Tuesday, August 26, 2008

African countries face impending harms after signing EPA

African countries face impending harms after signing EPA
Timothy Kitundu
The Economic Partnership Agreements (EPA) are a scheme to create a free trade area (FTA) between the European Union (EU) and the African Caribbean and Pacific (ACP) countries.

The agreements, according to Wikipedia free encyclopaedia are a response to continuing criticism that the non-reciprocal and discriminating preferential trade agreements offered by the EU are incompatible with World Trade organization (WTO) rules.

According to OXFAM’s ‘Slamming the Door on Development: Analysis of the EU’s response to the Pacific’s EPA negotiating proposals’ a major problem is the reciprocal nature of the trade agreement, particularly since the EU has a national income over one thousand times that of the Pacific.

It is further revealed that a reciprocal agreement between such unequal regions may have the same rules for each party, but the result will favour the EU over the ACP countries.

The comparison is that of putting a schoolboy in a boxing ring with a heavyweight pro.
Even if the schoolboy is given a few extra points on the scorecard, the basic rules
of boxing are the same for each, and the boy will get beaten up every time.

As the EC’s own website explains, “Our experience tells us that FTAs between a large market like the EU and small economies are not easily sustainable and often lead to a deficit for the weaker partners”.

“The creation of a free trade zone with the EU is totally inappropriate for the agricultural sector given the enormous differences between the ACPs and the EU in productivity and competitively, differences which are amplified by the considerable public support from which European agriculture benefits in accordance with EPA 07,”

If the ACP countries sign the EPA document, a lot of problems will occur including unfair competition with EU states in trade. It has been noted how competition from imported EU milk powder and dairy imports threatened 600,000 small-scale dairy farmers in Kenya.

This threat was successfully overcome because the government was able to raise tariffs from 35% to 60% to protect these livelihoods. Africa needs tariffs and the ability to raise and lower them to protect food security crops and infant industries - just like many EU countries did in the past when they were developing.

"I come from a small fishing village in Ghana. Members of my family fished for their livelihood, but fishing has become impossible since larger European fishing vessels came and fished our seas empty. The same happened with poultry. EU imports of frozen chicken wings destroyed the local market…EPAs are free trade agreements, and as such, they will bring poverty to Africa." Tetteh Hormeku, Third World Network, Ghana

“If Africa will sign the agreement, then Africa will be wiped out of development,”
Peter Agoa, EcoNews Africa, Kenya.

People used to export products like copra, fish, and kava to European countries, but this has gradually been phased out due to restrictive rules of origin, technical and other barriers established by the European Union. We have no capacity to address these problems.

Grant Percival, President, Samoa’s Association of Manufacturers and Exporters, says that the EPA will change the way we collect revenue. By eliminating tariff revenue and creating consumer taxes, governments will pass the tax burden on to the poor, creating social inequity.

No comments: