Sunday, April 25, 2010

"Impose an Embargo on the EPA Talks" asks Respected Ugandan political economist Yash Tandon

"EPAs Will Undermine Democracy in Africa" [Part II]

, 2010 (IPS)

Respected Ugandan political economist Yash Tandon has added his voice to the call for a moratorium on the negotiations between African countries and the European Union (EU) on the trade deals known as economic partnership agreements (EPAs).

This follows the call by Ablassé Ouedraogo, former minister of foreign affairs of Burkina Faso and former deputy director of the World Trade Organisation (WTO), that the EPA negotiations between West Africa and the EU should be suspended.

Tandon now works as senior advisor to the Geneva-based South Centre intergovernmental think tank for developing countries after serving as the centre’s executive director.

He visited Cape Town as speaker at the 86th Harold Wolpe Memorial Trust Open Dialogue where he described the situation with the EPA talks as "a turning point for Africa".

Q: What do you mean by the destructive course of the EPAs?

A: The EPAs are driven mostly by European interests. It is an asymmetrical negotiation ... driven mainly by considerations of power exercised by the EU and by weak African governments that are dependent on economic aid from Europe and access to markets in Europe. It’s a very unequal relationship.

Secondly, the effect of the negotiations at the moment is total fragmentation of Africa. One example: in Southern Africa, South Africa has refused to sign the interim EPA but it has been signed by Botswana, Lesotho, Swaziland and Mozambique.

These countries will be able to import products from Europe which could then, through the Southern African Customs Union (SACU), find entry into South Africa.

South Africa could take action to prevent this but (such action) will dismantle SACU. I hope that South Africa does not do it because it (will) simply implement what the Europeans want. The Europeans want to divide and conquer Africa.

The second example is that countries like Zambia and Zimbabwe, which were the founding members of the Southern African Development Community (SADC), are not even part of the negotiations with Europe within the SADC framework.

They are negotiating within the East African (bloc). Here, again, is the breakdown of SADC and creation of a new bloc including Zimbabwe and Zambia that is different from the regional groupings that Africans had agreed to in the Abuja Treaty.

Q: What is the alternative?

A: We must do this in two steps. First, we must put an embargo on negotiations with the EU until we have our house in order. As long as the EU goes on putting pressure on us and forcing individual countries to sign separately, we cannot even think of an alternative. We have time. Europe does not have time.

Then I suggest that the heads of state of SADC and East African countries meet for half a day and mandate their trade ministers to negotiate a COMESA (Common Market for Eastern and Southern Africa)-like customs union that should include COMESA, SADC and the East African Community to begin putting in place what they had agreed in 2008.

They should lay out a time-scale (for harmonising) their customs tariffs and complex issues like rules of origin, facilitation of trade and transportation and information networks.

This will take time but they should work out agreements on these issues in order that these countries first drop barriers to trade and investments and movement of people amongst themselves before they open up to the outside world. And by outside world I mean also China, India, Brazil and the U.S.

Our parliaments must take their responsibility seriously. None of the parliaments in our countries is sufficiently aware of what is happening.

How ironical that our parliamentarians can spend a lot of time talking on local issues but are oblivious to issues of a global nature that can have serious and irrevocable – except at great cost – consequences for our countries and the region.

The committees in parliaments that look at trade and treaty issues should compel our executives to put these treaties before parliaments to be fully debated, in view of the public and the media, in order for them to understand what the implications are.

And if they think that the implications are negative for our people, as in fact is the case, they should refuse to ratify these.

Q: What is the feasibility of your alternative?

A: It depends on the political will of the leadership and the extent to which they can be pressurised by the people and those economic interests that will be hurt by the EPA. It’s a political question.

In our countries there are export-sector interests that want to enter into EPAs because they want access to the European market.

But (small and medium industries and businesses) will lose out: small clothing firms; firms that provide food domestically; small manufacturing sectors that produce goods and services for the local, domestic or regional market.

These firms are not so much involved in the negotiations and are unaware that they will be hurt very badly if we open up markets to Europe.

It is feasible to reverse the situation provided three things happen. First, provided there is political will on the part of our leadership. Second, provided our people and parliaments are able to pressurise our governments to be sensitive to the domestic needs of our countries.

Third, provided those commercial and business interests in our countries that depend on the domestic and regional market are mobilised to put their case, as opposed to the case of the export-oriented industries.

"EPAs Will Undermine Democracy in Africa"
The current course of the talks on economic partnership agreements (EPAs) is particularly destructive for low income African countries and may contract democratic space in such countries even further.

So says Yash Tandon, Ugandan political economist and senior advisor to the South Centre intergovernmental think tank on developing countries in Geneva, Switzerland.

"I would say that small countries through the EPAs will lose all their independence and sovereignty. Political independence that they fought for 20, 30 years ago will be compromised," Tandon told IPS during a visit to South Africa.

Q: How do the problems presented by the EPAs affect poorer countries in Africa?

A: If you look at the sections which the smaller counties of Africa are being forced to sign with the EU, you find that some of these include issues that are already precluded by the World Trade Organisation (WTO).

In the WTO it is agreed that issues like competition policy, investment policy and government procurement - the so-called Singapore issues - are outside the WTO remit. But countries in Africa are being forced by the EU to negotiate these as part of the EPA.

The South Centre has carried out extensive analyses and found that including these issues will more or less erode any policy space on the part of the countries that sign the EPAs.

For example: government procurement deals with goods and services that the government provides as part of its obligations to the people. The government issues tenders for equipment in hospitals or schools and for services like refuge collection.

These are services that should of necessity be provided by the state but when you make these subjects of international negotiations and international treaty, you open up these services for international tender. Because European companies bring with them the power of money and influence, these services can be taken away from local companies.

Smaller countries don’t have the capacity to negotiate on equal terms with Europe. Look at Swaziland, Lesotho, Namibia and my own country of Uganda. Partly because of their size and their dependence on aid from European countries, they are very weak in the negotiations and the (resultant) effect on them is serious.

For one, they will lose policy space on matters related, for example, to industrialisation, agriculture and food security. The governments will not be able to make policies that are necessary for them to service their own people.

Secondly, in the present global economic crisis, these countries are likely to look to Europe and to the U.S. and the International Monetary Fund (IMF) for bailing them out. I hope they don’t do that because we do have alternatives.

But the present leadership in our countries is so psychologically attuned to getting aid from outside that they are likely to go to these very institutions. The effect will be even more serious than that of the World Bank’s structural adjustment programmes over the last 20 years.

Thirdly, the EPAs will undermine the democratic process within these countries because these countries will be accountable to the donors rather than to their own electorates.

Q: Why are EPAs an issue now?

A: The EPAs have become urgent mainly because of the pressure put on us by the European Commission.

The EU is desperate to conclude an agreement with African countries because in the present period of trade liberalisation, combined with the global economic and financial crisis, there is an intense struggle for the markets and resources of the world.

Q: Since negotiations began in 2002, what has been achieved, considering the original intention to facilitate trade?

A: The Europeans have not got it all their way. Eight years down the road there is some self-awareness and resistance building up in Africa. That said, there have been some negative developments already.

The European Commission has negotiated a comprehensive EPA with the Caribbean countries. This has weakened the stand and broken the unity of the ACP (African, Caribbean and Pacific) countries.

In Africa, there are some countries in ECOWAS (Economic Community of West African States), like Ghana and Ivory Coast, that have signed the interim agreement. This has fragmented ECOWAS, although big countries like Senegal and Nigeria are still standing strong.

East Africa has allowed itself to be persuaded to sign the interim agreement, which is tragic. In Southern Africa, four countries have signed the interim agreement but the others are holding out. So there is some hope there.

I am a bit more optimistic than many people. Why? Because even in the case of Botswana, Lesotho, Swaziland and Mozambique, there are still pending issues such as export tariffs. These are an important means of revenue for small countries and of securing control over national resources for local processing with added value.

The other extremely important issue is the most favoured nation clause. There is no reason why we need to sign an MFN clause. Under the WTO rules, it is possible for the South to carry out their own trade without such concessions to the North. That is quite legitimate and legal.

There is no reason why our countries should not be able to sign agreements with other countries in the South without offering them to the EU.

Q: Your 2008 book is entitled "Ending Aid Dependence". Can Africa escape the trap of aid?

A: Most of our countries in Africa have become so donor-dependent for their development that they have sacrificed policy space in return for money.

One has to look into the budgetary systems in our countries and ask, why are there deficits? Once this exercise is carried out, there is no reason why any country in Africa should be short on budget.

Not only can we liberate ourselves from aid and do away with it, but it is obligatory that we do so.

Q: Including the low income nations?

A: Especially the low income countries of Africa. I don’t mean we can do it at the snap of a finger. In my book I propose a seven-step strategy, beginning with ending our psychological dependence on aid.