bank to trade lawyers to civil society and trade unions — and resist the pressure .”

If African countries remove the majority of tariffs on imports, they will face massive losses of government revenue, potentially jeopardising spending on health and education, Oxfam said.

The body also believed that the negotiations were undermining critical regional integration processes. The EU Commission has said that it was obliged to finalise free trade deals by next month according to the World Trade Organisation (WTO) rules.

However, Oxfam has argued that the existing preference scheme, known as GSP+, could be extended to ACP countries to guarantee continued access to EU markets in the absence of a new deals, or the waiver granted by the WTO could be extended.

GSP+ is a new single scheme that covers — for the period 2006-08 — approximately 7200 products that can enter the EU duty free from vulnerable countries. However, these are reserved for countries whose governing principles accept the main international conventions on social issues, human rights, environmental protection and good governance.

The deal initialed between southern Africa on Friday covered trade in goods only.

It lacked a lot of significant information, including how many tariff lines would have to be cut, by how much and the percentage of trade that could be exempt . The full offers are due to be exchanged on December 6 and the deal will need to be signed by ministers and then ratified before it is final.

Last week, there were suggestions that East Africa had signed a deal. This turned out to be untrue but countries are under a lot of pressure to agree to sign before the end of the year to protect their existing export business .

EPAs Under Fire From European Parliamentarians

EPAs Under Fire From European Parliamentarians
Inter Press Service (Johannesburg)

NEWS
30 November 2007
Posted to the web 30 November 2007

By David Cronin
Brussels
No fanfare was made in Brussels in the past week over European Union officials’ breakthrough in the trade talks on economic partnership agreements (EPAs) with almost 80 African, Caribbean and Pacific (ACP) countries.

For, while interim deals have been reached with nine countries, doubts persist over whether a full range of accords can be secured before a December 31 deadline set by the European Union (EU).

Five East African countries – Kenya, Uganda, Rwanda, Burundi and Tanzania – signed an agreement with the EU on November 27. A few days earlier, the Southern African states of Botswana, Lesotho, Swaziland and Mozambique gave their assent to a similar deal.

The EU’s executive, the European Commission, claims that its offer in the EPA negotiations is the most generous ever proposed as part of trade talks. The ACP, it says, would be allowed to sell their goods free of duties or quotas to the EU from next year. Sugar and rice would be the only exceptions.

This has done little to assuage the concerns of anti-poverty activists, who point out that any gains from greater exports to the EU could be eclipsed by the damage done by the largely reciprocal market openings that ACP countries would have to undertake.

These would allow subsidised European food products, with which local producers would be in no position to compete, to effectively swamp the ACP markets. Under the interim deals with East Africa, for example, taxes on two-thirds of imports from the EU would be eliminated.

Although the Commission has given assurances that the EPAs will be a tool for promoting regional integration in Africa, its critics argue that its tactics could be undermining that objective.

The interim agreements with Southern Africa have been reached, without South Africa or Namibia yet on board, although Angola has signalled it could soon join an agreement.

And in negotiations with a West African regional grouping, the EU side has indicated it may sign a separate deal with Ivory Coast without its neighbours. Both the West and Central African groupings in the talks have not yet presented the Commission with formal offers on questions of market access.

Glenys Kinnock, a veteran member of the European Parliament (MEP), said she had “never encountered the kind of pressure that the ACP has faced during these negotiations”.

Accusing the Commission of “intransigence and lack of flexibility”, she argued that it is “threatening regional integration and causing regional tensions”.

Ján Figel, a member of the European Commission, said this week that EU officials have taken “a pragmatic and flexible approach”. Nonetheless, Figel, who was deputising for Trade Commissioner Peter Mandelson, warned ACP governments that they risk having considerably higher taxes imposed on their exports to the EU if they do not conclude EPAs by the end of the year.

But Marc Maes, a trade specialist with Belgian anti-poverty group 11.11.11, said that the Commission had hardened its position during the negotiations.

Whereas it had indicated that ACP countries would be allowed a 25-year transition period for opening up their markets to most European imports, this period has been shortened to a maximum of 15 years in many cases. “The Commission has been moving the goalposts,” he told IPS.

He noted that EU governments earlier this month issued a call to the Commission to display flexibility in the talks. “The Commission has not offered maximum flexibility,” he said. “It has been constantly raising the stakes.”

The international non-governmental organisation Oxfam’s Luis Morago said: “The way these negotiations have been conducted so far is inimical to development.

“Countries that are massively dependent on the EU as a market for their goods and as a major aid donor are being told they must either sign deals now that involve drastic liberalisation or face an increase in tariffs from January next year that would devastate their export industries. This is not fair negotiation but brinkmanship.”

All of the deals signed this year are expected to be limited to trade in goods. Negotiations aimed at expanding the EPAs to cover investment, competition, services, public procurement and intellectual property could continue into 2008.

Although many ACP countries have been opposed to having negotiations that cover such an extensive range of issues, the Commission only agreed in October to restrict discussions for the remainder of this year to trade in goods.

In an exchange of views with Figel, the German Green MEP Frithjof Schmidt said: “It is astonishing to hear you talking about the negotiations as though everything has gone well for the Commission.

“In truth, the negotiations have been overburdened by the Commission. The ‘goods only’ announcement was a confession of the Commission’s failings and it was too little, too late. Your strategy has been a mistake,” Schmidt said.

French Socialist Harlem Désir argued that the EU threat of increasing tariffs on ACP goods in the absence of agreements is a “type of blackmail”.

Helmuth Markov, a German left-wing MEP, branded the EU’s tactics as “a catastrophe”, arguing that the overriding concern of officials was to prise open ACP markets to Western businesses.

“Partnership means respect,” he said. “When we Europeans can still have an attitude of ‘take it or leave it’, it has nothing to do with partnership.”

EU Gets NO DEAL On EPAs in Kigali Round

No Deal On EPAs in Kigali Round
The Monitor (Kampala)

NEWS
27 November 2007
Posted to the web 26 November 2007

By Robert Mukombozi
Kigali
THE 14th Kigali round of the African, Caribbean and Pacific and European Union members concluded with nothing tangible over the controversial issue of Economic Partnership Agreements.

After nine days of intensive negotiations, ACP countries maintained that they needed more time to negotiate a deal on the ACP-EU EPAs for which a World Trade Organisation waiver expires at the end of 2007.

The EU has been asked to urgently consider shifting deadlines.

“We urge the European commission to acknowledge that more time is needed for ACP states to assess the implications of the agreements proposed, given that negotiations have only taken place in earnest for the past to years,” reads the Kigali declaration adopted by the ACP-EU Joint Parliamentary Assembly.

The ACP states also declared on November 22 that they have been put under pressure by the European Commission to sign an EPA and that this was against the spirit of the two blocks partnership.

HITCH: The Manager of Legal and Bonds Customs Department, Mr Nicholas Kanabahita (R), and Comesa Senior Insurance Expert Berhane Giday (L) at a recent ceremony. File photo

Actually they have made their position clear on the matter that agreements reached whether interim arrangements of full EPAs, must ensure that no country is left worse off after the expiry of the negotiation deadline.

While the ACP group rallies for the future consideration of the deal, the EU says its signing is timely.

Amidst the protests, Ms Glenys Kinnock, the co-president of the ACP-EU Joint Parliamentary Assembly said a new deal was possible.

Ms Kinnock says that the attempts to frame such agreements had proven difficult, largely because the commission negotiators had approached the talks on EPAs as if they were conventional free trade negotiations focused on market opening, rather than as tools for development.

However, the ACP declined to bow to the EU’s “coated plea”.

In fact, the Commission threatened to cut aid extended to these “notorious states”.

The EC Commissioner for development and humanitarian aid, Louis Michel told participants at the closure that they needed to be more careful because they are ready to invest all there is to move the EPA.

He also said that Europe would concentrate on “promoting sustainable development” using “substantial means to accompany the EPA process”.

In this regard, Mr Michel indirectly implied that they would finance under the European Development Fund (EDF) package to influence the ACP states to comply.

The EU has committed funds amounting to over two billion Euros as aid for developing countries would be tailored to governance programmes and economic reforms in their interest.

But the ACP was not moved.

The member states ignored the EU threats and unanimously agreed to suspend further negotiations on the matter of signing the EPA deal, probably, until when EU is ready to listen to their demands.

This declaration follows the Cape Town agreement of 2002, adopted at the start of the EPA negotiating process.

Meanwhile some developing countries have warned at this Kigali round that they will never sign EPAs in their current form. The official position of most countries, however, is-that development -friendly EPA- is the objective and so far there has been no real discussion about alternatives to EPAs. It was a job abandoned for NGOs among other trade activists on the sidelines.

EU – African EPA Trade Negotiations Extended

Citizens Need a Fair Deal in EU Trade Treaty
The New Times (Kigali)

NEWS
29 November 2007
Posted to the web 29 November 2007
Kigali
The East African Community (EAC) clinched a deal with the European Union (EU) which allows for a continuation of negotiations on trade partnerships between the blocs.

This gesture comes just weeks after member states within the Africa Caribbean and Pacific (ACP) grouping met here in Kigali and asked for more time to study the new trade deals known as the Economic Partnership Agreements (EPAs).

Unfortunately member states within the ACP have only a month to decide whether to adopt the EPAs or the Europeans would impose higher tariffs as a consequence.

There is a feeling among many African negotiators that Europe is using the excuse of the World Trade Organisation (WTO) rules to rush the negotiations.

While we appreciate the urgency with which EAC handled the matter by signing a provisional deal with the EU on Tuesday, our leaders in the regional community should not hurry to bow to the mounting pressure.

An analysis done on the potential impact of the EPAs prepared by the United Nations Economic Commission for Africa (UNECA) shows that the proposed opening up of 80 per cent of trade of the EAC with Europe, will result in loss of tariff revenue of up to $130m per year.

Rwanda and a number of other African countries have already introduced 100 percent customs tariff waivers on commodities originating from certain regional communities. Already billions of Francs are being lost through this process although there are certainly significant benefits that accrue from regional communities.

Now with EPAs, it means that the already struggling African producers will have to compete directly with their European counterparts who hitherto enjoy subsidies.

Any hurried commitment by developing nations would subsequently see our economies undergoing significant dislocations with regional trade losing ground at the expense of European imports.

It is equally important to note that Africa’s exports to Europe are nowhere close to match what Europeans export to Africa.

That is why leaders of developing countries shouldn’t scatter their efforts by splitting themselves into geographical locations, but rather devise a common approach in their negotiations with the EU.

As our leaders travel to Lisbon next month for the EU-Africa Summit, they should be able to advocate for a poor African producer whose efforts could be shattered in the face of stiff unfair competition.

ACP States Reject EU Trade Ultimatum

ACP States Reject EU Trade Ultimatum

The New Times (Kigali)
NEWS
15 November 2007
Posted to the web 15 November 2007

By Edwin Musoni
Kigali
The 10th ordinary session of the parliamentary assembly of African, Caribbean and Pacific (ACP) countries has rejected the European Union’s call for the group to sign the Economic Partnership Agreements (EPAs) by December 31.

In a meeting in Kigali yesterday, ACP member states decided not to bow to the EU pressure, insisting that they were not ready to enter a new trade agreement.

Consequently, they drafted a document titled ‘Draft Kigali Declaration” which is due to be presented to the 14th session of the ACP-European Union joint parliamentary assembly in Kigali on Friday.

The declaration urges the European Commission to give the ACP countries more time to assess the implication of deal before signing.

Rwanda’s Senate Vice President, Prosper Higiro, said that ACP countries still need more time to study the deal before endorsing it.

“The EU is putting us under pressure to sign this agreement before we are ready for it but we have decided to reject it until all ACP countries are ready,” Higiro said.

He added: “The EU is under pressure from the World Trade Organisation to have these agreements, so they have decided to transfer the pressure on us; members have agreed not to sign the agreement until all ACP states are ready for a new trade deal with the EU,” he said.

The EU has threatened to increase tariffs of its export goods by January 1, 2008 should ACP members refuse to comply.

The declaration indicates that such a threat would affect lives on millions in ACP countries.

Meanwhile, the ACP co-chairperson, Senator Jean Marie Everistus, said: “There is a big possibility that the EU will reject our report but if they do, then will we have to elect and go by the vote of the majority.”

Everistus, who is also the Deputy President of Saint Lucia Senate, however added that majority of MPs in EU member states understand the position of ACP states.

But the Kigali declaration hails the European Commission’s decision in April this year for quota free market access that waived residual market barrier to ACP exports.

EU Will Be the Main Beneficiary of the EPAs

‘EU Will Be the Main Beneficiary of the EPAs’

Inter Press Service (Johannesburg)
NEWS
15 November 2007
Posted to the web 15 November 2007

By Francis Kokutse
Accra
If Ghana’s government used civil society protests as guideline as to which way to go in the negotiations with the European Union (EU) on the economic partnership agreement (EPA), the talks would have been terminated.

The message to the government has been clear: the EPA will not improve trade between the country and its European trading partners. Unfortunately, governments do not always consult their people in such matters.

Civil society has shown clearly where it stands when it comes to the EPA currently being negotiated between the EU and, among other groupings, the Economic Community of West African States (ECOWAS).

In its present form, the EPA will lead to the loss of livelihood for most peasant farmers, Mohammed Adam Nashiru, president of the Ghana Trade and Livelihood Coalition Campaign (GTLCC), told a recent meeting of peasant farmers organised by the GTLCC in Tamale in the north of the country.

Some 60 percent of Ghana’s workers are in the agricultural sector, which is the main source of livelihood for Ghanaians and supplies 35 percent of the country’s gross domestic product (GDP).

Nashiru referred to a study by the United Nations Economic Commission for Africa which has estimated that Ghana would lose revenue equal to eight percent of its GDP. He identified the poultry industry and tomato factories as those most at risk to be negatively affected if the EPA were to be implemented.

The country’s industrialists, organised under the auspices of the Ghana Association of Industries, are also applying pressure on the government.

The executive director, Cletus Kosiba, told IPS in an interview in Accra that “we are not opposed to trade liberalisation. We are aware that liberalisation has its positive side. However, our main concern is the way liberalisation is being handled under the EPA negotiations”.

Kosiba said Ghanaian industries are not in any position to compete with their European counterparts because of the challenging conditions under which they operate.

“There is a need to improve the competitiveness of the country’s industries. This would help us benefit from any liberalisation regime. This would require some support to the local industries to expand their capacity,” he added.

Kosiba said the negotiations should be postponed for three years. This extra time should be utilised to create structures that would help build the capacity of industries and improve conditions. This will enable African countries to take advantage of the opportunities that the EPA liberalisation regime may offer.

“Until this happens, any attempt to impose wholesale liberalisation, as envisaged under the EPAs, will only kill infant industries,” Kosiba said.

He mentioned the fruit processing industry as an example. In its present form, there is no way that the exporters of processed pineapple could compete with their European counterparts because of their cost structure. Pineapples are one of Ghana’s top exports.

Kosiba also cited the influx of Chinese goods into the country and said this has posed a significant threat to the survival of the country’s industries. The government has not been able to do anything about this, he said. “Therefore, any further opening of the Ghanaian market will amount to nothing less than killing struggling industries.”

In spite of these protestations, Ghana’s President John Kufuor seems unsure as to which position to adopt on the EPA. He has given mixed signals about the country’s position on the negotiations.

Addressing the United Nations General Assembly in September in New York, Kufuor asked the EU to give Africa enough time to think through the EPA before appending their signatures.

The one exception has been cocoa exports. Cocoa is Ghana’s main export and any upset in cocoa production would greatly affect the country. Thus, in an address in Accra on October 12, Kufuor told cocoa producers to unite against the imposition of tariffs on cocoa products to the European countries.

Addressing a meeting of ministers from countries that belong to the Cocoa Producers Alliance (COPAL) he said, “speaking against the imposition of tariffs would be one of the surest ways of ensuring sustainability of the cocoa industry”.

If the EPA were not signed by Ghana, 30 percent of the country’s exports, including cocoa butter and paste, would face stiff tariffs, according to a report written by Oxford University researcher Mayur Patel for the Realizing Rights Ethical Globalisation Initiative.

The Trade Union Congress has asked Kufuor to state his position clearly. Secretary general Kwasi Adu-Amankwa said Ghanaian workers do not want any agreement with Europe that would further devastate an already ailing industrial sector.

Adu-Amankwa does not regard the EPA as an answer to the continent’s problems. “Rather, it is a tool for re-colonising us.” The main beneficiary of the EPAs would be the EU and “the people of Africa would lose even the little that they have achieved so far,” he added.

He has used every opportunity over the past few months to call on the government to resist “EU pressures and manipulation to sign the agreements”. For Adu-Amankwa, the EPA holds far-reaching negative implications for domestic production.

He warned that Ghana and, for that matter, Africa as a whole, stands to lose when the EPA comes into force.

Among other concerns, the EU has been pushing for the inclusion of government procurement in the EPA to enable their suppliers to outbid local suppliers and further bleed the ailing West African economy, Adu-Amankwa argued.

The deputy minister of trade, Kwaku Agyeman Manu, has said that the EPA should provide a mechanism to enable Africans achieve their development goals.

“We need an EPA with true development provisions built into it to ensure that the EU’s promises of making the EPAs function as development tools, are translated into commitments that can be fulfilled.”

Manu said Africans “can only take advantage of the market opening opportunities and ensure that the EPA, indeed, becomes a development tool,” if the final outcome of the negotiations is the building of “our productive capacity, competitiveness and industrial upgrading as well as the enhancement of our integration process”.

EU Fragmenting Regional Blocks With EPA’s

EPA Fragmenting Regional Blocks
Ghanaian Chronicle (Accra)

NEWS

26 November 2007
Posted to the web 26 November 2007

By Joseph Coomson

Rather than promoting regional integration, the Economic Partnership Agreements (EPAs) is rather fragmenting Africa and breaking its front as some regional blocks are signing the agreement without key countries.

The SADC region signed it last Friday without South Africa and Namibia whiles EU is pushing West Africa to sign without big brother Nigeria.

Indications from East Africa indicate that five countries from the block are ready to sign the agreements whilst Central African countries are confused about the agreements.

This situation has been described by Mr. Tetteh Hormeku of the Third World Network as chaotic and an affront to the unity of Africa both politically and economically.

“These negotiations were to strengthen regional integration but is now ended up in chaos and regional fragmentation,” he added.

The alleged agenda of EU to rather disintegrate Africa and the whole ACP was captured in a statement made by the Directorate General for Trade European Commission on November 12, 2007. The statement said “We fully appreciate that some countries may not feel able or ready to take this course, and at the end of the day if you don’t agree the choice is of course yours.”

These remarks were made during the weekend when Civil Society Organizations from Africa met in Accra to discuss the topic ‘Gender and EPAs’ from November 24 to 26, 2007.

EPAs are a scheme to create a free trade area (FTA) between the European Union and the ACP countries. They are a response to continuing criticism that the non-reciprocal and discriminating preferential trade agreements offered by the EU are incompatible with WTO rules. The EPAs are a key element of the Cotonou Agreement, the latest agreement in the history of ACP-EU Development Cooperation and are to take effect as of 2008.

However, the negotiations for the EPAs have faced stiff opposition from Civil Society Organizations and some governments from Africa because they see it as a way of liberalizing totally the service and investment sectors of the ACP countries

As there is strong indication that the EPAs will not be signed at the set date of 31st December 2007, several alternatives have been suggested by governments, civil society and the EU.

Ghana and Third World Network have proposed “Generalized System of Preferences (GSP) -plus” as a temporary stop-gap solution. By resorting to the GSP+, the EU could still easily offer to all ACP countries good access to the markets for their exports at very similar levels to the access offered within the framework of the Cotonou agreement, while remaining compatible with WTO rules as long as the regime remains open to other developing countries on the basis of objective and transparent development criteria.

However, EU has rejected the GSP+. They are considering “EPA-light” as an interesting possibility.

An “EPA-light” means an EPA proposal which is reduced to what in substance would be acceptable for West Africa (WWA) and the EU and, in the mean time, would be compatible with WTO requirements. The “EPA-light” would be a stop-gap solution, whilst WA and the EU will continue negotiating the comprehensive pro-development EPA which remains the ultimate objective.

But Mr. Hormeku thinks otherwise. He says, “The in built agenda of EPA Light could even be bigger than the EPAs”.

Victory for Africa in EU Trade Deal (EPA’s)

Victory for Continent in EU Trade Deal

The East African Standard (Nairobi)
NEWS
15 November 2007
Posted to the web 14 November 2007

By Benson Kathuri
Nairobi
Africa, Caribbean and Pacific won a major trade battle with the European Union after a deal was brokered to push the stalled negotiations to December, next year.

The EU has agreed to establish a framework arrangement that would ensure trade is not interrupted between January and December next year to give a one-year extension before a new pact is reached.

The latest pact deflates growing tension between the EU and the African, Caribbean and Pacific (ACP) countries over the trade arrangement, which gives the latter free market access to Europe.

Trade ministers and negotiators from the region met their counterparts from the European Commission on Monday in Brussels who agreed to push the deadline from the expected December 31, this year.

The EU and ACP countries are negotiating the Economic Partnership Agreements (EPAs) to guide trade between the two blocks.

Local exporters, mainly horticultural exporters had expressed fears that they would lose their market access should the two parties fail to sign a deal by next month.

Efforts to conclude the talks before the World Trade Organisation (WTO) imposed December deadline had become elusive, forcing the parties to seek a new deadline.

African nations had also accused the EU of attempts to blackmail them into signing the deal.

“They decided to conclude the negotiations of a comprehensive EPAs by the end of December next year that will replace the Framework Agreement,” said a statement released by the Comesa secretariat that is the technical arm of the ESA group.

“In this respect, the parties will put in place the necessary regulations and procedures, including the adoption of transitional arrangements by the EC, in order to avoid any trade disruption,” said the statement.

The Framework Agreement will be applied provisionally from January, next year.

Mr Felix Mutati, the Zambian minister of Commerce, Trade and Industry led the ESA delegation while EU commissioner for Trade, Mr Peter Mandelson and his Development counterpart, Mr Louis Michel represented the EU.

Sources confirmed said the two groups agreed to form a comprehensive EPA as a tool for sustainable development and the promotion of regional integration.

The two parties agreed that it was unrealistic to conclude a comprehensive EPA within the remaining period.

“They, therefore, agreed to work towards a Framework Agreement of an EPA that will comprise trade in goods, development cooperation, fisheries and any other sectors on which negotiations would have been concluded,” adds the statement.

“The framework will comprise a number of rendezvous clauses for the continuation of the negotiations beyond December.”

They agreed that a new regional protocol on rules of origin would be negotiated in the context of the full EPA.

The groups mandated experts to continue to work on the conditions for market access for sugar for the ESA group taking note of the proposals already submitted.

“Work should continue on trade defense measures for the EU market, including outermost regions, with a view to finding common agreement on outstanding issues in the Framework Agreement,” says the statement.

How Africa May Be Hurt by EPA Trade Deals

EPA Trade Deals Might Harm Continent
New Vision (Kampala)

OPINION
21 November 2007
Posted to the web 22 November 2007

By Yash Tandon
Kampala
IN the next few days, our leaders will decide whether to sign a new trade agreement with Europe. It will be a tough judgment call. The decision they make will weigh heavily on the course of our region’s development for decades to come. For this reason, the proposed agreement needs very careful scrutiny.

We have a long history with Europe in the light of which we must interpret current events. The proposed agreement by Europe will change the nature of our relationship from cooperation to one based on purely mercantile considerations. The EU and the ACP “partners” will be bound by the same rules. However, when unequal partners play by the same rules, the outcome is always in favour of the stronger side. With the proposal on the table, it is not difficult to see who is likely to win.

Analyses on the potential impact of the agreements prepared by the United Nations Economic Commission for Africa (UNECA) show that the proposed opening up of 80% of trade of the Eastern Africa Community (EAC) with Europe, will result in loss of tariff revenue of up to $130m per year. Furthermore, as African producers have to compete directly with those of Europe, their economies will undergo significant dislocations with regional trade losing ground at the expense of European imports. Success stories such as the growth of our regional markets for value added produce and manufactured goods could be undermined, threatening our farmers’ livelihoods and factory workers’ jobs.

Europe is using the excuse of the World Trade Organisation rules to speed up the conclusion of the negotiations. Indeed, the use of the December 2007 deadline is the single most important negotiating instrument in Europe’s favour. However, this deadline is more self-imposed than a legal reality since the Commission has options at its disposal to address the current situation which it is not willing to acknowledge. Europe is thus keeping on the deadline pressure because it chooses to do so. We can and we must turn the negotiating dynamics around if we are to reach a negotiated agreement that benefits Africa.

As the deadline approaches, individual EU members will surely assess the implications of maintaining firm the deadline for the future of the strategic relationship with the African, Caribbean and Pacific (ACP) countries. This is especially true for Africa in the context of the upcoming EU-Africa Summit in Lisbon in the first week of December.

Our leaders should capitalise on this political opportunity. On November 15, President Abdoulaye Wade of Senegal, in an open letter in Le Monde, seriously questioned the proposed agreement among others, due to its potential implications for Africa’s integration. Equally, other African leaders should join efforts to turn the negotiations with Europe into an opportunity for a better future instead of hastily accepting the agreement proposed as it stands now.

Europe has turned this into a game of high stakes and pressing panic buttons. In such games, he who moves first, loses. It is time for our leaders to hold strong, and not to panic.

The writer is a national of Uganda and the Executive Director of the South Centre (Geneva), the only intergovernmental think tank of the South

EU’s EPA Negotiator Mandelson Continues to Antagonize Africa

The following Article exemplifies how NOT to approach Africa. Mr. Mandelson has consistently tried to force Africa to accept trade agreements that are not only unfavorable to Africa but are actually harmful to Africa. His methodology can only be construed as bullying Africa into submission. Attempting to dismiss or worse, to silence any criticism of the current negotiations is counter productive. Mr. Mandelson should OPEN his ears to really hear the concerns of many Africans and even NGO’s over the current position of the EU in the EPA talks.
I urge Mr. Mandelson to go back to read the philosopher Emannuel Kant and the approach that can best be used to strike FAIR trade deals. If Mr. Mandelson continues his current approach there will not be any party happy with the results. The EU should reconsider Mr. Mandelson’s position these talks (as they are not currently negotiations anymore) and to consider an unbiased arbitrator to bring the two sides together in a fair manner. What Mr. Mandelson has fostered can only be considered as an atmosphere of contention between all parties.

Craig Eisele

THE ARTICLE:

Mandelson Attacks South Africa and Nigeria Over EPAs
Inter Press Service (Johannesburg)

NEWS
20 November 2007
Posted to the web 21 November 2007

By David Cronin
Brussels
Africa’s largest nations are trying to block the signing of the economic partnership agreements (EPAs) with the European Union (EU), Peter Mandelson, EU trade commissioner, claimed today.

Speaking to members of the European Parliament, Mandelson strongly criticised the positions taken by Nigeria and South Africa in the EPA negotiations between the EU and nearly 80 African, Caribbean and Pacific (ACP) countries.

He alleged that the larger African countries are preventing their counterparts in the regional EPA-defined groupings from signing deals by an end-of-year deadline.

The EU has threatened to impose punitive tariffs on Europe-bound exports from about half of the ACP countries if they do not enter into EPAs by December 31.

As the remaining 39 ACP participants are classified as least developed countries (LDCs), they qualify for a seven-year-old EU trade scheme, known as Everything-But-Arms, under which they would enjoy duty and quota-free access to the Union’s markets for most of their goods.

“If you go to West Africa, the regional group is dominated by Nigeria, which wouldn’t touch an EPA with a barge pole,” Mandelson said. “That’s okay for West Africa if you are relatively rich like Nigeria. But what about Côte d’Ivoire and Ghana? They are not rich, nor are they LDCs. They need an EPA to avoid disruption to trade at the end of the year.”

Similarly, he argued that South Africa, which already has a trade agreement with the EU, “does not have as much at stake” as its neighbours. He raised the possibility that EPAs could be signed with other southern African countries, if South African president Thabo Mbeki’s government rules one out.

“Am I – because of South Africa’s inability finally to commit — to say there should be no EPA for southern Africa; that there should be a disruption of trade with Botswana, Lesotho, Namibia and Swaziland?” he asked.

Mandelson’s combative stance was condemned by anti-poverty activists, who are perturbed by indications that the EU is attempting to drive a wedge between African countries, putting pressure on them to conclude deals that would prevent them from cushioning their farmers and nascent industries from an influx of European goods.

Karin Ulmer from Aprodev, an umbrella group for Protestant aid agencies, said it is “not fair” that the EU is trying to pull poor countries into an “unequal relationship”.

“Maybe it is not even the intention (to create divisions between ACP countries) but, de facto, that is what the European Commission is doing,” she told IPS.

Oxfam campaigner Luis Morago noted that Senegal’s President Abdoulaye Wade recently commented on how EU-Africa relations are “out of order” because of differences on trade. This does not bode well for the summit between European and African heads of state and government, scheduled to take place in Lisbon, Portugal, next month.

“The EU-Africa summit is meant to herald the start of a new partnership,” Morago said. “Most African countries are not convinced that what the EU has put on the table is worth signing. European and African leaders should take this opportunity to step back, rethink their approach and focus on creating a truly development-focused partnership.”

Also meeting on November 20, development aid ministers from the EU’s 27 member states, issued a statement which “expressed concern” over the slow pace of the EPA talks in some regions.

The ministers endorsed suggestions by Mandelson that agreements limited to trade in goods should be signed this year, allowing talks on other issues such as investment, competition and services liberalisation to run into 2008.

Caroline Lucas, a British Green member of the European Parliament (MEP), argued that Mandelson is putting pressure on vulnerable countries to open their markets to European goods. The Guardian newspaper in London, she remarked, had reprimanded him this week for “bully-boy tactics”.

But Mandelson, who played a pivotal role in reforming Britain’s Labour Party before being appointed to the European Commission, said he had encountered such charges since the mid-1980s. “The day that Peter Mandelson is not called a bully by The Guardian newspaper, I will throw a very large party indeed,” he said.

Erika Mann, a German Social Democrat MEP, said that some African countries would “have a lot of problems signing a free trade deal with the EU.

“The problem is that they don’t have the capacity to negotiate free trade agreements with other countries elsewhere in the world,” she added.

British Conservative Party MEP Robert Sturdy took Mandelson to task for his readiness to discuss the possibility of deals with some ACP countries that will exclude others.

“Surely the whole point of the EPAs is to facilitate and promote regional integration,” said Sturdy. “This is not about bilateral agreements. President Wade has said that the system proposed by the EU for trade is not acceptable and that EU-Africa relations are broken. It doesn’t sound as though things are going particularly well.”

Uganda Cites Unfair Practices by Western Nations in Trade

Uganda Wants Trade Barriers Removed
New Vision (Kampala)

NEWS
20 November 2007
Posted to the web 21 November 2007

By Paul Busharzi and Sylvia Juuko
Kampala
PRESIDENT Yoweri Museveni urged Commonwealth members yesterday to break down trade barriers preventing poor countries from exporting processed, value-added exports instead of raw materials.

Speaking at the opening of the Commonwealth Business Forum, Museveni said: “We have confined ourselves to the export of raw materials such as coffee, where we have been getting $1 per kg, while Nestle in London is getting $20 per kg.”

The forum, also attended by Rwandan President Paul Kagame and Commonwealth Secretary Don McKinnon, is seen as an opportunity for investors from member states to deepen trade ties.

Museveni told the over 300 participants from more than 40 countries that Africa’s continuing poverty was due in part to its failure to escape being a producer of raw materials instead of finished products.

Industrialised countries have opened their markets to minerals and farm products, but tariffs and other barriers to manufactured goods are still punitive, poor countries argue.

The President said he was lobbying rich countries and multinationals to change that. “If the Commonwealth Business Forum can play a role in this, it would be glorious. It will be mutually beneficial for all of us.” Uganda is Africa’s second biggest coffee grower, after Ethiopia.

