The Economic Partnership Agreements (EPAs) between the European Union (EU) and African regions are not at their best right now. The EU is maintaining pressure on African countries to make progress in the EPA negotiations despite the resistance of some African governments and civil society. Discrepancies in the negotiations are leading to fragmentation among both regions and countries in Africa and this is compromising efforts towards regional integration in Africa.
Whilst the signature and provisional application of the EPA between the EU and the South African Development Community (SADC) was signed the 10th of June 2016 in Botswana, other regions are showing strong resistance to signing the deal. In the Economic Community of West African States (ECOWAS) Nigeria, Gabon and Congo Brazzaville have refused to sign. However, the most recent and surprising announcement comes from East African Community (EAC) where the Foreign Affairs permanent secretary of Tanzania, Aziz Mlima, announced that his country had decided to halt the signing of EPAs scheduled for July 18th 2016.
Pressure from the EU
In order to force the ratification of the EPAs and their subsequent implementation, the EU has promoted delegated acts to withdraw market access preferences for 6 African middle-income countries from 1st October 2016. Hence, if the regional EPAs that have been recently signed are not ratified before this deadline, exports from middle income countries will face increased custom duties. It means that these 6 African countries would have poorer market access to the EU and their exports would be considered under the General System of Preferences (GSP) whereby taxes from 8 to 12% of the value would have to be paid. It wouldn’t affect to the Less Developed countries whose exports would remain under the “Everything but Arms” option.
The EU is making use of its economic power by pushing African countries to ratify and implement agreements which have not been ratified by their parliaments and that have only been signed very recently or not at all. This action does not respect the Democracy of these Africans countries and would cause them unnecessary economic damage and seriously damage regional integration. Why are the poorest countries in Africa the main losers once again?
The EPAs provide for the elimination of tariffs on four-fifths of exports from the European Union, mainly manufactured products which are detrimental for the infant industry in Africa. In turn, the EU will continue to import from Africa all of its products, already duty free. African countries can no longer tax most of the European products they import and are thus deprived of the fiscal revenue they need to strengthen public services such as health, education and infrastructure.
AEFJN has reiterated, along with many other civil society organizations, that the liberalisation of trade with Africa will have harmful consequences and accentuate inequality and poverty. Market liberalisation requires that local African companies are able to compete with richer, foreign firms that will flood the African market if the EPAs are approved. Otherwise, the liberalization of the African market will lead to the destruction of the Africa’s infant industry.
The reality of African Countries
In recent years, African countries have been making great efforts to create solid economies that can their needs and reality. The African economy grew by 5.4% between 2000 and 2010, but growth slowed down to 3.3% a year between 2010 and 2015. This slowdown has been caused by many factors such as their excessive dependency on natural resource exports and imported consumer goods, the price volatility of natural resources and the global financial crisis. However, we cannot take economic growth as the only indicator of development because it is not a valid measure of progress. Most of the African countries have been growing for more than a decade while the Human Development index goes down.
For more than a decade, African governments enjoyed large incomes from the high prices of their raw materials and benefited from foreign investments. But this revenue did not benefit the people. The raw materials and agricultural products were exported before being processed. Such processing would have given an added value to the natural resources and agricultural products and would have created stronger industrial and agriculture sectors. Likewise, the foreign investment was focused on the extraction of their natural resources and agricultural commodities which was bad for the communities affected by mining exploitation and large-scale agricultural investments. Many of their governments, blinded by their incomes and quick economic growth, seem to have forgotten that a globalized economy requires enhancement of productive capacity, improvement of infrastructure, encouragement of private initiative, cultivation of competitiveness and reduction of foreign public debt.
The result of all these circumstances is that, despite the economic growth on the continent, the inequality persists and only a few in Africa benefit from the immeasurable wealth of its natural resources and fertile land.
It is legitimate that the EU negotiates economic treaties with African countries to assure their needs of natural resources and agricultural products. However, it is equally legitimate that African countries negotiate economic agreements that protect their economies, strengthen their industries and assure food sovereignty for their people. The infant industry and family farmers of African countries need to be protected by strengthening their capacity to transform and add value to their raw materials and agricultural products; otherwise they will remain simply resource-providers for rich countries. It is clearly an abuse that the EU takes advantage of its economic power to impose conditions and treaties on African countries. For healthy economic treaties to be negotiated, both parties should start from the same economic base (as with the TTIP between EU and US) – and this is not the case.
AEFJN considers that the current EPAs would condemn African countries to be merely exporters of raw materials and agricultural commodities with no chance to develop their economies. Only the elites could profit of European consumer products on the shelves of their supermarkets; the majority of the population would continue to live in the poverty and the inequality would deepen. The EPA would put food sovereignty in Africa at risk and hinder the capacity to transform their natural resources into goods with added value.
The fight for freedom in Africa is not only about political independence from the former colonisation but about the ability to determine their own economic independence, providing food security for their people, profiting from their own rich natural resources, generating more wealth and quality employment and assuring good living conditions for their population.
The EU should review its thinking that economic growth is the way to development. It should rethink its imperious position on economic treaties and be more flexible with developing countries. The value of solidarity should not be confined to EU borders but used as the best way to promote a genuine development policy.
José Luis Gutiérrez Aranda
AEFJN Policy Officer