Wednesday, October 7, 2009

Africa: "Why surrender market to subsidised European goods?"

[17 Sep 2009] - By: Nasseem Ackbarally

"Why should we surrender ourselves to the invasion of highly subsidised European goods? What will be the impact of capital outflows because of strategic services such as telecommunication, port, energy and water services being liberalised and privatised in the interest of European companies?"

These are the questions that Rezistans ek Alternativ, a Mauritian political movement, wants answers to after their country's government, along with Madagascar, Seychelles and Zimbabwe, signed an interim economic partnership agreement (EPA) with the European Community (EC) at the end of last month [August 2009].

They appealed for an urgent session of the parliament to be held to debate the agreement.

"Those who will benefit substantially from this agreement are not those who will shoulder its consequences," Roody Muneean and Ashok Subron, members of the movement, told IPS.

They argued that technocrats and politicians have not learnt past lessons, referring to World Trade Organisation (WTO) agreements that were signed "hastily" with detrimental results for many developing countries' peoples.

They further deplored the exclusion of the trade union movement, small-scale producers and industries, fishers, consumer organisations and other citizen movements from the negotiating process.

"The market access given to ESA (eastern and southern Africa) countries is nothing more than the further locking of African economies into the neo-colonial export-led strategy, based on cheap labour and degrading working conditions for our people," according to Rezistans ek Alternativ.

Muneean and Subron see the EPA not as a development tool for Africa but as a profit-generating mechanism for EC companies and some local interests.

But those that signed the deal put a different spin on it. Foreign affairs and international trade minister Arvin Boolell of Mauritius, one of the main promoters of the deal, told IPS that the island state wants to use the trade deal to increase trade, promote diversification, attract EC investments and encourage technology transfer.

"We have to constantly wage war against poverty. Improving the lives of our populations expands the circle of opportunities for everybody," he declared.

Sindiso Ngwenya, secretary general of the Common Market for Eastern and Southern Africa (COMESA), justified the EPA by indicating that the latter collectively represents 27 countries.

"These countries are not only the most important trading partners for the COMESA region, accounting for between 20-40% of trade turnover, but they are also very important partners to the region, providing essential development finance in the form of loans and grants through various channels," he observed.

Zambia's industry and commerce minister, Felix Mutati, insisted that there should be "no debate on words, please. The challenge for the sugar farmers in Mauritius, the vegetable growers in Zimbabwe and the honey hunters in Zambia, being bitten by bees but continuing to harvest honey - who all need to put food on the table - is to know how they can connect to the EPA.

"If we can provide some relief to these people in the field whose lives are only about pure survival, the EPA would have achieved something," he observed. However, his country did not sign the deal despite leading the ESA group of 16 African countries.

Quizzed by IPS, Mutati replied: "In the African tradition, the father does not eat first." Later he added that Zambia will sign the full EPA scheduled for October 2009. The Zambian minister is all set to canvass the other ESA states that have remained outside of the process to get inside the tent.

He appealed to EC companies to come to Africa as the continent has "abandoned" bad governance, including instability in economic management and dysfunctional institutions.

The EPA replaces all previous trade agreements between the EC and the African, Caribbean and Pacific (ACP) countries and was ostensibly meant to support their development, strengthen regional integration, and provide for special and differential protection of vulnerable ACP markets.

Under the deal, signatory states export all goods except sugar and rice to the EC duty and quota-free. For textile and clothing, the EC now offers the single transformation rule of origin, thereby allowing enterprises in ESA signatory states to source fabrics from anywhere in the world, transform them and export to its markets duty-free and quota-free.

This new agreement moves away from the traditional, non-preferential trade relationship between ACP group of 77 developing countries and the EC as it is based on reciprocity. Thus, ESA states will gradually liberalise 80% of imports from the EC over a period of 15 years with an initial five year preparatory period.

After this period, 20% of trade, mainly agricultural and final products which countries have deemed too sensitive, will remain completely excluded from any liberalisation.

Sunil Boodhoo, deputy director at the non-governmental Trade Policy Unit in Mauritius, told the press that there was "no compulsion" to sign the EPA. "Any country is free to sign or not but one should measure the consequences for an island like Mauritius that is not a least developed country (LDC) and does not benefit from the Everything But Arms (EBA) trade initiative (for LDCs)," he said.

He further stressed that, if tomorrow, one of the local industries is detrimentally affected by imports from EC countries, Mauritius can always put safeguards in place. "This is the case for any African country," he observed.

The EPAs are being signed with the EC in seven regions of the world. So far, 26 out of the 36 countries have already signed this trade agreement that will change the trade, economic and investment relationship between the European Union and the ACP countries.

Article published courtesy of IPS Africa