It exported around 2.7 million 60-kg bags in 2006/7, but almost all is exported raw.

“I tried to talk to Nestle to come and do their business here. They said ‘no, just bring me the beans.’ I said no: I am not going to continue donating money to you,” Museveni said.

In the 20 years of his administration, some successes in value-add-tion had been registered with fish exports to the US, Europe and Japan, he noted.

He announced that plans were in advanced stages to build a milk powder processing plant.

Africa’s own industrial revolution, along the lines of many fast-growing Asian countries, could be around the corner, the President predicted.

“If the Chinese and the Indians have grown so much, what will happen when the long-suffering Africans burst onto the stage? There are 900 million (Africans).” Lifting the continent out of poverty would be beneficial for global business, he argued.

Museveni said it was wrong to believe that Africa cannot catch up with the Asian tigers.

“If we added value to our commodities, we would catch up with Singapore and Malaysia in one leap.”

Speaking earlier, Commonwealth secretary general Donald McKinnon said the challenge of transforming societies should not be seen as just an economic task but also a political and social one.

He pointed out that trade between Commonwealth nations stood at $175b, compared with the $995b trade with the rest of the world.

“Only 15% of trade is among ourselves. It actually means we should promote trade among ourselves so we are in better shape to promote trade outside our borders,” McKinnon said.

Museveni arrived with Rwanda’s President Paul Kagame at the Business Forum, which was delayed by more than one-and-a half hours because the huge tent, set up for the occasion, was not yet ready.

USA Sends Message to Africa About “Free Trade”

U.S Says Free Trade is Best for Africa
The New Times (Kigali)

NEWS
21 November 2007
Posted to the web 21 November 2007

By Eddie Mukaaya
Kigali
US secretary for the Treasury Henry M. Paulson said African economies should embrace free trade if the continent is to develop fast.

“It is a development strategy that has worked for countries as diverse as Singapore, Chile, Ireland and Mauritius. And it is a strategy that can work for other countries in Africa,” he said in a statement released by US Department of State. Paulson was addressing a recent U.S.-Africa Business Summit in Cape Town, South Africa. G20 Finance Ministers and Central Bank Governors attended the summit to discuss the positive economic changes taking place on the continent.

Paulson asked the international community to support Africa’s reforms, while African leaders and people were urged to maintain a firm commitment to the reforms, combat corruption, respect human rights, stick to the rule of law and spread benefits of economic growth to more Africans. He attributed the current conflict in Africa to competition for natural resources, suggesting that therefore their protection is vital for long term, sustainable and inclusive economic advancement of Africa. He also cited lack of access to finance as one of the biggest constraints for private sector growth in Africa. Paulson stressed the need to improve the business climates by enhancing transparency, shortening the business start-up process, and strengthening the rule of law and property rights.

He said that U.S. economic assistance to Africa is increasingly being directed toward supporting countries fostering free markets, sound fiscal and monetary policies, transparency and the rule of law.

Major Confusion Over EPA’s Rage in Africa

Officials Confused About Pros And Cons of EPA
Inter Press Service (Johannesburg)

NEWS
20 November 2007
Posted to the web 20 November 2007

By Aileen Kwa
Kampala
The news that the ministers of the East African Community (Kenya, Uganda, Tanzania, Rwanda and Burundi) are on the verge of signing an economic partnership agreement with the European Union (EU) has been received with mixed reactions by government officials from these very same countries.

The East African Community (EAC) ministers had agreed with their EU counterparts last week that they would sign a framework agreement on trade in goods, market access, development cooperation and fisheries by no later than November 23 this year.

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This framework agreement will reduce to zero 81 percent of current EU exports in industrial and agricultural products entering the EAC markets. The elimination of tariffs to zero will take place over a transition period of 25 years.

By the end of the tenth year, there will be a zero percent tariff on raw and capital goods. Tariffs on intermediate goods will be brought down to zero between the eleventh and twentieth year and tariffs on finished items will be brought to zero percent after 25 years.

Built into the agreement will also be a mechanism for the continuation of the economic partnership agreement (EPA) negotiations beyond December 31, 2007. The additional areas to be negotiated include liberalisation of services, intellectual property and the “new generation issues” of investment, competition policy and government procurement.

A negotiator from the region who had been involved in the negotiations felt that the outcome is good for the EAC. “Of course it is good. If it wasn’t good for us, we won’t have agreed to it.” He was pleased about the level of liberalisation, coupled with the exclusion list (19 percent of current trade), and the transition period. Tariff reductions will only commence from 2010.

Other government officials from the region, however, expressed unease. A major issue between the negotiating partners had been over “development”. The EAC had presented the EU with a matrix of projects they wanted the richer nations to fund.

According to an inside source from Nairobi, Kenya, who spoke on condition of anonymity, “what is not clear is what we are getting in the ‘development’ framework. I don’t know how concrete or binding this development framework is. It is a total mess, but unfortunately we are already there.

“Are we getting additional funds? The EU is saying they will be using the current EDF (European Development Fund). We have been conned into this thing. Here we are, opening our markets to the EU, and in return we are getting a ‘best endeavour’ (non-binding) development framework,” he told IPS.

“We don’t know, in concrete terms, where the funds are coming from — if there are no additional funds. So this interim arrangement is just about opening up our markets for EU,” he said.

Another government official from Kampala, Uganda, raised similar concerns: “I think there is an EAC development plan. Most probably that is what has been picked up for support under ‘development’.

“In terms of funds, are we getting anything over and above what we would have got (without the EPA) or are we getting the same? Those answers are not very clear and nobody can tell you. We know that the EDF is coming. Maybe it will still be the same amount of money.

“But we are told that the EU has been the major funder of our roads, so we need to agree with them (on the EPA). So it is a bit tricky,” the Ugandan official said, on condition of anonymity.

When asked how the package might affect the agricultural sector in Uganda, there was some uncertainty. The Ugandan official commented, “there is a list of sensitive products which has been excluded from liberalisation. I am told that the (EU agricultural) subsidies are not open for negotiation.

“This means that, tentatively, (the EAC will not open its markets) to those products that the EU is subsidising, such as beef and dairy. But when you look at Rwanda, they are importing a lot of milk from the EU. How are Uganda and Tanzania going to keep the milk out? If there are no border measures, the milk can easily come here.”

To the question whether the EPA will affect the industrial sector in Uganda, he commented: “We don’t have much of an industry to talk about, really. Maybe the problem is upcoming industries, I don’t know.

“It could be a catch-22. Maybe we can attract investment or maybe it will discourage our local entrepreneurs who have already started something or who could have started something”, were it not for external competition.

He gave the example of small grocery stores that are currently being pushed out of the market. “They are being swallowed by supermarkets. These small shops were supplying extra services. You could get a few things and pay later, and they were in the suburbs. Now, with the coming of supermarkets, some are pushed out.

“They are no longer competitive. We are not sure whether those (EU) people will come in (as a result of the EPA) and displace the small people.”

He also raised the issue of neighbours benefiting at the expense of Ugandans. “What if Europeans decide to put up industries in Kenya and don’t come here?

“Unilever is in Kenya and they are bringing all the products here — soap, toothpaste — to our supermarkets. So the people benefiting are Kenyans and there is no guarantee that we will benefit, although we are talking as EAC.’

“When you look at the Kenyan private sector, their export volume is quite high. But when you look at ours, the volume is a bit low. Ours could go under the EBA (the EU’s Everything-But-Arms trade initiative). I don’t know if our private sector is aware of this. If they are not, they might be told that by January, their products will attract a higher tariff.”

As a least developed country (LDC), Uganda can avail itself of the EBA preferential arrangement of the EU which provides zero duties on all LDC exports.

The Kenyan official had this to add: “We are better off with the generalised system of preferences (the tariff rates which the EU offers to all countries). The duties are high but they would not have stopped us from exporting and we would not have had to open our markets for the EU.

“But now the EU is telling us to pay a price for the preferences we are receiving from them by opening our markets. Even when we do this, the countries we fear will still be more competitive – India, Korea and others. The EU is already entering into free trade agreements with them. So there is nothing we are gaining by opening up.

“But the political aspect comes into play. The politicians say we need to reassure some of the key players, particularly in horticulture, that trade will not be disrupted (at the end of the year). Just because of horticulture, we are opening up our markets.”

Pushing Free Trade On Africa

Everybody is Pushing Free Trade On Africa

New Vision (Kampala)
OPINION
12 November 2007
Posted to the web 13 November 2007

By John Ochola
Kampala
I am responding to the opinion piece by Peter Mandelson and Louis Michel “Africa: Nobody is Pushing Free Trade, EU Chiefs Argue” The New Vision, October 23, 2007.

There is an old saying: “Give a man a fish and you feed him for a day, teach a man to fish and you feed him for life”.

Economic Partnership Agreements (EPAs) are the equivalent of Europe telling the African fisherman that if he does not give them his fishing net (tariff flexibility) he will not be able to sell any more fish to them (fish exports). In return for the fishing net, Europe promises a European fish (aid) that the fisherman has to apply for and wait for over two years.

Let me explain further. Michel and Mandelson ask: “How can we use trade to help African, Caribbean and Pacific (ACP) countries”? They would do well to go back to the drawing board with regard to their trade relationship with Africa. They could start by reading the excellent book Bad Samaritans by Ha Joon Chang, which deals exactly with the sort of misguided thinking that drives the European Commission (EC) towards pushing the ACP countries to sign a free trade deal.

The EC believes that free trade will encourage development and reduce poverty in Africa. But a free trade deal will create direct competition between European manufacturers and farmers, and their counterparts in poor countries, thus putting people in poor countries out of work and exacerbating their poverty.

The EC article states: “Critics of EPAs claim they will open up ACP markets to EU trade at the expense of local business and local growth – this is not true.” But critics of EPAs take figures from official EPA impact assessments that point to a contraction in regional trade, industry, agriculture and government revenue and list many sensitive products that could be hurt. For example, it is estimated that in Kenya, 65% of domestic industrial products could be vulnerable to unfair competition under EPAs and that a 15% contraction in regional trade would occur because more EU manufactured products would come into the region. In Uganda EPAs is estimated to create an annual loss in Government revenue of $9,458,170.

The article states that the EU is not threatening to raise tariffs for countries like Kenya, rather that “it is doing everything it can to avoid it”. But the EU has refused to look at any options other than EPAs for Africa, has refused to look into another waiver, and has refused to provide a transition period in spite of such a request made by Kenyan trade minister and head of the regional negotiating group for East and Southern Africa, Dr Mukhisa Kituyi.

The EC and the East African Community should take heed of lessons from our national and global economic history. Liberalisation brings about factory closures not start-ups. Witness what happened during structural adjustment policies in Uganda in the 1990s. Since then, other countries like Kenya have strategically raised import tariffs, along with investment, to revive both the dairy and the tannery industry. Just when African countries are realising the power it has to help agriculture and industry develop using tariffs as economic policy tools, these very tools – this ‘fishing rod’ for development – will be removed through signing the EPA.

Countries that are successful today did not start out by liberalising. They started out by using tariffs to protect industries and having the state invest in them. Korea and Taiwan both achieved their phenomenal growth rates by using high tariffs strategically to promote specific industries. China and Vietnam also successfully used high tariffs and state intervention for trade-driven development. The EU itself took many years to develop behind protective barriers before opening up its markets to competition.

If the EC were serious about supporting Africa to trade its way out of poverty, it would drastically change non-tariff barriers into the EU that have seriously hindered the ability of Africa to access the EU market. These include such things as domestic subsidises to EU agriculture, complicated Rules of Origin and Sanitary and Phytosanitary measures, as well as support around private sector standards that have the ability to restrict exports from Africa.

But none of these issues will be part of any final EPA text that may be hastily cobbled together to meet the December 2007 deadline. A goods-only EPA is a reciprocal free trade deal, not a fair trade deal.

The EC argue that the current trade arrangements under Cotonou must change because they are “not compatible with international trade rules” and that “calling for an end to EPA negotiations when there is no credible alternative is playing poker with the livelihoods of those we are trying to help”. But a credible alternative to EPAs exists.

Least developed countries like Uganda already have the option of the Everything But Arms (EBA) scheme. It is as simple as labelling the produce for export differently. Ugandan EPA negotiators should seriously consider making use of the EBA scheme – like other least developed countries in the region are doing — before rushing headlong into another round of liberalisation through EPA. The policy space still exists for Uganda to make use of tariffs under the EBA regime – if it chooses to do so – and to give its industry and agriculture a head start over Europe.

The writer works for EcoNews Africa and represents Civil Society Organisations working on trade at the East and Southern Africa Regional Grouping.

Chaos On Eve of EPA Deadline with Africa

Chaos On Eve of EPA Deadline
Inter Press Service (Johannesburg)

ANALYSIS
8 November 2007
Posted to the web 8 November 2007

By Aileen Kwa
Nairobi
On the eve of the deadline of the finalisation of the economic partnership agreement (EPA) negotiations, chaos reigns.

Ministers of the East and Southern African (ESA) grouping are gathering in Brussels, Belgium, next week for negotiations with the European Union (EU). It remains to be seen whether talks will stall and be carried over to next year, or if an “EPA-lite” will be accepted.

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An “EPA-lite” refers to an interim agreement covering the two components of , on the one hand, market access in goods and, on the other, development.

There is chaos at two levels. Firstly, the 16 country ESA grouping is, at this late stage, splitting into two parts, throwing talks into confusion. The East African Community consisting of Kenya, Tanzania, Uganda, Burundi and Rwanda have a common customs union and have decided to sign their own EPA with the EU.

Indian Ocean states (Mauritius, Seychelles, Madagascar and Comoros) have also decided to negotiate a separate EPA. These countries have spent the last two years negotiating with the EU from a joint ESA text. It is unclear how new texts will be stitched together within the short time available before the end-of-year deadline.

The shifting configuration of country groupings for the negotiations, however, is not even the main problem. There are still major differences between the EU and ESA countries on very basic issues.

First and foremost, there has been no meeting of minds about what constitutes “development”. Both the EU and African countries have agreed that “development” sits at the heart of the EPA negotiations. Yet both sides are worlds apart translating what this means in practical terms.

The ESA countries, defining development as the strengthening of their industrial and agricultural production base, have pushed hard for the EU to commit to a list of development projects, with financial commitments attached.

The EU has not been enthusiastic and has apparently tried to sidestep such conditions. The EU has been successful in persuading the ESA grouping to downgrade their demands.

The implementation portion of the “development chapter” in the EPA text has been converted into a “development matrix”. Now that the matrix has been worked out by ESA, both sides are quarrelling over where to put it.

ESA wants it appended to the EPA text to ensure that it is legally binding on the EU. The EU has declined, indicating that they will only make a reference to it in the text. Now, the EU is backtracking even further. It is unclear if such a reference will even be made in the “development matrix”.

In any case, the EU side has vehemently insisted that they cannot provide financial assistance in the EPA.

According to Jane Nalunga of the non-governmental Southern and Eastern African Trade Information and Negotiations Institute (SEATINI), “When we came up with the negotiating draft, we put in a chapter on development. The EU said no, let us remove it.

“They didn’t say right from the beginning, ‘We won’t consider it’. They said, ‘Remove it and put it in a development matrix. We will make a reference to it in the text.’ Now that we have done that, they say, ‘This is a Christmas shopping list.’ They don’t even want a reference to be made to the matrix in the text.”

Nathan Irumba, SEATINI executive director, argues that “the whole problem is that EU has lured countries into EPAs by promising them that there would be development programmes. That is a lie from the beginning — there will be no development programmes. There is only the EDF (European Development Fund) — and there is no new money there.”

The ESA countries are still angling for a firm commitment from the EU to provide development funding. As one Kenyan trade ministry official noted, “We need support to improve our competitiveness so that we will be able to withstand the liberalisation commitments”.

Disagreement over the much-vaunted (by the EU) “development” dimension of the EPAs could bring the talks to a grinding halt in the coming days.

There is also no agreement on the scope of products that can be exempted from tariff elimination. The ESA countries had initially asked for 57 percent of their tariff lines to be protected. The European Commission (EC) refused to accept the list and have asked ESA to shorten it.

