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TRADE: EU Forges Ahead With EPAs Despite Global Crisis

Hilaire Avril

PARIS, Mar 26 2009 (IPS) - Experts agree the current financial crisis is largely due to economic deregulation. But despite the downturn’s dramatic effects on developing countries, the European Union (EU) is still pushing for the trade liberalisation deals called economic partnership agreements (EPAs) to be signed by African governments.

In their proposed form, these agreements would open these countries to the full brunt of international competition. For African countries, the timing could not be worse.

Dominique Strauss-Kahn, who heads the International Monetary Fund (IMF), recently told African leaders gathered in Dar Es Salaam that ‘‘even though the crisis has been slow in reaching Africa’s shores, we all know that it is coming – and its impact will be severe’’.

According to IMF figures, growth in sub-Saharan Africa is expected to slow to three-and-a-quarter percent in 2009, from five percent in 2008.

‘‘The threat is not only economic. There is a real risk that millions will be thrown back into poverty,’’ Strauss-Kahn warned from the Tanzanian capital.

For many African countries, the pendulum is already swinging.

Global demand for many commodities has plummeted in recent months, depriving many African countries of much-needed export revenue.

According to Oxfam France, which campaigns for development, foreign direct investment in African countries and the African diaspora’s remittances to the homeland (estimated at 251 billion dollars for 2007) have both been decreasing since the end of last year.

Bilateral development assistance has also started diminishing, as developed countries’ purses shrink with the growing recession.

Regardless, ‘‘the European Commission is pressing for the (economic partnership) agreements to be signed into full force by the East African Community, the Southern African Development Community and West African states before the end of its current mandate in September 2009’’, writes Oxfam.

Signing and implementing EPAs is their current embodiment could deepen the economic and social crisis affecting many African nations since food prices started skyrocketing in 2008.

EPAs would further weaken local agricultural production and markets, by exposing them to increased competition from stronger, larger and heavily subsidised European farmers.

Tearing down protective tariffs, as EPAs require, would also cause ‘‘a drastic fall in customs revenues, and further tighten African states’ budgets,’’ according to Oxfam.

Some African leaders have decided to take their views to European parliaments themselves.

At the beginning of this month, political and labour union representatives from Burkina Faso, Cameroon, Chad, Ethiopia, Kenya and Zambia have set on a tour of the French, Belgian, British, German and Spanish capitals to meet with government officials and farmers’ unions.

The delegation – among which were Catherine Kimura, chairperson of the trade committee of the East African legislative assembly, and Mary Sakala who represents the Eastern and Southern Small Scale Farmers in Zambia – had a simple message: in Africa, the economic and financial crisis has already turned into a food crisis, and EPAs will make it worse.

Talking to French, German and European members of parliament, the delegates reminded them of the previous trade regime’s fundamental principle: the now-defunct Lomé agreements were based on the rule of equality between countries, whether from the North or South.

‘‘Most African parliaments have not been included in these negotiations,’’ says Jean-Denis Crola, responsible for the economic justice campaign with Oxfam France. ‘‘There is also a strong demand for larger involvement of civil society in these negotiations, as in some countries, 80 percent of the labour force are agricultural workers,’’ he adds.

Some sectors have already been devastated. In Burkina Faso, tomato puree imports have almost quadrupled between 1994 and 2002. Cheap EU-subsidised preserves have flooded markets, leaving tens of thousands of local producers bankrupt or unemployed.

Consequently, in 2007 60,000 tonnes of Burkina Faso’s tomatoes were left to rot, as consumers bought from the European competition, according to Oxfam figures. Togo and Ghana are facing a similar threat.

According to Catherine Kimura, ‘‘rather than maintaining Africa’s dependency on developed countries’ benevolence, the current food crisis highlights the need for a fair agreement, focusing on development’’.

The crisis’ effects could prove to be even more catastrophic on the long term.

‘‘Tighter global finance will restrict private investments and trade credits. The global downturn will see lower export demand, commodity prices and remittance flows for poor countries, and is threatening social sector provisions and social stability,’’ writes the British Foreign Office, ahead of the Group of 20 summit to be held in London on April 2.

Some Western leaders have started acknowledging the urgency of the crisis publicly.

Douglas Alexander, British Secretary of State for International Development, recently forecast that ‘‘the prospects for achieving the Millennium Development Goals face serious threats, as the global economic crisis undermines progress in developing countries and erodes support within developed countries’’.

And yet, support within developed countries, if often fragile, is vital. Olivier de Schutter, the United Nations’ Special Rapporteur on the Right to Food, stated that ‘‘the decades-long liberalisation of agricultural trade has led to the strengthening of a globalised food system where prices are fixed by dominant players with excessive market power, a situation which is detrimental to the majority of farmers and countries’’.

EPAs, by further extending the liberalisation of agricultural trade, would reinforce this dominance.

‘‘The idea of a ‘level playing field’, even after the removal of trade-distorting measures, is meaningless given the huge differences of productivity levels between least developed countries and developed countries,’’ de Schutter added.

‘‘These differences are the result of more than 150 years of planned protection in industrialised countries, followed by subsidised liberalisation,’’ he acknowledged, concluding the United Nations meeting on food security held in Madrid in January.

Now, African representatives are requesting similar protection, at least while they weather the storm.