COMMENT:"EPA 2014 Deadline-
EPA 2014 Deadline-
The 25th Session of the Joint Parliamentary Assembly (JPA) of Africa, Caribbean and Pacific (ACP), and the European Union (EU) took place in Brussels from the 15th to the 19th of June 2013. Among the issues on the agenda was the unilateral deadline issued by the European Commission (EC) for ACP states that have initialed/signed interim Economic Partnerships Agreements (EPAs) to sign/ratify them by October 2014. ACP countries that fail to do so will lose their preferential market access offered by the EU. By that decision the EC assumed the high moral ground and attempted to paint a picture in which it was faultless in the EPA deadlock and rather that ACP states were to blame for the impasse, when in fact the EC is the chief culprit. This stance did not go down well with most ACP parliamentarians
The mood and sentiments of most ACP Parliamentarians, both during the formal and informal meetings, showed that the EC was unfair with the issuance of the EPA deadline. For instance one MP indicated that it was surprising to have a one-
More surprising to the ACP MPs was a call by the Christian Democrats of the EU Parliament to reject the report of the Committee on Economic Development, Finance and Trade which reflected the genuine concerns (de-
It is important to understand the deadlock. The deadlock in the EPA negotiations boils down to a clash of logics in development thinking and vested interests. The European Commission in the midst of its never-
For Instance the EC launched its Raw Material Initiatives in 2008 which seeks to have privileged access to affordable mineral raw materials that, according to the EC, are crucial for the sound functioning of the EU's economy. Sectors such as construction, chemicals, automotive, aerospace, machinery and equipment sectors which provide a total value added of € 1 324 billion and employment for some 30 million people all depend on access to raw materials. Most of the issues raised in the EU’s Raw Materials Initiatives find expression in the EPAs.
As Africa’s middle class is growing so too is the potential that the region will be a huge market for European companies. According to the African Development Bank (AfDB) Africa's middle class had risen to 313 million people in 2010 accounting for 34% of the continent's population as compared with 111 million (26%) in 1980 and 151 million (27%) in 1990. The AfDB is predicting that the African middle class will grow to 1.1 billion (42%) by 2060 and that will be a huge market with youthful flavour. This is in sharp contrast to the aged demographic picture in Europe whose demands for goods and services are different and are likely to shrink.
To be able to have control in these areas the EC insists on a number of contentious issues, which are not necessary for a free trade agreement that is World Trade Organisation (WTO) compliant. Some of the contentious issues are export taxes, standstill clause, Most Favored Nation clause (MFN), just to mention a few. The MFN basically bars Africa from having any ambitious trade agreement with any trade partner especially the emerging economies such as China, India and Brazil and offers Europe a privileged access to Africa’s raw materials, the prime target of the EU’s Raw Materials Initiative.
For instance EU firms based in Cote d'Ivoire, Ghana and across the West and Central African coast have attained monopoly position in so-
These well integrated operations are backed by EU governments and promoted through every available means including Foreign Direct Investment (FDI) and so-
The ACP states on the other hand have a transformative agenda which conflicts with the corporate agenda of the EU.
A key aspect of that agenda is strengthening regional and intra-
The emergence of China, India and Brazil is altering the trading patterns of African countries. The dynamism on the development landscape makes it imprudent for countries to lock themselves up in a free trade agreement perpetually especially between unequal partners.
In terms of export of raw products, Europe remains the largest market for Africa. However for value added products made in Africa, the African market is the best destination. Regional trade in Africa is increasing at faster pace than Africa’s trade with the EU and most of them are industrial products which offer a lot of employment for many during the process of value addition. For instance within ECOWAS, most of the promising local companies such as pharmaceuticals, wire-
In 2011 African Union Heads of State adopted the Africa Mining Vision. It is a vision that departs totally from the current regime where the natural resource sector is an enclave and most raw minerals are meant for export. It envisages a new regime in which mining plays a catalytic role in the transformation of minerals-
The strategy of the EC in the light of this clash of logics and interests is to close all alternatives under its control, and with the deadline of October 2014 force countries to sign unto EPAs because of marginal increment in tariffs on ACP exports to the EU market. This is strange in a partnership as echoed by the ACP MPs throughout the JPA but that is the reality. But the question is whether Africa governments will sacrifice the desire and initiatives to structurally transform their economies, and move away from raw materials dependence, for the EU market access bait that will be eroded in the coming years anyway with or without an EPA.
Yes, ACP states are faced with genuine concerns of exporters but that can be dealt with by destiny-
The wise economic and politically sound decision to take is to compensate the companies for a period of time (say three years) and assist them to diversify their exports destinations to safeguard the integration and the industrialization agenda in Africa. To sacrifice all these for a market engulfed in crises, as the EU market is, is difficult to comprehend. Nothing short of pragmatic leadership is required.
By Sylvester Bagooro
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