Now the EC is insisting that the exception list should be limited to only 10 percent, while the ESA countries are aiming for 30 percent. According to Nalunga, “In Kenya, with all its tribal sensitivities — different regions and tribes wanting to protect different crops — it will be politically sensitive limiting the protection to only 10 percent.”

A previous assessment by the United Nations Economic Commission for Africa showed that unless the ESA countries protect up to 40 percent of their trade with the EU, it is likely that their industries will be negatively impacted.

In addition, there is also no agreement on the very important issue of the timeframe for tariff elimination. All agricultural and industrial products which are not in the sensitive list will have their tariffs eliminated over time. The EU is insisting on a maximum of 12 years, whilst the ESA countries have asked for 25 years.

Domestic support and export subsidies in agriculture are another area of contention. ESA countries have expressed the fear that their agricultural producers will be displaced by unfair imports of subsidised EU agricultural goods. IPS has learnt that the Europeans have flatly refused to even discuss this. These issues, they say, are an internal affair.

The two sides have also struggled over the issues of review and benchmarking. Both sides agree that there should be an in-built mechanism for review in the EPA text. The ESA countries have identified certain development benchmarks.

They want their liberalisation commitments to be pegged to these benchmarks. If the development benchmarks have not yet been attained by the time of the review, they want to be able to go back on the liberalisation timetable.

The EU has been dismissive of this position, insisting that a mechanism for review should be aimed at expanding the scope of liberalisation and not allow backtracking on those commitments.

With such wide divergences on major issues, it is uncertain if the ESA and the EU will be able to sign on the dotted line by the end of the year.

Africa Yet to Benefit From Trade Talks Under WTO/ EPA

Continent Yet to Benefit From Trade Talks Under WTO
The Herald (Harare)

NEWS
6 November 2007
Posted to the web 6 November 2007

By Victoria Ruzvidzo
Harare
Africa has not benefited from trade talks under the World Trade Organisation and should thus present a common force to confront current challenges if it is to claim a fair share of the global trade, the Trade Policy Training Centre in Africa second annual conference which began here yesterday has heard.

Not much progress had been made to balance trade since the Doha talks of 2000 and the situation could remain so for a long time unless the continent formed a united force to circumvent the difficulties. Presentations during the conference’s official opening ceremony yesterday were in agreement that there had been so much talk about improving the global trade system but these had largely remained in theory.

The North-South trade initiatives, which had been promising over the last few years, had not yielded much to date.

Therefore, such attitudes by the developed world and the past experiences of oppression and exploitation under colonialism needed to engender assertiveness and the resolve to work together among African countries.

In a paper presented on his behalf at the official opening of the conference, Swaziland’s King Mswati III set the tone for the three-day deliberations when he said Africa itself needed to rise up and do something about the situation because the North was reluctant to change the current trade systems that were largely tilted in their favour.

“I dare say that the manner in which the North approaches our situation tends to smack of some resemblance of attitude. Consider, for instance, the resolve and appropriateness with which the North is handling the plight and progress of Eastern Europe.

If Europe and the USA were to tackle our problems in a similar manner, there is no doubt that we would be a different continent today,” he said.

“Suffice to say that the socio-economic situation we are in today as Africans is unacceptable.

“Let me assure that as African leaders we are determined to work together in reshaping the socio-economic situation of Africa. We realise that we have common challenges, a common future and common aspirations,” said King Mswati III in a speech read by Prince Masitsela.

Both the Africa Union summit held in Accra last July and the Sadc summit held in Lusaka in August demonstrated the leaders’ resolve to work as a united front.

East and Southern Africa Management Institute (Esami) director-general Professor Bonard Mwape concurred that Africa needed to be united to push its agenda on global trade talks.

“Rationalisation and globalisation demands that African countries ensure that South-South co-operation produces fruitful developments for Africa,” he said. Initiatives under the African Union, Comesa, Sadc and Sacu, among other regional groupings, were bound to yield results. Furthermore, intra-regional trade was critical to economic development and poverty reduction in Africa and other least developed countries given that regional intergration offered better markets, which created a bigger domestic territory among countries.

“It is imperative that in your deliberations on multilateral, regional and bilateral trade agreements and emerging scenarios and challenges for the least developed countries you should search for common approaches and responses with which our continent can resolve our depressing situation.

“Indeed this conference comes at a time when the regional and multilateral issues are not only key to regional integration, but also dominate the development agenda of many developing countries,” said King Mswati III. Being held under the theme “Multilateral, Regional and Bilateral Trade Agreements: Emerging Scenarios and Challenges for African and Least Developed Countries”, the annual conference seeks to highlight challenges to trade and come up with solutions as regards how the continent can enforce balanced trade on the global arena.

Delegates from East and Southern Africa are attending the meeting together with representatives from the World Trade Organisation, the Swedish International Development Agency, the World Bank, African Union and the United Nations Development Programme, among others.

Zimbabwe is represented by officials from the Ministry of Industry and International Trade and the Zimbabwean embassy based in Johannesburg, South Africa. Issues under discussion will include the Doha Development Agenda, the impact of international trade on developing countries, North-South trade agreements, South-South trade and regional agreements and aid for trade and capacity building needs, among others.

The Trade Policy Training Centre in Africa (Trapca) was inaugurated in December last year to provide training and technical expertise on trade issues in Least Developed Countries.

Based in Arusha, Tanzania, Trapca operates under the auspices of Esami and Sweden’s Lund University.

Africa – Church Leaders’ Statement On Economic Partnership Agreements

Africa – Church Leaders’ Statement On Economic Partnership Agreements
Catholic Information Service for Africa (Nairobi)

NEWS
5 November 2007
Posted to the web 5 November 2007
Nairobi
Full text of a statement issued recently by Church leaders concerned about new trade agreements being negotiated between Europe and developing countries:

Preamble

We the East African Church Leaders meet in Nairobi from 30th – 31st October 2007 to deliberate on the status of the Economic Partnership Agreements (EPAs) negotiations and their implications on people’s socio-economic interests and livelihoods.

As stewards and shepherds of the East African Christian congregation which accounts for many of the East African population, we reiterate that EPAs processes and outcomes should facilitate sustainable human development, regional integration and economic growth in the East African sub-region.

We are aware that our countries together with other countries in the Eastern and Southern Africa (ESA) and Southern African Development Community (SADC) groupings are negotiating the so-called Economic Partnership Agreements with the European Union (EU) to replace the current non-reciprocal trade arrangements.

We are also aware that through EPAs the European Union (EU) is seeking to establish Free Trade Areas with the Africa, Caribbean, and Pacific (ACP) regions. And by so doing, this will fundamentally alter the way of trading between the parties to the detriment of the small farmers and producers of the regions of the South. While the EU is one of the most developed regions in the world, ACP regions are the least developed countries. Consequently, future trade between the EU and ACP under the EPAs arrangement will be more unequal than before. The ACP states will definitely lose out in trading under EPAs.

We are further aware that the EPAs negotiations are to be concluded and signed by 31st December 2007 and be in force in January 2008. Our East African countries (Kenya, Uganda, Tanzania, Burundi and Rwanda), considered as developing and least developed countries, are not ready to sign the EPAs contrary to the assertions by our respective government officials.

Noting that EPAs negotiation processes both at national and regional levels have not adequately and effectively been as inclusive as expected, we urge governments to demand that the proposals already on the table be opened to public debate and scrutiny before they are considered for signing. Regional and national long term development priorities and interests should inform the positions and proposals made by the negotiators.

We are concerned that EPAs if signed will:

Endanger the livelihoods of the small-scale farmers and producers in the East African region.

Undermine the efforts of the East African countries to attain food security and sovereignty.

Reduce governments’ revenue through the reduction and/or removal of tariffs on imports from EU.

Take away the governments’ sovereignty to use policy decisions to leverage the negative impacts of trade liberalization.

Undermine the industrialisation efforts and consolidation of the East African regional markets.

Deepen the[negative] effects of the Structural Adjustment Programmes, among others: poverty, food insecurity, unemployment, and insecurity.

We therefore call for:

The extension of the December 31st deadline in order to address the aforementioned issues and concerns in the agreement.

The accountability of the Ministers for Trade and Industry, as the chief government negotiators, to their respective Parliaments and citizens to ensure that EPAs are well negotiated as an instrument of development and not of exploitation.

A review of the laws and policies relating to the ratification of all treaties, making it mandatory for national parliaments to ratify all treaties.

Respective governments and non state actors to organize sensitisation dialogues where merits and demerits of the EPAs are discussed.

The scrutiny of the EPAs proposals to ensure that national development policies and priorities have been taken on board.

Our governments and the European Union to consider alternatives to EPAs as indicated in the Cotonou Partnership Agreement. Such alternatives should not be oppressive, but instead be fair and just [so to] serve the people.

Stated by Church Leaders from:

All Africa Conference of Churches (AACC)

Association of Members Episcopal Conferences in East Africa (AMECEA)

Building Eastern Africa Community Network (BEACON)

Christian Council of Tanzania (CCT)

Missionaries of Africa

Norwegian Church Aid

National Council of Churches of Kenya (NCCK)

Tanzania Episcopal Conference (TEC)

Uganda Joint Christian Council (UJCC)

Africa And EU May Settle for a Temporary Trade Agreement

Continent And EU May Settle for a Temporary Trade Agreement
Public Agenda (Accra)

NEWS
5 November 2007
Posted to the web 5 November 2007

By Isabella Gyau Orhin
Africa and the European Union may have to settle on other temporary trade agreements come January 2008.

This is as a result of the stance taken by both parties in the Economic Partnership Agreements (EPAs) negotiations.

Speaking to a team of African media personnel in the EU headquarters in Brussels last Tuesday, an assistant of the EU Trade Commissioner Mr. Stephen Adams said negotiations with the Caribbean countries are far advanced and the Caribbean countries may likely sign the EPAs by the scheduled date of December 2007.

“We may just focus on agricultural and manufactured products for the time being with the African countries,” he said.

“What we should remember is that we all agreed in 2001 to change the situation and gave ourselves seven years to do that,” Adams said in a briefing.

Giving a background to the Cotonou agreement which was signed on 23rd June 2000 and revised in Luxembourg in 2005, he said that agreement was based on historical circumstances and the special relationship between the EU and the ACP countries.

Some of the provisions of this agreement he said are in contravention of World Trade Organisation (WTO) regulations which insist that trade relations should be reciprocal.

According to Adams, other developing countries, particularly in Latin America who are outside the ACP have threatened to sue the EU at the WTO if it does not put an end to its preferential treatment for ACP countries.

“This is what we have spent the last seven years doing in order to prevent ourselves from a law suit from the other developing world,” Adams explained.

“The notion here is that the EU discriminates in its trade relations by having different trade arrangements with developing countries,” he added.

He said since the Cotonou agreement is based on preferential access, it does not provide any incentives for the ACP counties to diversify their exports or add value to them.

“We want to use the EPAs to change that,” he said adding, ” at the heart of the EPAs is regional market building so that the EU can negotiate with regional groupings instead of individual countries.”

Mr. Adams also said the EU is not asking ACP countries to liberalize their markets on the same scale as the EU would. “We are just asking them to liberalize just enough to meet WTO regulations,” he said.

According to him, the EU is also guaranteeing increased aid for development assistance although development assistance is not being negotiated as part of EPAs.

Reacting to allegations that the EU is trying to smuggle the Singaporean issues of Investment, Competition and Public Procurement in the EPAs, Mr. Adams said, the EU is not insisting that the Singaporean issues which have been taken off the table at the Multilateral level should be included at all cost in the EPA negotiations.

He also explained that the EU cannot accede to calls by NGOs to give Generalized Systems of Preferences Plus (GPS+) to African countries which even give better assess to countries in terms of trading with the EU.

He said the GPS+ is given to countries that have signed international conventions such as the Kyoto Protocol on Climate Change, the International Labour Organisation (ILO) agreements on Labour Standards and sustainable development, which ACP have not signed.

In an open letter to anti poverty campaigners who appear to have succeeded in convincing ACP governments not to sign the EPAs, EU Trade Commissioner Mr. Peter Mandelson said “by assisting with the creation of regional markets and accompanying the sometimes difficult adjustments these entails the EU is standing by the side of its ACP partners in their drive to adapt to the challenges of globalization.”

He said no question in Europe’s trade development policy is more pressing than how that continent can use trade to help ACP countries build strong economies.

He said ACP countries received 1.6 billion euros in development assistance over the period 2001-2005 through the European Development Fund and the EU budget.

“Not only will these assistance continue and increase but also ACP countries will be major beneficiaries of the decision to increase Europe’s spending on aid for trade to 2 billion euros.

But critics say that is too small considering the fact that China is investing over five billion dollars in the Democratic Republic of Congo alone.

Developing Countries Are Afraid of ‘Rigged Commerce’ Not ‘Free Trade’

Developing Countries Are Afraid of ‘Rigged Commerce’ Not ‘Free Trade’

Business Daily (Nairobi)
OPINION
15 November 2007
Posted to the web 15 November 2007

By James Thuo Gathii

In an editorial on Thursday November 1st 2007, Peter Mandelson, the EU Trade Commissioner and Louis Michel the EU Development Commissioner wrote an opinion piece titled Nobody is Forcing Free Trade on Africa. That piece strongly advocated using free trade to help African, Caribbean and Pacific build stronger economies. There is certainly no doubt that these countries want stronger economies and free trade is certainly one way to build stronger economies.

Their editorial is welcome since these top EU officials now acknowledge that some ACP regions will need more time than the end of this year to conclude new trade agreements with the EU.

These new trade agreements, known as Economic Partnership Agreements, (EPAs), between ACP countries, on the one hand, and the EU on the other, will replace the current preferential trading arrangements. Under these preferential trading arrangements, ACP countries enjoy duty free access for some of their exports to the EU.

These privileged access is not shared by non-ACP developing countries. However, since the WTO waiver allowing the EU to extend this preferential access to the end of this year, the EU and ACP countries committed themselves in the Cotonou Agreement of 2000 to negotiate Economic Partnership Agreements (EPAs) by the end of 2007.

The commitment by the EU and ACP countries in 2000 to negotiate EPAs was premised on several understandings.

First, that EPAs would open up European markets to agricultural products from ACP countries in the same way that ACP countries would open their economies up to those trade items that the EU has a comparative advantage over ACP countries.

This was a necessary assumption since for more than the last 50 years, trade liberalisation in industrial products far out paced liberalisation in agriculture.

In other words, global trade was rigged in favour of industrial products and against agriculture. Industrialised economies like the EU benefited both from their comparative advantage in industrial products and for their agricultural produce – a feat that these countries achieved by highly protecting their agricultural sectors from low cost producers in developing countries.

For example, huge subsidies to high cost EU sugar producers has hurt low cost ACP sugar producers. The EU also subsidises its cotton farmers thereby adversely affecting over 10 million lower cost cotton farmers in West and Central Africa.

The US is a bigger culprit here since it not only has bigger cotton subsidies, but these subsidies have been found to be inconsistent with the rules of the World Trade Organization (WTO), by its highest judicial organ, the Appellate Body.

The EU argues its cotton subsides are much lower than those of the US and that it is the biggest buyer of African cotton. This is exactly where the problem here is. The EU buys African cotton at rock bottom prices because subsidies to cotton farmers in the EU and in the US have depressed the cost of African cotton.

These prices would be much higher for African farmers whose cotton would command the biggest share of the global cotton market in a genuine free trade regime. Today, cotton from the US commands world markets although the US is a higher cost producer of cotton than African countries that produce cotton.

In short, those countries in West and Central Africa that produce cotton would be much better off in a genuinely free trade regime than in the current regime that is woefully rigged in favour of developed countries like those in the EU.

In fact, many economists have shown that such a free trade regime would be much more beneficial to developing countries than all the assistance they receive from developed countries. Unfortunately, EPAs are not addressing the distortions in global trade.

A second premise upon which EPAs were to be negotiated under Article 36 of the Cotonou Agreement was that barriers to trade between EU and ACP countries would be progressively removed.

In other words, EPAs would not suddenly unleash the forces of demand and supply on 1st January 2008. There was a recognition that technologically advanced industrial economies cannot be expected to compete on a level playing field with poor and agrarian societies.

Thus, as much as ACP countries aim to break dependence on trade preferences and commodity trade as the EU brass argued in their opinion piece, ACP countries cannot forget how big economies like the EU keep their markets inaccessible using sanitary and phytosanitary standards.

These standards undermine the preferential access and will undermine any free trade regime that will come into force under the EPAs. For example, the EU has imposed stringent chemical residue content limits in flower and other exports from ACP countries like Kenya.

These limits have not only increased the cost of production but increasingly made the EU market inaccessible especially for small scale farmers who may not be able to afford alternatives to mythl bromide which the EU hates to have traces of in produce entering the EU.

In the meantime, the state of California in the US has been putting up a brave fight to permit it to continue using mythl bromide as farmers in the ACP are forced to abandon using it and in the process losing their share of the EU market.

While the EU has every right to impose whatever sanitary or phytosanitary standards it decides, WTO rules require it to ensure that those standards are based on a scientific justification and a risk assessment showing they pose risks to human, animal or plant health.

ACP countries do not have the resources the US has to challenge EU sanitary and phytosanitary standards as the US has done successfully.

This is a second example of how rigged the application of trade rules are in favour of developed economies and against poor countries. It is notable that among the over 70 ACP countries are 44 of the poorest countries in the world.

Each of these country’s share of global trade is much less than one per cent.

Thus, it seems foolhardy to imagine that for these poorest of poorest countries any amount of transition time to trade on a level playing field with the EU will come some day soon.

This is just the stark reality that even Mandelson and Michel concur with. The Cotonou Agreement and the WTO Agreements contemplated this challenge.

One of the ways in which the Cotonou Agreement sought to address this problem of size was to negotiate trade agreements among six regions of the ACP countries.

Thus rather than negotiate bilaterally, the EU is negotiating with six ACP regions. Building regional markets is certainly an important way of overcoming the small size of individual ACP economies.

Yet, even these regions are nowhere near as muscular as the market power that the EU wields.

Take the Central African region as an example. It includes war torn countries like the Democratic Republic of Congo, Central African Republic and Chad. These countries also have the least capacity to negotiate a complex trade agreement with the EU. Yet, there is word that the Central African Region is one of those most likely to complete an EPA with the EU soon.

On its part, the primary trade treaty of the WTO sought to address this problem of unevenness in the trading relationships between rich and poor countries through the principle of special and differential treatment.

This is the principle that allows the trade preferences that are due to be eliminated by EPAs. Under this principle, developed countries are exempted from the requirement that every time they open their market to a developing country, they have to automatically extend the same advantage to all WTO member countries.

While Mandelson and Michel argue that it is non-ACP developing countries that are loudly protesting EU preferences to ACP countries, they conveniently forget to tell us the big pressure of EU interest groups -including EU farmers and big business -will benefit enormously once the EPAs come into effect.

Global trade is therefore moving away from trade preferences on the false premise that developing countries are now able to compete on the same playing field as the rich countries. This may be true for high (and some low) middle income developing countries. However, this is certainly not the case for the least developed countries.

Least developed countries still require to be treated preferentially because of their innate vulnerability in the global economy.

An overwhelming majority of people in least developed countries live in poverty without access to basic needs like water, health, shelter and education. Thus to suppose a least developed country could compete fairly with a developed economy under a regime of free trade is to suggest that you can treat countries that are so unequal in an equal manner.

Free trade presupposes a somewhat rough parity of conditions among trading partners so that they can produce tradeable goods and services that they can then exchange.

However, in a system where countries have vastly unequal economic power, there ought to be measures to ensure that benefits proportionate to the economic position of each country can be accrued. Without such a rough proportionality in the benefits of a common trading regime, it would be regarded as illegitimate by those left worst off.

Mandelson and Michel’s reassurances that EPA’s will not mean free trade between the EU and ACP countries ‘any time soon’ cannot be gauged from the ongoing EPA negotiations.

While developing countries have been pushing for a more development friendly trade regime at the WTO, the EU is pushing in the other direction with the EPAs.

For example, the EU is pushing for new commitments on government procurement which are not even a negotiating item in the Cotonou Agreement.

In the 2001 Doha Declaration that launched the Doha Round of talks, all WTO members agreed that there would be no negotiations on items such as government procurement unless there was explicit consensus.

There has not been such explicit consensus in the failed Doha Round of WTO talks. So, negotiations on government procurement in the EPAs are an example of the EU seeking to get concessions from ACP countries that the EU cannot get through the WTO.

New commitments like government procurement and competition rules, as good as they sound in theory, are going to involve heavy implementation costs that are likely to outweigh the dynamic benefits that these rules could produce for ACP countries in the long run.

Already ACP countries, like non-ACP developing countries, face enormous challenges implementing the obligations they assumed in the Uruguay Round that ended with several new agreements in 1995.

Kenya for example has yet to formally implement any of the several Uruguay Round Agreements in its national legislation. This situation is so bad that Kenya has to turn to Comesa rules to safeguard its sugar industry from unfair international competition rather than directly resorting to its WTO rights.

This is so because the Kenyan Parliament has yet to pass laws reflecting Kenya’s WTO rights and obligations to counter unfair trade practices by its trading partners.

Thus, while any trading arrangements that would improve ACP product standards while promoting investments and building regional markets are welcome, EPAs also come with their bundle of challenges.

One of these challenges is not whether ACP countries should adopt free trade rules and policies in their trading relationship with the EU.

Rather, a critical challenge is the rigged nature of the global trading regime in general, and the uneven trade relationship between ACP countries and the EU in particular.

Thus, as long as the EU’s cherished common agricultural policy continues to distort global trade patterns in favour of the EU and against its weakest trading partners, EPAs are unlikely to address the development challenges of ACP countries.

In the final analysis, each ACP country will have to establish if the EPA it will sign onto will advance its interests or not. One sure mechanism to do so will be to subject the EPA to a process of parliamentary scrutiny and approval. No ACP country should sign onto an EPA negotiated by trade bureaucrats without the kind of oversight accountable and transparent governance requires.

Without such parliamentary oversight, ACP countries may yet again be railroaded with an enormous package of obligations that would undermine their current efforts to eliminate poverty while spurring economic growth.

Gathii is a Professor of International Commercial Law at Albany Law School, New York. He is currently a Visiting Professor at the School of Law of the University of Nairobi, Parklands Campus.

The EPAs – About Development or Exploitation?

The EPAs – About Development or Exploitation?

Inter Press Service (Johannesburg)
NEWS
1 November 2007
Posted to the web 1 November 2007

Analysis By Sue Scott
London
Europe’s paternal trading relationship with African states threatens to end in an almighty family fall-out if they fail to sign the economic partnership agreements (EPAs) by the end-of-year deadline.

European Union trade commissioner Peter Mandelson went on the offensive this week, accusing non-governmental organizations of “ignorance or prejudice” in “wholly misrepresenting” the aims of the deals.

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The EPAs, he argues, are desperately needed by African, Caribbean and Pacific (ACP) countries to move out of poverty. So what is there not to like?

Aggressively promoted by Europe as necessary to meet its commitments under World Trade Organisation (WTO) rules, but attacked by critics as a Trojan horse that could wreck Africa’s economic progress and do little for its political self-determination, the EPAs are likely to remain a bone of contention way beyond the January 1, 2008 deadline.

No one disputes that the preferential trade arrangements historically enjoyed by Europe’s former colonies are in need of reform. But it is contested whether reciprocal trade agreements in the form of EPAs will be an improvement.

The delays in the EPA talks have to a large extent been blamed on the EU’s inclusion of the so-called “Singapore issues”. A far-reaching set of institutional reforms that Europe linked to market liberalisation, they were first introduced into trade negotiations by rich nations at the WTO meeting in Singapore in 1996.

The “Singapore issues” are “new generation” or behind-the-border regulatory reforms that address the areas of investment protection, competition policy, government procurement and trade facilitation. Developing states managed to get them off the WTO agenda, only to find them reintroduced in the bilateral EPAs.

While the EU has since agreed that concluding the “trade in goods” section of the EPAs by the year-end deadline would be sufficient, the “Singapore issues” will remain on the table for conclusion later on.

They involve a raft of provisions, the implications of which may not be fully appreciated by many African countries, says Dr Sanoussi Bilal, co-ordinator of the European trade co-operation programme for the European Centre for Development Policy Management (ECDPM). He was an observer during recent EPA negotiations.

Bilal has deep reservations about the pace and extent of the EPAs, which, he says are in danger of being passed by default. Even of central Africa, the region closest to concluding the deal, he remarks: “I don’t know if they understand what they are signing.”

ECDPM is just one of a number of non-government organizations (NGOs) concerned that EPAs are a “blank cheque” for European business to profit from African economies without guaranteeing “a positive balance sheet for development” in return. Bilal says even signing a goods-only trade agreement at this stage may be leaving some African countries hostage to fortune.

In particular, NGOs highlight concerns over the transfer of intellectual property rights, foreign direct investment (FDI) in service sectors such as banking, transport, communication and energy markets, and the liberalization of government procurement procedures, a bête noir for Europe, often accused of being a cloak for corruption.

While the main plank of the EU argument is that economies outside of the ACP are growing at a faster rate than those within the group because they are more attractive to foreign investors, NGOs counter that FDI can bring costs as well as benefits.

Indeed, some elements of the EPAs are prescriptive enough to restrict African countries’ ability to strike strategic deals. Opponents talk of a “loss of policy space”, which may limit pursuit of development objectives outside of the EPA regime.

Some are as critical of opportunities missed as much as liberties taken, particularly in the fraught legal area of intellectual property rights, arguing that potentially positive measures around intellectual prpoerty rights are absent from the EPAs.

These include the transfer of technology, joint ventures, prevention of biopiracy and misappropriation of traditional knowledge by EU companies.

But that involves a level of detail way beyond the capacity of many of the resource-restrained African negotiators to fully engage with, says Dr Mareike Meyn, research officer in the international economic development group at the Overseas Development Institute, based in London.

“When it comes to competition policy, for example, some countries have not even drafted a competition bill, let alone implemented it, so committing them to build up a regional competition authority (as foreseen in some EC drafts) is very difficult. There are fears among African policymakers that they are not able to make those commitments.”

Bottom-up, bespoke documents are needed take into account African states’ different levels of economic development, rather than a top-down template for reform, says Meyn.

“In the case of east Africa and southern Africa, we have 15 highly heterogeneous countries. Some of them are economically integrated at the sub-regional level but for most economic integration is in its infancy. Plus, some are in a conflict or post-conflict situation.

“If the EU is interested in promoting economic development with EPAs, they should take countries’ different development levels into account and not overextend them.

“It doesn’t make sense to include issues that a partner fundamentally objects to and yet argue it is development friendly,” Meyn argues.

Bilal agrees. “Why can’t we have separate templates for each country? The EU Commission will say ‘we do not impose anything’, but the reality is even when the regional negotiators are good, at a national level they do not follow what’s happening and, at the end of the day, those agreements are going to be signed at a regional level.”

EU Seeks Comprehensive Ties With Africa

EU Seeks Comprehensive Ties With Region

BuaNews (Tshwane)
NEWS
1 November 2007
Posted to the web 1 November 2007

By Grace Kasungami
Brussels
The European Union (EU) says there is a need for a more comprehensive partnership, and more coherent policies towards Africa.

This sentiment was outlined in a report issued by the European Commission (EC) to the European Parliament, this week, adding that African economic prosperity is essential to European prosperity.

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The EC which is the EU’s executive arm, said it is becoming increasingly clear that Africa matters because of its political voice, economic force and a huge source of human, cultural, natural and scientific potential.

Ten African journalists currently in Brussels on a fact-finding mission meant to enhance their knowledge about Europe, were also furnished with this report.

Later this year in Lisbon, Portugal, the current EU chair will host the long awaited Africa-EU Summit on 8 and 9 December.

The Commission in Brussels said the EU remains the first economic partner of Africa with exports of merchandise to the continent amounting to 91.6 billion Euros and imports from Africa reaching 125.6 billion in 2005.

The EC also reveals that Europe’s collective Official Development Assistance (ODA) for 2006 was pegged at 48 billion Euros.

The EC has also observed that China is rapidly emerging as Africa’s third most important trade partner with total trade amounting to about 43 billion Euros in 2006 from 30 billion Euros in 2005 and that 23 per cent of Chinese oil imports come from Africa.

Meanwhile two top European officials say the Economic Partnership Agreements (EPAs) which the EU is currently negotiating with the six African, Caribbean and Pacific (ACP) regions are designed to give developing nations more opportunities for local business, attract new investment and build stronger regional markets.

In an open letter to anti-poverty campaigners here Wednesday, EU Trade Commissioner Peter Mandelson and EU Development Commissioner Louis Michel say the EPAs would take a trading relationship based on dependency to a trading regime based on economic diversification and growing economies.

They say Europe’s trade and development policy is to use trade to help ACP regions build stronger economies and break their dependency on trade preferences and basic commodity trade.

The two commissioners dispute misconceptions from critics that the EU is trying to force ACP regions into completing negotiations this year, saying the EU is doing everything possible to be flexible.

The commissioners explain that the suggestion that EU extends its Generalised Systems of Preferences (GSP ) to ACP regions to avoid the end of year deadline cannot not work as the GSP only gives extra trade preferences to countries that ratify and implement core international agreements on labour and sustainable development.

The commissioners add that contrary to statements that the EPAs will not be fair as they will open ACP markets to EU trade at the expense of local businesses and growth, the EU will provide a full removal of tariffs and quotas, with a temporary exception of sugar and rice.

“EPAs will not mean free trade between the ACP and the EU from Jan 1, next year or any time soon. This is not true. This scenario does not exist,” they say.

They add that the EU will ensure that there are no export subsidies on any goods where ACP countries remove tariffs to protect local ACP businesses from competing against subsidized EU produce.

The commissioners explain that ACP countries will also be able to protect and exclude sensitive products and take advantage of long transition periods to nurture growing industries.

According to the commissioners, the EU will also, during the same time, provide substantial technical and financial support to help with the implementation of the new arrangements.

“The whole process will be backed up by a considerable package of development assistance; the ACP countries will be major beneficiaries of the decision to increase Europe’s spending aid for trade to 2.0 billion Euros a year with a priority given to measures that help implement EPAs,” they say.

The commissioners stress that the money will also help ACP countries to prepare new structural reforms and trade policies, adjust to the changes they bring and enhance infrastructure and competitiveness to seize trade opportunities.

The EU has also agreed to rewrite its rules of origin to further improve the market access opportunities for ACP exporters.

The EPAs are the agreements that the EU is negotiating with the six African Caribbean and Pacific regions that will replace the trade chapters of the Contonou agreements when trade preferences of this agreement expire in 2008.

EU Defends Push for Interim Trade Agreements

EU Defends Push for Interim Trade Agreements

Business Daily (Nairobi)
NEWS
1 November 2007
Posted to the web 1 November 2007

By Allan Odhiambo

The EU has defended its push for the signing of interim trade pacts with developing countries ahead of the December 31 deadline for a new Economic Partnership Agreement (EPA).

Though critics have warned that signing piecemeal agreements could undermine ongoing economic integration on the African continent, the EU maintained that the strategy is the only sure way of avoiding trade disruptions as a complete EPA deal was unlikely to be reached within the deadline.

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“It has become clear that some regions will need a little more time to complete full EPAs. Consequently, to avoid disrupting African Caribbean and Pacific (ACP) countries’ exports, we need WTO- compatible agreements,” Harvey Rouse, the head of political and trade section of the European Commission in Nairobi told Business Daily.

“Where a full EPA is not yet complete, we have to capture those issues negotiated so far in an agreement with a goods market access arrangement at its core and then move on to finalise negotiations in other areas in the early part of 2008,” he said.

Analysts said failure by Kenya and other ACPs to land new EPAs by end of next month would prompt a repositioning of trade between the two partners to the less generous market access terms under the General System of Preferences (GSPs).

