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May 27, 2008

Comments

C.Lowe

Craig, there is one fundamental difference between CSME and the EU-EPA: the former is new, creating a new trading bloc, the latter is a continuation of existing agreements that we already benefit from.
If we do not sign on to the EPA, we lose considerations we have previously enjoyed.
A few of our industries will be directly and adversely affected, mainly fisheries which as you know, has quite a cooperative chain of supply through to end (foreign) market. Bacardi would have been adversely affected, but they left already for other reasons. Polymers in Freeport also, would have taken a hit.
One potential benefit to Bahamians is that the EU may get the trasparency and accountability out of our government that we as Bahamians have never had. I know it is not a compelling reason for, but it may happen non the less.
Keep studying

Rick

Hi Craig:
Look for a Nassau Institute (www.nassauinstitute.org ) forum on June 24, 2008, now in the planning stages, for some thoughts from Mr. Moree and Mr. Winder.
Also, I asked Mr. Laing at the recent Chamber meeting why the public has not seen The Bahamas position yet and I think he promised it by the end of the month.
Of course they swear all the people on these committees to secrecy so very little comes to the fore. It's like a game of hide and seek.
My position is why not unilaterally drop all perceived barriers to trade, then we don't have to go through this charade and expense.
See this link for a brief report: http://www.weblogbahamas.com/blog_bahamas/2008/05/zhivargo-laing.html

Bill

Hi Craig,

The EPA is the CSME x 40. The only difference is the monetary union, but all the other trappings for trade and ivestments and national development aid are there.

This is a continuation of the Uruguay Round to the Singapore issues on this particular trade push from the EU--- gatta give it to the Europeans, they simply just don't give up!

I wonder what the former Chamber head has to say about this? I forgot her name, but she came across as quite learned!

Best,

Bill

Troy

I wanted to take time to thank you for the great information on this site. I found it to be very helpful and interesting. I will certainly check back soon.

Wallie Roux

EC’s Non-coherent EPA Policy on Africa

By Wallie Roux
Friday, 16th of May 2008

Since the establishment of the European Union (EU) through the 1992 Maastricht Treaty, the bloc has adopted a series of measures in relation to development in Africa. Although contained in all these measures, the ethos of coherence between different EU policies was innately lacking in its practical dealings with the continent.

This truistic non-coherence was elevated to the point where the EU eventually adopted the “EU Consensus on Development” (2006/C 46/01) in February 2006, sagaciously committing itself to a policy of coherence.

However, the Economic Partnership Agreement (EPA) agenda of the European Commission (EC) clearly illustrates the masquerade of its disdainful approach towards Africa in an accelerated disregard for the EU’s coherence policy.

(Note that the EC is the executive arm of the EU, with the mandate to negotiate EPAs on behalf of all the member states.)

These sentiments are perspicaciously evident in the Joint EU-Africa Strategy that was adopted during the EU-Africa Summit in Lisbon in December 2007.

The Joint EU-Africa Strategy includes an action plan (First Action Plan: 2008 – 2010) consisting of eight partnerships and an institutional architecture for closer cooperation.

The third of these partnerships is the EU-Africa Partnership on Trade and Regional Integration (which is closely linked to the fourth partnership, namely the EU-Africa Partnership on the Millennium Development Goals – MDGs).

The three priority actions of this partnership are (i) support the African integration agenda, (ii) strengthen African capacities in the area of rules, standard and quality control, and (iii) implement the EU-Africa Infrastructure Partnership (the latter was signed on 24 October 2007).

The objective of the first priority action is the political and socio-economic integration of Africa in line with the Abuja Treaty. This, the 1991 Treaty became operational in 1994 and gave birth to the African Union (AU), launched during the Durban Summit in 2002. The Constitutive Act of the AU (adopted during the Lomé Summit in 2000) inter alia provided for the preparation of a “Protocol on Relations between the AU and Regional Economic Communities” (RECs).

One of the four expected outcomes of this priority action is to create synergies between the African integration process and the Economic Partnership Agreements (EPAs).

Two of the seven activities to be undertaken in order to achieve the objective are (i) to ensure that EPAs support Africa’s regional integration initiatives, and (ii) to enhance the capacity of the AU Commission, the different RECs, as well as the individual African countries to coordinate and implement this integration agenda.

Throughout this third partnership, reference is made to the AU, the AU Commission and RECs.

