Revival of the ACP group to negotiate with the EU: Hopes & challenges

On 3 April 2017 the secretariat of 79 countries from ACP (Africa, the Caribbean and the Pacific) issued a statement saying they would “speak with one voice” to negotiate the Economic Partnership Agreement (EPA) with the European Union (EU).

This is an exciting development.  In this piece I think through some of the critical issues, and possible strategies and tactics to help bring this promise of ACP unity to fruition.

Why Europe is desperate to sign EPA?

The current relationship between Europe and its former colonies in the ACP region began in June 2000 when the Cotonou Agreement (CA) was signed between them. Both parties agreed that the new agreement would be based on equal, reciprocal relationship.

The Cotonou timetable of phased negotiations was as follows:

1.  Start-up process: ACP-wide consultations, regional consultations

2.  ACP Action Plan

3.  ACP Procedural Guidelines for Preparation and Negotiation of New Trade Arrangements

4.  Capacity Building in Support of Preparation of Economic Partnership Agreements

5.  Phase I – Action Plan from January 2001 to September 2002

6.  Phase II – 2004–06: Substantive Negotiations

7.  Phase III – 2007: Concluding and Signing

Ten years since the Phase III was supposed to conclude, the agreement remains a contested site.  Signed in 2000, the CA was designed to last for a period of twenty years – until 2020. So we have still three years to the end of the CA.

The CA was based, essentially, on six principles:

1.  The principle of equality: the EU and the ACP countries recognize each other’s sovereignty;

2.  The principle of differentiation: the negotiations will take into account the level of development of each country, in particular that of the LDCs and landlocked or island states;

3.  The principle of regionalization: the CA recognizes the ACP countries’ long-term development strategy of regionalization;

4.  The principle of mutual obligations: each side must make commitments as agreed during the course of the negotiations;

5.  The principle of participation: participation by non-state actors such as civil society groups, the private sector and local governments; and

6.  The principle of respect for human rights: monitored through continuing dialogue and evaluation.

So why is the EU violating practically all the above principles?  Why is Europe so desperate to sign the EPAs?

I will give only one example – that of agriculture. Africa needs food for its survival, and other raw materials for its industrialization. And Europe too needs these for its own industrial development –the primary reason for Europe’s colonisation of Africa.  The matter of whose needs must be satisfied - Europe’s or Africa’s – becomes a matter of negotiations between a strong united Europe and a fragmented Africa, which Europe continues to dominate.

That is why, as an African, I am in favour of Brexit and the fragmentation of Europe.[1]

With the entry of China in Africa, Europe is even more desperate because of its relatively uncompetitive trading position vis-à-vis China. Europe must hold on to its former colonies at all cost.

Lessons to learn from the Cariforum-EU EPA

In October 2008 the Caribbean Forum (Cariforum)[2] and the EU signed the EPA. Immediately after its signing, the late Norman Girvan, professor at the University of the West Indies), made a sharp criticism of the process and outcome of the agreement.

“The EC decided the pace of the negotiations, the agenda, the preparations leading up to the negotiations, and the text to be negotiated. It was the EC that produced the text every time, and the ACP ambassadors had to either sign on the dotted line, or negotiate. The EC was always in a hurry to get on to phases II and III. … The result was that the ACP countries were never able to reach their ambitions of regional integration or for that matter a studied analysis of complex issues presented by the EC.” [3]

Everything was stacked against the Cariforum and in favour of the EC.  

How REPA became EPA, then IEPA, then FEPA, then CEPA and now NEPA

In my Trade is War (2015) [4], I trace the history of how, over time – like a distorting mirror – the REPA became EPA, then EPA became IEPA, then FEPA, then CEPA, and so on (‘I’ is Interim; ‘F’ is Framework; and ‘C’ is Comprehensive, and ‘N’ is national). Nobody talks about these. Surreptitiously, the ‘R’ of the original REPA disappeared. REPA became simply EPA. This was a violation of the agreed principle 3 of the CA - the principle of regionalization.

In fact, the ‘EPA’ has further degenerated into ‘NEPA’ (National EPA), for the EC had effectively been negotiating and signing separate national EPAs with individual African countries – much as in the colonial days of divide and rule.

In East Africa, for example, Kenya (pushed by the local and global corporate horticulture lobby) has been negotiating and signing the EPA on its own. In 2007, the Kenya Small-Scale Farmers Forum (KSSFF) filed a case against the government arguing that the EPA would destroy the livelihood of millions of small farmers. In 2013, the High Court ruled that government must not proceed with the EPA without an open debate and the full participation of all the stakeholders. This did not happen, and in spite of the court ruling, in 2014 Kenya signed the EPA. However, it was not ratified.

Warning by the UN Economic Commission for Africa

The UNECA recently released its report advising the East African countries not to sign the EPA.  Here are its main findings[5] :

1.  The bilateral deficit will increase given that the EPA does not represent improved market access for EAC countries to Europe over the short-to-midterm, as tariff eliminations are implemented.

2.  Local industries will not withstand the competitive pressures from EU firms, and the region could get locked even more firmly in its role as a low value-added commodity exporter.

3.  Welfare in the EAC will likely reduce as a consequence of EPA. Most losses will be accrued by Kenya – $45 million – while the EU will register a huge welfare gain of $212 million.