Trade between the EU and ACP is conducted under a preferential framework, which granted nearly all products originating from the latter duty-free access to the European market.

Authorities in Kenya estimate that should trading with the EU revert to GSP some of its products that have been entering the European market at zero duty will attract duty of between 8.5 and 15.7 per cent.

Last week, the chief economist at the Trade and Industry Ministry, Richard Sindiga told Business Daily that plans were underway to sign interim agreements with the EU to guard against any form of disruptions in trade come January 2008.

“We are not blind to the fact that we may fail to reach a full EPAs hence the transitional agreement will serve as a safety net tool to any form of trade disruptions,” he said.

Some critics view the new push for interim pacts as a secret strategy of “divide-and-rule” that places the markets of poor nations at a risk of being flooded by cheaper imports from Europe because desperate nations are likely to make hasty and injurious decisions on the matter.

Mr Rouse, however, denied the claims saying the interim pacts would enable both sides to avoid any forms of trade disruption without compromising the objective of negotiating comprehensive EPAs with a full development package.

“In effect, we have decided jointly with Kenya and others in the region that we will not be forced by a legal deadline to abandon our development ambitions.

The Kenyan government for instance is extremely interested in pinning down an agreement on services during the course of next year as part of a broad EPA” said the EC official.

Mr Rouse further maintained that negotiators are on course to replace the current trade regime with new agreements through a process owned and managed by Kenya and other regional countries: “It should also be underlined that this is not a classical negotiation with the EU seeking market access.

It is in effect our joint negotiation with other developing countries in the WTO who don’t benefit from EPAs so that we can get an agreement that will survive scrutiny in the WTO”

Analysts said the pressure to land new trade pacts ahead of January 2008 is greatest among the more developed ACP countries like Kenya, Ivory Coast and Ghana, that do not qualify for an alternative preferential trade regime known as “Everything But Arms” (EBA) which is afforded only to least developed countries.

An alternative to interim agreements should the ACPs fail to land new EPA, would be for the EU to request a further WTO waiver or carrying on with tariff-free access to ACP exports until new EPAs are concluded as several nations from West Africa have demanded. The EC has, however, ruled out the possibility of walking this path.

“I have no hat and no rabbit to pull out of it… If we have no new trade regime in place by the end of this year the Commission has no legal option but to offer the region concerned [less generous] GSP preferences. This deadline is not a bluff or some negotiating tactic invented in Brussels.

“It is an external reality created in the WTO in Geneva. We are committed to replace Cotonou trade preferences with a new trade regime that does not discriminate against non-ACP developing countries.

We have to do this by 1 January 2008,” EU Trade Commissioner Peter Mandelson told the European Parliament’s International Trade Committee in September.

For starters, in line with this, ACPs and the EU agreed through a partnership signed in Cotonou, Benin in 2001, to establish a new regime in form of EPAs, which are to be concluded between willing ACP countries and the European Commission (EC) by December 31.

The non-reciprocal trading arrangement is based on the WTO waiver, which was granted at the 4th Ministerial Conference in Doha in November 2001.

The waiver was granted until the end of 2007, after which it is assumed that it will not be necessary.

EU to Increase Trade Support to African Nations

EU to Increase Trade Support

East African Standard (Nairobi)
NEWS
4 October 2007
Posted to the web 3 October 2007

By Benson Kathuri

The European Union (EU) will increase trade assistance to developing countries by Sh95 billion in the next three years.

European Commission top officials said in Dar es Salaam on Tuesday that countries in Sub-Saharan Africa, most of who are negotiating a new trade regime with the EU under the Economic Partnership Agreements (EPAs), will receive most of the funds.

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“These funds are used to help develop the capacity to trade in partner countries by providing training and technical assistance, supporting private sector development, meeting health and safety standards for export, and facilitating regional market building,” says a statement released by EC offices in Nairobi.

“In 2006, the continent received around 40 per cent of the total EC Trade Related Assistance (TRA), which amounted to Sh89.3 billion ( 940 million),” indicated the statement.

The announcement comes barely three months before the EU and a block of the African Caribbean and Pacific (ACP) countries sign a trade pact to replace the Cotonou agreement that ends in December.

The Cotonou agreement provides ACP countries, including Kenya, duty and quota free market access to the EU market.

Some WTO members had contested the Cotonou agreement saying it gave special treatment to some countries.

Kenya is negotiating EPAs under the South and East Africa (ESA) group of countries, most of them members of the Common Market for East and Southern Africa (Comesa).

“The Commission has provided TRA to Africa since the beginning of its development cooperation, and its engagement is solid and increasing,” the statement says.

In addition, the EU (Commission and Member States) supports the development of infrastructure in Africa for around Sh190 billion per year and has launched a EU Infrastructure Partnership for Africa to develop interconnectivity.

The commission has pledged to set up an Infrastructure Trust fund with the European Investment Bank later this month.

“In its initial phase, the Trust fund will receive grants for  87 million from the EC and Member States, while the EIB agreed to mobilise up to  250 million in loans,” says the Commission.

On the proposed Aid for Trade, EC says it is an essential vehicle to enhance regional integration and trade between developing countries.

It can help attract investment and build economic growth and poverty reduction.

“In the case of sub-Saharan region, the EC is also committed to support the aid for trade needs arising from the Economic Partnership Agreements,” it says.

The EU attended a two-day WTO review of trade related assistance meeting for the African region in Dar es Salaam.

Craig Eisele Creates Trans-African Development Strategies, Inc.

Craig Eisele Creates:

Trans-African Development Strategies, Inc.
 

            Trans-African Development Strategies, Inc or “TADS” is a New “Private” NGO focused on Infrastructure Development in Africa.

            The purpose of TADS is as follows:

1.    To provide Infrastructure development throughout Africa, whereas the Countries of Africa incur NO DEBT.

2.    To rehabilitate the 108,000 km of roads in Sub-Saharan Africa as identified in a study for the World Bank in 2006 (co-authored by David Wheeler) to facilitate development of trade throughout the Continent of Africa.

3.    To establish a modern limited access 4-lane “Highway” extending from the Mediterranean Cost of Africa and ending in South Africa (hopefully Cape Town, and 1 to 2 kilometers wide the full length of approximately 10,000 km.

4.    To encourage investment in the major portions of Infrastructure in the areas of Communications, Transportation and Power along the path of the “highway listed above in Item #3 and itemized below.

5.    To facilitate the development of a Trans-African Railroad

6.    To facilitate the development of a series of Pipelines to include Oil and Gas (refined and crude products) and Transportation of Water resources to areas in need.

7.    To bring a Fiber Optic Cable through the CENTER of Africa allowing Communication, Video and Internet into areas beyond the coastlines of Africa.

8.    To erect an Electric Transmission line from North to South through the Center of Africa.

9.    To develop electric Generation facilities including Hydro, Solar, Wind, Nuclear and Natural Gas along this same route.

10.  10 To assist in the development of Manufacturing Facilities and secondary and tertiary processing facilities for Natural resources to maximize value added services within Africa and to substantially add and foster job creation.

11.  To Assist in the building of Schools and Hospitals along this same pathway.

12.  Assist in the development of large scale commercial farming and ranching operations.

13.  To repeat Items 3 through 12 on at least one possibly 2 East to West Trans Continental Paths in Africa intersecting with the Primary Route of North to South and tying the Continent of Africa together with World Class Facilities.

We are certain that this will allow Africa to not only be self sufficient, but also Increases Wages to alleviate Poverty, reduce human suffering increase health care availability, and foster educational benefits throughout Africa and allow other NGO’s to better server those people who are in need but are not getting the aid they now desperately need because of the lack of infrastructure.

We also believe that the increase in GNP and GDP will spawn an increase in Tax Revenues and the ability for the countries to be able to access international financing for other projects that each individual country deems appropriate for its population.

TADS expects to raise 100 Billion Dollars of “AID” for the Roads and Highway Projects paid over the next 7 years. With Direct Spending on African Labor and materials to exceed 40 Billion Dollars up to 70 Billion dollars over the 7 year period. A Strategy to obtain these funds has been developed and refined over the last 2 years. While meet with skepticism by many the project is real and attainable despite the nay-sayers and those who would detract form the ultimate goal of a “New and Brighter Future for Africa.”

This estimate does not include anything except the road and highway projects.

TADS has a REAL Vision for Africa and invites anyone wishing to see this vision realized to participate in anyway they feel is appropriate.

While this is the first in a series of Announcements, more information will be provided over the near future.

 

Craig Eisele

Managing Director

Trans African Development Strategies, Inc.

 

Some NGOs in Africa Call On Their Governments to Reject EPAs

The EU faces MORE trouble with the EPA Trade Negotiations (or mandates) in Africa. See article below: 

NGOs Call On Their Governments to Reject EPAs
Mmegi/The Reporter (Gaborone)

NEWS
11 September 2007
Posted to the web 11 September 2007
After their recent meeting in Accra, Ghana, African civil society organisations (CSOs) have issued a communiqué condemning the European Union (EU) for using the December deadline to put unjustifiable pressure on African governments to concede to its terms in the Economic Partnership Agreements (EPAs).

In the communiqué issued last Friday, the CSOs cautioned African governments not to buy into the EU’s false claims and re-emphasised that Africa has everything to lose and nothing to gain by signing EPAs with the European Union.

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They said that contrary to EU claims, African countries do not need to sign EPAs to maintain their current market access levels to the European market.

“We proposed that African countries can adopt the General System of Preference Plus (GSP+) which will enable them to have access to EU markets at levels similar to what they enjoy today, and this can even be improved,” said Tetteh Hormeku of Third World Network-Africa (TWN-Af).

“The EU claim that only the EPAs can guarantee this continued access is totally false,” added Hormeku. The CSOs caution that signing the EPAs will trigger severe job losses, threaten the peace of the continent, strangle Africa’s right to evolve and pursue its own development agenda, and lead to the re-colonisation of Africa by Europe.

They said that EPAs, if signed, will lead to the elimination of tariffs but that any tariff reduction and elimination will necessarily involve huge fiscal costs and many costs of implementation to African, Caribbean and Pacific (ACP) countries.

“The EU’s promise of two billion euros under the European Development Fund (EDF) to help with the cost of adjustment under EPAs is false, misplaced and at best self-serving.”

They said the additional funding is infact only 700 million euros and this is meant to be shared between the 71-member ACP group of countries and other developing countries in Latin America.

The EU’s promised aid “has nothing to do with development. It is more about buying acceptance of (the) agreements by giving money,” said Marc Maes, a campaigner from Belgium.

Maes said the EU is also manipulating the expiration of the Cotonou waiver on December 31, 2007 to send panic waves to African leaders that African exporters will lose access to the European market after this deadline.

“But this is not true. The European Union is bound by obligation under the Cotonou Agreement (which has the force of an international treaty) with the ACP to maintain market access for countries that decide not to sign the EPAs,” he said.

In spite of the obvious severe handicaps of the EPAs and the damage they will inflict on African economies our leaders continue to negotiate for the EPAs.

The Cotonou Agreement provides for countries not to sign onto EPAs. African CSOs therefore call on African governments and negotiators to call the bluff of the European Union and reject the EPAs.

African Countries Should REFUSE to Participate In Any Further EPA Negotiaions UNTILL…

Personal Opinion:

Given the obvious arrogance and condescending attitude of Peter Mendelson in his interactions with Africa and African Leaders and Trade Negotiators it is only reasonable to ask for… and even demand… his removal from all future EPA trade negotiations.

While I would offer my own services to end the impasse between the EU and Africa, I am afraid that Mr. Mendelson’s actions have not only put the EU in a bad position for these negotiations but has given Africa cause to embrace China and China’s more favorable terms and conditions on trade and investment.  Besides I doubt the EU could afford my services.

The current anomosity brewing in these negotiatyions is obviously caused by a mentality the does not recognize the differences in the African countries, nor shows respect for the needs of each African Country. The manner in which Mr. Mendelson has proceeded has only caused roars of neo-colonialisnm and raised questions as to what is the stick and where is the carrot in these negotiation.

As such it is only reasonable that African Countries STOP all discussions until Mr. Mendelson and his equally unmovable colleges are removed from these EPA discussion.

The faster the EU acts, the faster the Trade Negotiations can be productive and ease the animosity between the EU and Africa that Mr. Mendelson has caused. Unless of course the EU wants this division, in which case it has the right man to do the job.

Mandelson Continues to Alienate in EPA Talks

Mandelson Urges Final Push in EPA Talks

Ghanaian Chronicle (Accra)
NEWS
13 September 2007
Posted to the web 13 September 2007

By Joseph Coomson

EU Trade Commissioner Peter Mandelson on Tuesday urged ACP governments to join a final burst of negotiations to successfully complete Economic Partnership Agreement negotiations by the end of 2007.

He warned that there would be no legal basis for the extension of existing preferential trade terms between the EU and the 78 African, Caribbean and Pacific countries if the two sides do not initial new Economic Partnership Agreements before the end of 2007.

In the absence of such agreements, Mandelson said, the EU and the ACP would have no legal alternative but to switch to the EU Generalised System of Preferences which would mean less-generous tariff preferences for many ACP countries.

Speaking to the European Parliament’s International Trade Committee, Mandelson said: “I have no hat and no rabbit to pull out of it If we have no new trade regime in place by the end of this year the Commission has no legal option but to offer the region concerned [less generous] GSP preferences.

“This deadline is not a bluff or some negotiating tactic invented in Brussels. It is an external reality created in the WTO in Geneva. We are committed to replace Cotonou trade preferences with a new trade regime that does not discriminate against non-ACP developing countries. We have to do this by 1 January 2008″.

Mandelson said the European Commission was committed to a successful negotiation.

Noting that the EU has offered to eliminate all tariffs and quotas on all exports from ACP countries as part of an agreement, Mandelson said: “In the time we have available, we will do everything we can to ensure the ACP regions get the best legally secure EU market access available. I believe that EPAs remain attainable for every region, and we will continue to work for success”.

China WINS as EU Bullies Africa on EPA’s

Europe Cautions Africa to End Trade Impasse

Business Daily (Nairobi)
NEWS
13 September 2007
Posted to the web 13 September 2007

By Allan Odhiambo
Nairobi
The European Union has blown the whistle on Kenya and its African Caribbean and Pacific (ACP) counterparts over ongoing market access negotiations with a warning that it will not extend existing preferential trade terms should the talks fail to beat the December 31 deadline.

Mr Peter Mandelson, the EU Trade Commissioner, said there was be no legal basis for extending existing preferential trade terms saying ACP nations should prepare for less generous market access terms in the new year.

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“I have no hat and no rabbit to pull out of it…if we have no new trade regime in place by the end of this year the commission has no legal option but to offer the region [less generous] GSP preferences.

This deadline is not a bluff or some negotiating tactic invented in Brussels. It is an external reality created in the World Trade Organisation in Geneva.

We are committed to replacing Cotonou trade preferences with a new trade regime that does not discriminate against non-ACP developing countries. We have to do this by January 1,” Mr Mandelson told the European Parliament’s International Trade Committee on Tuesday evening.

Analysts said extension of the preferential trade terms would have provided a safety net for most ACP nations struggling to land new Economic Partnership Agreements (EPA) before expiry of the deadline.

This latest stand by EU puts to rest any hopes of possible extension because such a move would require the EU to apply to the World Trade Organisation for a waiver to extend the preferential trade arrangement with ACP member states.

Mr Mandelson said though negotiations with ACP countries were on course, concern was rising over progress in a number of regions including East Africa where issues of regional groupings and the platform of negotiating the new EPA remain unresolved.

“It is disappointing that a few weeks from the effective deadline for concluding an EPA these difficulties continue to hinder progress,” Mr Mandelson said.

“I have spoken recently to those concerned and all I can do today is to reiterate my plea that these issues need to be resolved now. It will not serve the interests of any country to be seen to be holding up the region as a whole.”

Mr Mandelson’s plea came as senior Government officials from the East African Community (EAC) arrived in Arusha for a two-day meeting meant to make a final decision on what platform would be used to sign a new EPA with the EU.

“We hope to reach a common ground on EPA. We are optimistic something tangible will come out of it,” said Mr David Nalo, the Trade permanent secretary.

EPA negotiations have slowed down in East Africa mainly because of Tanzania’s membership in Southern African Development Community (SADC) to the exclusion of other East African Community member states.

EAC member states have been negotiating new trade deals with the EU under the Eastern and Southern Africa (ESA) platform that is backed by the Common Market for Eastern and Southern Africa (Comesa) that Tanzanian abandoned four years ago.

Provisions of the WTO treaty, however require EAC member states to sign new deals with the EU as one Customs Union, meaning that all the five members have to provide a joint text for negotiations.

This requirement is what forced Tanzania to return to the regional fold and demand that new talks start under the EAC platform- a scenario that didn’t augur well with Kenya and other EAC members who maintained with less than three months to the December deadline, it would be impossible to land new deals if the negotiations were started afresh as a regional bloc.

They proposed that they build on the progress already attained under ESA- a path that Tanzania seems uneasy to walk.

EAC Heads of States last month ordered that officials explore possibilities of landing a joint EPA with the EU.

Mr Nalo however took issue with the EU for delaying responses to development texts presented to it for comment under the ESA platform, saying it had substantially pulled back progress.

“It is wrong for the EU to lambast us lump some because they have for instance delayed feedback on the development text forwarded to them for comment. They should stop posing gimmicks of negotiation to paint us negatively,” he said.

Projections by Kenya show that it stands to lose close to Sh114 billion in trade and investment should it fail to land new EPA with the EU largely because some of the products which it has been exporting to this key market at zero duty would now attract duty ranging between 8.5 per cent and 15.7 per cent.

Mr Mandelson however said despite the time pressure, the EU remained committed to ensuring they had new and favourable trade deals with all regions.

“In the time we have available, we will do everything we can to ensure the ACP regions get the best legally secure EU market access available. I believe that EPAs remain attainable for every region, and we will continue to work for success,” he said.

The official stated they will prepare for the rapid implementation of the various legislative and procedural steps needed to put EPAs into place in time to avoid a WTO challenge.

EU Warns Continent On Bilateral Trade … Pushes Africa Closer to China Trade

If the EU continues this line of negotiations I personally believe that ONLY China will benefit!..

Article below: 

EU Warns Continent On Bilateral Trade

Business Day (Johannesburg)
NEWS
13 September 2007
Posted to the web 13 September 2007

By Mathabo Le Roux
Johannesburg
THE European Union (EU) this week issued a stern warning to African countries negotiating economic partnership agreements (EPAs) with the union, saying that if negotiations were not completed by the end of the year, bilateral trade conditions between tho se countries and the EU would revert to the General System of Preferences (GSP), a more onerous trading regime. This would result in countries now enjoying favourable terms under the Cotonou agreement to lose those preferences.

The EU is negotiating EPAs with African, Caribbean and Pacific countries to replace the Cotonou agreement, which is incompatible with World Trade Organisation (WTO) rules.

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A waiver on the agreement expires at the end of the year.

The implications of the EU’s warnings for Southern African Customs Union countries are mixed. However, trading under GSP would not affect SA, as the country’s trade relationship with the EU is governed by a separate agreement – the trade, development and co-operation agreement.

Lesotho, as a least-developed country, is also shielded, as its trade with the EU would switch to an EBA. However, Botswana, Namibia and Swaziland are vulnerable. Disconcertingly, the EU cited SA’s “deeply negative” stance as holding up the crucial trade talks.

“Botswana and Namibia’s situation is most precarious and Swaziland is also vulnerable. Their trade with the EU will have to revert to GSP terms, which has slightly more onerous rules of origin terms, but more importantly also does not cover all products as favourably, for example beef and table grapes,” said Eckart Naumann, an economist and associate of the Trade Law Centre for Southern Africa.

Briefing the European parliament’s international trade committee this week, EU trade commissioner Peter Mandelson said there will be no legal basis for the extension of existing preferential trade terms if the EPAs are not finalised.

“This deadline is not a bluff or some negotiating tactic invented in Brussels. It is an external reality created in the WTO in Geneva.”

While talks with the Caribbean and Pacific regions are well advanced, prospects for concluding a deal before year-end with some of the African blocks are dim.

Mandelson singled out the negotiations with southern Africa as being of concern and in particular SA’s role. He said the ability to deliver an EPA with southern Africa largely depended on the region’s powerhouse.

Should EU’s EPA Trade Minister be REPLACED??

See  article below! It make me wonder if the EU should replace Peter Mendelson as their negotiator… the result of this man’s position could mean that Africa will move even closer to China for trade. This seems to be supported by what seems to be a 5 Billion Dollar deal between Congo (DRC) and China last week.

Power Struggle Continues With Unbalanced EPA Talks
Inter Press Service (Johannesburg)

NEWS
21 September 2007
Posted to the web 21 September 2007

By David Cronin
Brussels
African nations have been reduced to “begging” in negotiations on their future economic ties with the European Union (EU) in what has turned into exercise “assaulting democracy,” according to trade unionists and policy analysts from both north and south.

Trade talks have intensified in recent weeks between the EU’s executive, the European Commission (EC), and representatives of African, Caribbean and Pacific (ACP) governments. The Commission wants ACP countries to sign market-opening deals known as Economic Partnership Agreements (EPA) with it by the end of this year.

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Timothy Kondo from the trade union umbrella group Alternatives to Neoliberalism in Southern Africa (ANSA) said that the Commission has not been taking the concerns of poor countries seriously in the talks. Instead, it has been concentrated on reducing obstacles faced by western firms wishing to do business abroad.

“The attitude of the EU has to change,” Kondo told IPS. “Our governments in Africa have not been negotiating in the proper sense of the word. They have not been involved in what we trade unionists call collective bargaining. They have been involved in collective begging.”

“That is not to blame our governments. You shouldn’t blame the weak. The level of development between Europe and Africa is not the same. But the focus of the EPAs has been on removing barriers to trade between partners that are not equal,” Kondo continued.

Kondo took part in a Sep. 18 conference on the EPAs organised by left-wing members of the European Parliament.

He complained that suggestions put forward by ACP governments during the talks have been rejected by EU officials.

ACP countries have long argued, for example, that the talks should not cover such topics as competition, investment and government procurement. Yet the draft EPAs prepared by the Commission in the past few months have contained provisions on these issues, which primarily relate to the access that foreign firms would have to ACP markets.

Marc Maes, a trade campaigner with the Belgian anti-poverty group 11.11.11, said that most of the six ACP regional configurations with which the EU has been negotiating have refused to accept the Commission’s drafts. “West Africa has been very explicit on that,” he noted.

Nonetheless, the Commission has decided to keep its proposals on the table. “The texts that the Commission has tabled have reflected the Commission’s approach to global trade,” said Maes. “They do not reflect the interests and needs of ACP countries.”

The Commission has threatened to impose punitive tariffs on ACP exports bound for Europe if their governments do not sign EPAs by Dec. 31.

Earlier this month, the European commissioner for trade Peter Mandelson told members of the European Parliament (MEPs) that he would not consider offering more preferential treatment to ACP countries than the EU’s general system of tariffs if the Dec. 31 deadline cannot be met.

London Green MEP Caroline Lucas said that she had become accustomed to Mandelson’s “very blunt manner” from his involvement in British politics during his time the closest confidant to former UK Prime Minister Tony Blair. “But even I was shocked by the aggressive and bullying tone he adopted (in ruling out alternatives to the EPAs),” she said.

Addressing the European Parliament’s international trade committee on Sep. 11, Mandelson said it was “irresponsible” for anti-poverty activists to claim that tariffs would not have to be imposed on ACP countries if they do not sign the EPAs by the end of this year.

Mandelson maintained he has “no legal option” other than imposing tariffs in such an eventuality under rules set by the World Trade Organisation. A waiver to WTO rules applying to current EU-ACP trading arrangements will expire on Jan. 1 2008.

“I have no hat and no rabbit to pull out of it,” Mandelson said.

Mamadou Cissokho, president of the Network of Peasant Organisations and Producers in West Africa (ROPPA), said that ACP governments “are not negotiating, they are simply reacting to proposals put to us by Europe.” “European Union documents have been taken as the basis of our negotiations,” he said. “And all of the negotiation meetings have been funded by the EU.”

He pointed out that the EU spends 130 billion dollars per year on agricultural subsidies, even though farmers comprise just 4 percent of the Union’s population. Despite the huge competitive advantage enjoyed by European farmers, the Commission has urged ACP governments to reduce, and in many cases eliminate, the tariffs they apply to food imports from Europe.

Such trade liberalisation will have profound implications for small-scale African farmers and “jeopardise” the continent’s ability to feed itself, according to Cissokho. “Opening up markets willy-nilly means the traditional production methods we have in Africa are not going to be guaranteed or maintained,” he said.

Italian MEP Vittorio Agnoletto said that the Commission is trying to “claim that David and Goliath are equal” in the EPA talks.

“Frankly, this is a farce,” he added. “In this case Goliath – that is, the EU – is playing a false hand because it is not removing agricultural subsidies aimed at its exports.”

Agnoletto voiced concerns, too, over how the Commission has suggested that the EPAs commit the ACP side to a robust protection of intellectual property rights. By doing so, he contended, countries would be impeded from circumventing patents on drugs by importing cheap generic versions of treatments for AIDS and other major diseases. Some 30 million people in Africa are HIV positive.

Alexandra Strickner from the Institute for Agriculture and Trade Policy (AITP) in Austria argues that there had been a lack of debate in both Europe and in developing countries about the likely implications of the EPAs. It is particularly vital, she said, that parliaments should be given a formal role in scrutinising the accords.

“Mandelson is saying he would like to have the EPAs implemented immediately, without any ratification process in the ACP or in Europe,” she explained. “This is an incredible assault on democracy.”

Why Are MOST African Countries Reluctant to Liberalize Trade??

Why Countries Are Reluctant On Trade Liberalisation – Customs Chief

Daily Trust (Abuja)

NEWS
17 September 2007
Posted to the web 17 September 2007
Mr Buba Gyang, Comptroller General of the Nigeria Customs Service (NCS ), has explained why most African countries were reluctant to drop duties on imports.

“They (duties) provide a large part of their annual revenue,” Gyang told the News Agency of Nigeria (NAN) yesterday in Accra, Ghana.

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According to him, some African countries depend on the duties for more than 60 per cent of their annual revenue.

“If you look at the issue of collapsing trade barriers from one point, you will realise that the customs’ duty is a barrier but how many African countries will be willing to part with the duties ?”, he asked.

He said Nigeria, which has one of the largest economies on the continent, generates about

N400 billion from customs’ duties and other taxes, making it the second largest earner after petroleum.

According to him, a country like Ghana depends on the duties for about 50 per cent of their total revenue while the other West African countries wait on the duties to augment their budgets as well.

“That is why the African countries are asking the European Union, which brought in the idea of the Economic Partnership Agreement (EPA), to spell out alternatives, ” he said.

The EPA is a proposal by the EU to African, Caribbean and Asian countries to agree on liberalising their borders by the end of the year.

The Customs boss said the alternatives or development packages to supplement the revenue loss at the borders and ports had not been clearly spelt out by the EU, making many African countries reluctant on the EPA.

Africa’s Civil Society Accuses EU of ‘Bribing’ Continent

Civil Society Accuses EU of ‘Bribing’ Continent
Ghanaian Chronicle (Accra)

NEWS
7 September 2007
Posted to the web 7 September 2007

By Joseph Coomson

Civil Society Organisations (CSOs) have condemned the European Union (EU) for abusing the December deadline to put unjustifiable pressure on African governments to concede to its terms in the ongoing negotiation in the Economic Partnership Agreements between the EU and African Caribbean and Pacific (ACP) countries.

They cautioned African governments not to buy into the EU’s false claims. The CSOs from several African countries meeting in Accra yesterday re-stated that Africa has everything to lose and nothing to gain by signing Economic Partnership Agreements (EPAs) with the European Union.

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Contrary to European Union claims, African countries do not need to sign the EPAs to maintain their current market access levels to the European market.

Civil Society stressed that African countries can adopt the General System of Preference plus (GSP+) which will enable African countries to continue to have access to EU market at levels similar to what they enjoy now, and even an improved one.

“The EU claim that only the EPAs can guarantee this continued access is totally false”, said Tetteh Hormeku of Third World Network-Africa (TWN-Af).

He said signing onto the EPAs will trigger severe loss of jobs, threaten the peace of the continent, and strangle Africa’s right to evolve and pursue its own development agenda and lead to recolonisation of Africa by Europe.

According to him, the EPAs, if signed in its state now, will lead to the elimination of tariff but any tariff reduction and elimination will necessarily involve huge fiscal costs and many costs of implementation to Africa and other African, Caribbean and Pacific (ACP) countries.

The EU’s promise of two billion euros under the European Development Fund (EDF) to help with the cost of adjustment under EPAs was also described as false, misplaced and at best self-serving.

He said in the first place, the so-called additional two billion euros for adjustment is non-existent. “The additional funds is in fact only 700 million euros and this is meant to be shared between the 71-member ACP group of countries and other developing countries in Latin America,” he stated.

The Civil Society stressed that the EU money is not even sufficient to cover ACP losses arising from EPAs. EU’s promised aid “has nothing to do with development. It is more about buying acceptance of agreements by giving money”, said Marc Maes (of 11.11.11, Belgium), adding “EU aid will not right EPA wrongs”.

It further noted that the EU is also manipulating the expiration of the Cotonou waiver on December 31, 2007 to send panic waves to African leaders that African exporters will lose access to the European market after this deadline.

According to the outcome of the civil society meeting, the European Union is bound by obligation under the Cotonou Agreement, which has the force of international treaty, with the ACP to maintain market access for countries that decide not to sign the EPAs.

“The EU has deceived our governments, private sector and the horticultural sector that They will lose their markets after December 2007 and about alternative to EP As” said Jane Nalunga’ of SEA TINI, Uganda.

The EU is hiding its own offensive interests in market access, service, investment, and intellectual property interests. The EU contends that it has no offensive interests in market access negotiations in West Africa for instance. However the EU has raised concerns in its member countries about ‘buy national’ products campaigns in ECOW AS countries, said Ofei Nkansah of the Ghana Agricultural Workers Union.

Again EPAs claim to support regional integration was seen as false as ACP producers will lose regional markets to cheap and subsidized European products.

Civil Society went on to note that in spite of the obviously severe handicaps of the EPAs and the damage they will inflict on African economies and peoples, African leaders and regional blocks continue to negotiate for the EPAs.

“This is too high a price to pay” said Thomas Deve, the Project Officer of MWENGO, Zimbabwe. He said the Cotonou Agreement provides for countries not to sign on EPAs, African and therefore CSOs call on governments and negotiators to call the bluff of the EU and reject the EPAs.

Some African Countries Finally Stand UP to EU/EPA Demands

Countries Stand Up to EU

Inter Press Service (Johannesburg)
NEWS
28 August 2007
Posted to the web 28 August 2007

By Michael Deibert
Paris
Concern over getting too little in return for what they are being asked to give up has led some African nations to say “no” to some proposals for new trade relations with Europe next year.

Several Eastern and Southern African nations have announced that they will only sign parts of the Economic Partnership Agreements (EPAs) that relate to market access and development. The EPAs have been put forth as successor to the Cotonou Agreement, which expires at the end of December.

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The Cotonou Agreement gives 77 African, Caribbean and Pacific (ACP) countries preferential access to European Union (EU) markets. Signed in Benin capital Cotonou in June 2000, the agreement replaced the 25 year-old Lome Convention (signed in the Togo capital).

The Cotonou Agreement was broader in sweep than its predecessor, and set as its objectives “poverty eradication, sustainable development and the gradual integration of the ACP countries into the world economy.”

At a regional negotiation forum Aug. 3 to 5 in Port Louis, Mauritius, 16 Common Market for Eastern and Southern Africa (COMESA) countries agreed a strategy to be presented at their next negotiating round in September.