4.  Intra-EAC imports could decline by $42 million – mainly in manufacturing – while tariff revenues from EU imports would decline by $169 million.

5.  The EPA adds to the potential complexity in rolling out an effective industrial policy due to clauses that impinge on the way domestic support measures are provided.

6.  It prevents EAC from later applying a higher tariff rate on capital and manufactured goods like pharmaceuticals, yet EAC countries might be in a position to produce them in the future.

7.  It mainly benefits the EU which needs unrestricted access to strategic materials produced in EAC - as expressed in the 2008 EU Raw Materials Initiative.

8.  The EPA does not mention commitment to additional funding from the EU for development, unlike similar agreements in place with other regions such as ECOWAS.

The EC issues ultimatum, but Tanzania resists

On 13 July, 2016, the European Commission (EC) threatened to withdraw preferential market access from the six countries that in 2014 signed the EPAs. The threat worked. On 1 September, the EC announced that it had received the "instruments of ratification" from Botswana, the Ivory Coast, Ghana, Namibia, and Swaziland, and – significantly - Kenya. 

Later, Rwanda also agreed to sign the EPA, and Uganda (that had been sitting on the fence) also decided to sign. Burundi did not sign, demanding that European sanctions against it be lifted. Tanzania resisted. It would not sign until it was satisfied that the EPA met with its developmental aspirations. Tanzania also said it was waiting to see how Brexit would impact EPAs.

In view of the regionalisation ambition of the East African Community (as also affirmed in the Cotonou Agreement), Tanzania’s standing up to Europe has put especially Kenya in a quandary.  At the time of writing, this matter remains unsettled.

It is against this background that I regard the stand taken by the ACP to “speak with one voice” to negotiate with the EU as an exciting development.

ACP secretariat issued an aide memoire & our suggestions for way forward

As stated earlier, the ACP secretariat has issued an aide memoire stating, a.o. its commitment:

·     to remain united as an inter-governmental organization;

·     to ensure “inclusive policy formulation, decision-making and programme implementation with Non-State Actors … given serious consideration during the negotiations”; and

·     To identify “thematic areas and pillars” of a post-Cotonou Agreement: (i) Trade, Investment, Industrialisation and Services; (ii) Development Cooperation, Technology, Science and Innovation/Research; and (iii) Political dialogue and Advocacy”. [6]

Based on the position taken by the ACP, how do we move forward?

Here are my thoughts:

1.  First, let us recognise that the world has changed since the signing of the CA in 2000. Among other things, the EU is fragmenting. This is one reason why Tanzania is not signing EPA. The ACP secretariat, whilst building ACP unity, should be in no hurry to conclude (let alone sign) the EPAs.

2.  At the same time, we must acknowledge that we are dealing here with embedded structures left behind in the ACP countries by a hundred years of colonial rule. The negotiations – and the underlying “free trade” ideology – are serious barriers to the kind of agreement that the ACP hopes to reach.

3.  Norman Girvan (whom we mentioned earlier) wrote this: “The presence and identity of the ACP … has thus far been weak in the international arena”. He goes on: “if it is to realise its potential beyond Cotonou, this will need, first and foremost, greater investment in building convergence within the ACP, strengthening its institutions, as well as broadening and engaging with its constituency in the ACP regions”.[7]

4.  Africa’s experience in relation to Europe is that trade is only a soft word for war. Europe's threat to impose sanctions as its final weapon of 'persuasion' in the EPA negotiations is an act of war.

5.  ACP governments should encourage active participation of civil society and NGOs. Some of them (for example the Southern & Eastern African Trade Information & Negotiations Institute – SEATINI) have accumulated vast knowledge on the issues the ACP will be negotiating, and can offer helpful suggestions on the strategy and tactics, including drafting of texts. The very language of trade negotiations has to be deconstructed so that it makes sense to the ordinary citizens.

6.  The NGOs, on their part, must continue to expose to our people the neocoloniality of our governments. At the same time, they must avoid a predetermined conclusion that all efforts to work with our political elite are foredoomed. This is dogmatism. Pushed to its logical conclusion, this leads to a deterministic cul-de-sac - nothing can be done until there is an end to capitalism, or until a 'revolutionary leadership' takes over power. That may be so, but we must know that the structures of dependence can be broken, not necessarily in one fell swoop, but chip by chip.

@Yash Tandon

End notes

[1] See: BREXIT and the future of EPA, 27 June, 2016. http://yashtandon.com/brexit-and-the-future-of-epa/

[2] The Caribbean Forum (CARIFORUM) is a subgroup of the ACP established in 1992. It is comprised of 15 Caribbean Community states, plus the Dominican Republic.

[3] http://www.normangirvan.info/wp-content/uploads/2009/03/girvan-a-fork-i…

[4] Yash Tandon, Trade is War (2015), OR-Books, Ch 3. EPAs: Europe’s trade war on Africa

[5] https://www.theeastafrican.co.ke/business/UNECA-warns-region-against-si…

[6] For the full statement, see: https://www.google.co.uk/#q=ACP+Aide+Memoire+-+Basic+Principles+for+ACP…

[7] I am grateful to Annita Montoute, who worked closely with Norman Girvan, for sending this to me.

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