The 16 COMESA nations, represented by no less than five separate overlapping and occasionally competing economic groups, have little choice but to sign on to the market aspects of the new pact in order to maintain preferential access to EU markets and remain compatible with World Trade Organisation (WTO) access rules.

At present ACP members enjoy non-reciprocal trade benefits with the EU — such as access to EU markets which EU nations do not enjoy with ACP countries — but these benefits are incompatible with WTO standards.

New trade terms are being renegotiated through creation of WTO-compliant Economic Partnership Agreements (EPAs) that are scheduled to enter into force by the end of 2007. But EPA negotiations have proved difficult, with some countries fearing that their economies will not be able to withstand competition from European goods for years to come.

At a meeting in Brussels in February this year, COMESA negotiators said that potential loss to revenue for many African states across the continent heavily dependant on tariffs could require the EU to provide an additional 2 billion euros in assistance by 2010 if they were to allow Europeans free access. The COMESA members also want the EU to commit more funds to development in exchange for lowering trade duties.

“What Africa lacks is a market for its goods, and there are many barriers amidst which our goods are produced and sold to the EU,” says Tiberius Barasa, assistant research fellow at the governance and development programme at the Institute of Policy Analysis and Research (IPAR) in Nairobi, Kenya.

The EU has been accused by some food and trade policy analysts in the developing world of applying “zero tolerance” policies on food import that they say have more to do with protecting Europe’s heavily subsidised agricultural and fishing industries than with public safety.

Another mistake, some observers in Africa say, is an insistence on the part of Brussels to make South Africa the standard for assessing the capacity of the whole continent to withstand loss of revenue foreseen through the EPAs.

“This appears to be a fundamental clash of paradigms, and it’s very difficult to see how we’re going to overcome that,” says Brendan Vickers, senior researcher on multilateral trade at South Africa’s Institute for Global Dialogue. “The (European) Commission just isn’t seeing the bigger picture, and there’s a failure to understand that it’s not just the South African market, it’s the markets of other countries and less developed countries.”

South Africa, which has natural resources and a highly developed business and communications infrastructure, maintained per capita gross domestic product of 13,300 dollars last year, despite unemployment that still hovers around 25 percent. The Bureau for Economic Research in South Africa reported this month that South Africa’s GDP growth holds steady at 5 percent.

By contrast, Mozambique maintained a GDP per capita of just 1,500 dollars over the same period. In Kenya it was 1,200 dollars, and in Tanzania 800 dollars.

Despite offer of a transitional period for lowering trade barriers, there are fears that any agreement that does not address issues such as production and supply within each individual economy could do more harm than good to bilateral trade.

“If you look at national impact studies that have been made, you find that these reciprocal free trade agreements are going to be devastating for industrial capacity, for tariff revenues,” says Vickers. “There’s a need for far greater development cooperation to address these issues.”

Horticultural Producers Look for Early EU/EPA Agreements Amid Fears.

Regional Fresh Producers Seek Early EU Deal

East African Standard (Nairobi)
NEWS
29 August 2007
Posted to the web 28 August 2007

By John Oyuke
Nairobi
Key horticultural sector stakeholders from eastern and southern Africa regions want an early signing of the Economic Partnership Agreement (EPAs) with the European Union.

They fear that trade between the two regions would suffer serious disruption should there be no agreement or an interim arrangement to safeguard the current preferential trade agreement.

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“It is important that an interim arrangement be worked out to ensure there is no disruption of trade next year until a substantive EPA is signed,” interim chairman of Horticultural Council of Africa (HCA), Mr Hasit Shah said.

He said failure to secure a deal could mean exports from the region would be subjected to duty of between eight and 15 per cent starting next year.

“We don’t have such margins and efforts must be made to sign something by the end of October,” Shah told a news conference in Nairobi on Tuesday.

The proposed trade agreement will replace the existing arrangement between the EU and 77 African, Caribbean and Pacific (ACP) countries, which allows the latter duty-free access to the EU market until December 2007.

Shah said with only four months remaining, horticultural producers need to know, in good time, the type of tariffs they would pay.

A director at Kenya Flower Council, Mr Rod Evans, however, cautioned against hurried deals that could backfire.

He suggested that two of the six pillars nearing completion be signed to abide by World Trade Organisation (WTO) requirements and to ensure the current status of preferential exports to EU is maintained.

The horticulture sector has relied heavily on market access preferences under the LomÈ conventions and the Cotonou Agreement and is strongly influenced by other trade measures.

It is a sector that could be impacted heavily by the final outcome of the EPA negotiations. Shah cautioned that until the EPA is fully negotiated there would remain uncertainty within the sector as to the final treatment of its horticulture products after January 1, next year.

The agreement covers Burundi, Comoros, Djibouti, Eritrea Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Uganda, Zambia and Zimbabwe.

WTO’s Lamy Warns Africa: Completing the Doha Round is a Political Must

Completing the Doha Round is a ‘Political Must’ – Lamy’

Ghanaian Chronicle (Accra)
NEWS
24 August 2007
Posted to the web 24 August 2007

By Joseph Coomson

DIRECTOR-GENERAL of the World Trade Organisation (WTO) Pascal Lamy, in a speech in Kuala Lumpur on 17 August 2007, has said that today’s challenges are “resisting protectionist tendencies, investing in policies which ensure that the benefits of trade are spread fairly among and within countries and investing in a stable multilateral trading system.

“Let me conclude by saying that resisting protectionist tendencies, investing in policies which ensure that the benefits of trade are spread fairly among and within countries and investing in a stable multilateral trading system are the three key policies in front of us today.”

According to Lamy, to make sure the world economy continues to grow in a healthy and stable way, governments need to work together to come up with the right international or domestic policy answers to these challenges.

He said completing the Doha Round is not only technically possible, it is also a political must. “Concluding the round will boost international trade and economic growth, and it will ensure that the WTO continues to play a key role in managing globalisation and economic cooperation on a political level,” he reiterated.

He said given what is already on offer on the negotiating table, and what remains to be done, he thinks concluding this negotiation is both necessary and doable. He did not doubt that trade negotiators are clever tacticians and they only go the extra mile if they feel this will be reciprocated by their counterparts. “Like many economic challenges, at the end of the day, it is a matter of trust between partners,” he added.

Mr. Lamy was speaking to the topic ‘Trends and Issues Facing Global Trade’ in Kuala Lumpur, Malaysia.

Touching on the Malaysia, he said it is a country that has benefited enormously from trade opening. He said external trade has enhanced the country’s economic development and will continue to do so. Malaysia has been an active participant in the WTO for years and the multilateral trade system looks forward to your continuing support. He also commended Trade Minister Datuk Seri Rafidah Aziz and Amb. Muhamad Noor Yacob, currently chair of the WTO General Council, for their “tireless efforts in support of a more open trading system”.

The Doha Development Round of World Trade Organization negotiations aims to lower trade barriers around the world, permitting free trade between countries of varying prosperity. As of 2006, talks have stalled over a divide between the developed nations led by the European Union, the United States and Japan and the major developing countries (represented by the G20 developing nations), led and represented mainly by India, Brazil, China and South Africa.

The Doha round began with a ministerial-level meeting in Doha, Qatar in 2001, with subsequent ministerials in Cancún, Mexico (2003), and Hong Kong, China (2005). Related negotiations have taken place in: Geneva, Switzerland; Paris, France; and again in Geneva.

Eastern and Southern African Countries Ready for Partial Trade Agreement

Eastern, Southern African Countries Ready for Partial Trade Agreement

East African Standard (Nairobi)
NEWS
24 August 2007
Posted to the web 23 August 2007

By John Oyuke
Nairobi
Eastern and Southern Africa (ESA) countries are ready to sign a partial Economic Partnership Agreement (EPA) with the European Union (EU) by the end of this year.

The Common Market for Eastern and Southern Africa (Comesa) Secretary General, Mr Erastus Mwencha, said the action is necessary to avoid disruption of ESA-EU trade.

He said in view of the deadline for the conclusion of the negotiations, it is clear these countries would not be able to conclude discussions by December 31. “On the basis of the progress on the ground, and to meet World Trade Organisation compatibility and ensure there is no trade disruption, ESA countries will be ready to sign an EPA,” he said. He identified some areas of key interest to ESA countries and which they would be ready to sign as trade in goods, agriculture, fisheries and dispute settlement.

Mwencha was briefing the media on the progress achieved by Comesa on the implementation of various programmes. Kenya and 15 other nations in eastern and southern Africa are negotiating new a trade deal with the EU as a bloc to protect their fledgling agricultural sectors and industries.

The accord must be in place by the end of the year, when a World Trade Organisation exemption on preferential EU market access for African, Caribbean and Pacific (ACP) countries expires. Formal negotiations for EPAs at the level of all ACP countries started in September 2002. Civil society groups in Africa have called for the suspension of the EPAs negotiations between the EU and the 77 ACP countries for at least three years to allow African governments to critically look at other regional initiatives they are already engaged in.

Mwencha said to ensure the partial signing of the EPA is done by December 31, two negotiation sessions are planned in September and October in Kigali and Djibouti respectively.

African Civil Society Groups Want Talks On EU Trade Pacts (EPA’s) Held Up for Three Years

Lobbies Want Talks On EU Trade Pacts Held Up for Three Years

The Nation (Nairobi)
NEWS
19 August 2007
Posted to the web 19 August 2007

By John Mbaria
Nairobi
Civil society groups in Africa have called for the suspension of the Economic Partnership Agreements (EPAs) negotiations between the European Union (EU) and the 77 African, Caribbean and Pacific countries for at least three years to allow African governments to critically look through other regional initiatives they are already engaged in.

They have also called for unconditional debt cancellation for Africa and for the EU countries to increase development aid to 0.7 per cent of their GNP. They made these demands during a meeting in Lusaka, Zambia, that coincided with a Southern Africa Development Community (SADC) heads of state meeting.

During the meeting, various representatives of the groups resolved to remain opposed to the current policy frameworks that continue to undermine socio-economic development in Africa and to work towards “the repositioning of Africa as an independent key global player and not as a junior partner of Europe.”

They also expressed feelings that Africa should be allowed “to consolidate its own regional integration before being forced to open up to free trade areas with Europe and other economic blocs.” Further, they want an increase in the access of goods and services from Africa in the EU, the removal of non-tariff barriers and that the EU commits resources to support national food security and land reform programmes in African countries.

They also expressed feelings that Africa should be allowed “to consolidate its own regional integration” before being forced to sign EPAs with Europe.

EPAs are meant to create a free trade area in which the EU and the ACP countries will be required to gradually eliminate tariffs and quotas on the goods and services they trade on. They are expected to come into effect from January 2008.

African countries, for instance, are being called upon to reciprocate by opening up their market to EU goods and services. This will replace prevailing arrangements in which the EU had given goods from ACP ‘special’ access to its market without requiring the latter to do likewise (on non-reciprocal basis).

The EU has consistently argued that, when signed, the EPAs will promote trade and investments, remove barriers to trade in services, improve ACP’s access to its market and support the process of regional economic integration schemes within ACP.

It had also “subdivided ACP into six negotiating blocks, a thing that has not gone well with critics. For instance, African civil society groups have expressed concern that the division of African countries into regional negotiating blocks not only undermined their integration but also threatens the ability of governments to “defend the livelihoods of their citizens.”

On its part Oxfam International says this had reduced Africa’s negotiating power. It also decries the fact that the negotiations were being conducted in a most unequal environment in that while the 25 EU countries have a combined GDP of $13,300 billion, among the ACP countries are 39 of the world’s 50 least developed countries.

It avers the fact the West African region is more than 80 times smaller than the EU in terms of GDP. “Given these vast inequalities, it is not hard to see where the power lies.”

“Why agree to equal game rules when you know the stronger team is already rigged to win?” says a statement Oxfam had earlier released to the media.

The civil society movement is also concerned that the agreements will be signed in four months, yet few Africans neither know what they are all about nor how they will affect them. “In December, African governments will head to Lisbon, Portugal, to sign up to a new partnership with European Union governments. Yet, very few Africans know about this important upcoming event, which will have serious ramifications for generations to come.”

On their part, African governments have expressed mixed reactions to its signing. For instance, the Kenya government early this year showed a willingness to sign the agreement with the Trade and Industry ministry, faxing a statement to newsrooms that expressed fears of losing the lucrative EU market unless the EPAs are on course by the end of 2007.

Kenya’s warming up to the EPAs had taken many by surprise, especially because of a hardline anti-EPAs stance taken by Trade minister Mukhisa Kituyi in June 2005. Dr Kituyi said then: “To make poverty history, we will also have to make EPAs history.”

But the Government was to have a change of heart early this year when it expressed the view that it needed to continue tapping on the lucrative EU market for its horticultural products. To Kenya, this was necessary to secure over one million jobs and investments worth more than US$700 million (Sh50 billion) in the sector. EU is Kenya’s significant trading partner, which contributes 26 percent of its exports and 35 percent of its imports.

Maintaining access to the EU market is also critical to Kenya because its competitors – Morocco, Ethiopia, Tanzania, Uganda and Zambia- are already guaranteed duty free market access by the EU under Everything-but-arms agreement.

This positive inclination to EPAs has gone hand-in-hand with a demand made earlier by an African trade ministers meeting in Addis Ababa, Ethiopia, that asked the EU to “show flexibility and to positively and adequately respond to key concerns of Africa.” They had also asked the EU to provide additional resources to develop infrastructure as well as Africa’s ability to raise production and to compete effectively in the market.

What worries pundits most is that African economies have limited capacity for being flexible and might not know how to respond once cheap goods from the EU flood their markets. Critics say that the economic costs of implementing the EPAs are likely to be very high, yet there is no guarantee that the promised benefits will ever reach Africa, and particularly the average African.

While signing the EPA might have its own merits, the trickiest part is that it is not so obvious how African countries might end up loosing. Analysts attribute this partly to the subtle ‘coating’ the EU has been using to the entire scheme.

“Behind the herd of acronyms, obscure economic jargons and polite euphemism lies a pernicious programme that threatens to subjugate economies of ACP countries to the needs of European capital,” says a report published early in the year in Africa News, an authoritative weekly online newsletter.

 

I Europe Pushing African Countries Into Signing Trade Agreements

Europe Not Pushing Countries Into Signing Trade Agreements

Rwanda News Agency/Agence Rwandaise d’Information (Kigali)
NEWS
1 August 2007
Posted to the web 1 August 2007
Nairobi
African countries are not being forced by the European Union to finalise a trade deal before the end of the 2007 deadline, Kenya’s top trade official said Wednesday.

“Europe has not pushed the December 31 2007 deadline on us. It is part of the Cotonou agreement that we all agreed to and signed”, David Nalo the Trade Ministry’s Permanent Secretary, said.

The Cotonou Agreement was signed in June 2000 between the European Union and the group of African, Caribbean and Pacific states (ACP). It was signed in Cotonou (Benin) by 79 ACP countries and the then fifteen EU states.

The deal has allowed ACP countries non-reciprocal market access to EU member states at preferential tariffs since 2000, meaning ACP did not have to give EU products market access in return.

The European Union obtained a waiver from the World Trade Organisation until December 2007 for its deals with the ACP block, among them Rwanda.

This will change from January 1, 2008 because the EU now wants access for the goods and services offered by its member states to ACP countries.

Rwanda and fifteen other countries in the Eastern and Southern Africa (ESA) are negotiating a reciprocal free trade agreement with the European Union (EU).

Mr. Nalo denied what he called the misinformation that Africa had been coerced to agree to the deadline for the new trade plan, known as the Economic Partnership Agreements (EPAs).

“That is contained in the Cotonou agreement to which we contributed and put our signatures”, he told African journalists at a Reuters Foundation workshop in Nairobi.

EPAs are basically reciprocal free trade agreements that upon signing will open developing country markets to the products and services from the European Union block – which now has 27 members.

Mr. Nalo said the trade benefits to the East African Community states (EAC) will offset the revenue loss after the new trade deal is concluded. Rwanda and Burundi joined the EAC in June bringing the family to five states including Uganda Kenya and Tanzania.

Critics of the plan have continuously argued that African countries are ill-prepared and would face detrimental effects from the deals such as loss of much needed revenue.