During the 7th AU Summit in Banjul on 01 and 02 July 2006, a decision was adopted to recognize only eight RECs in Africa and to suspend the recognition of any new RECs in an effort to rationalize the process of regional integration. The Declaration specifically “Requests Member States, RECs and the United Nations System, as well as development partners to collaborate closely with the Commission in conducting the rationalization process”.

The discrepancy between EPA configurations and AU recognized RECs was already alluded to during the Cairo (June 2005) and Nairobi (April 2006) Conferences of AU Ministers of Trade, with the Nairobi Declaration on EPAs specifically expressing these concerns in, “We urge our development partners to fully respect our … [process of economic integration in Africa] … and to refrain from pursuing negotiating objectives that would adversely affect these existing programmes and process of economic integration in Africa”, and “In particular, we urge the regional economic communities as building blocs for the African Economic Community to ensure that economic partnership agreements with the European Community do not constitute any obstacles to the coordination and harmonisation of their programmes and activities, including for the progressive formation among themselves of free trade areas and customs unions on a priority basis and ahead of any similar agreements with the EC.”

The Southern African Development Community (SADC) is one of the eight RECs recognized by the AU. The EC’s EPA agenda resulted in the SADC bloc’s splitting into four, with Member States now negotiating EPAs as part of the Central African-, the Eastern African Community (EAC)-, the Eastern and Southern African (ESA)- and SADC configurations. This is a clear indication of the EC’s adroit capitalization on the volatility of the African regional integration initiatives and the exploitation of the gullibility of countries under the AU efforts towards African unity – and in the process to exonerate itself from the blame of any split-ups of existing RECs.

Taking into account the objective, expected outcomes and activities of the first priority action of the EU-Africa Partnership on Trade and Regional Integration, it is clear that the EU has a total disregard for the AU and its mandate for regional integration in their EPA negotiations with African countries.

Although the EU committed itself to a policy of coherence through its February 2006 adopted “EU Consensus on Development”, there is no coherence between the Joint EU-Africa Strategy’s Partnership on Trade and Regional Integration and the EU’s EPA Agenda. The latter is undermining the AU’s regional integration efforts and it contradicts the EU’s Maastricht Treaty of 1992, the Amsterdam Treaty of 1997, the provisions of the 2000 Cotonou Agreement, the EU’s 2000 United Nations’ Millennium Declaration, the EU’s adopted series of measures to accelerate the progress towards the MDGs, and the 2006 adopted “EU Consensus on Development”.

The Maastricht Treaty of 1992 contains three objectives for EU relations with developing countries and least developed countries (LDCs), namely a campaign against poverty, the promotion of sustainable development and the integration of these countries into the world economy. An important factor is that the Treaty stipulates coherence between Community policies to take account of the EU’s development objectives. In 1997 the Amsterdam Treaty also added the principle of consistency of all external activities of the EU.

In June 2000, the EU signed the Cotonou Agreement with the ACP countries. Apart from trading arrangements, the Agreement also contains development strategies (Title I). Article 19.1 includes, as principles and objectives, poverty reduction/eradication, sustainable development and the integration of the ACP into the world economy. These objectives are also contained in Articles 1 and 34.1. The crucial aspect of coherence is addressed in Article 12. All these issues can be cross-referenced to the Maastricht Treaty.

In September 2000 the EU signed the United Nations’ Millennium Declaration for achieving the MDGs by the year 2015. These goals include inter alia the eradication of poverty (Goal 1) and a global partnership for development (Goal 8). Although the Cotonou Agreement was signed before the time, Article 19.2 makes explicit provision to accommodate the MDGs.

During 2005 the EU adopted a series of measures to accelerate the progress towards attaining the MDGs, namely “The EU’s contribution” [COM(2005) 132 final/2], “Financing for Development and Aid Effectiveness” [COM(2005) 133 final/2] and “Policy Coherence for Development” [COM(2005) 134 final].

Contained in “The EU’s contribution” measure are repeated references to the relations between policy coherence for development, the direct and indirect impact of other policies and the support to attain the MDGs. Also mentioned is that the policy coherence and quality of aid “should be applied to Africa as a priority”, i.e. to “ensure that Africa is the number one beneficiary of these new approaches …” Financial support is pledged to develop the capacity of the AU and especially the AU Commission. Special reference is made to the Cotonou Agreement as “a privileged but non-exclusive framework for the implementation of this approach.” In conclusion it is stated that this approach should pave the way for a new EU development strategy.

The “Financing for Development and Aid Effectiveness” measure covers the issue of Trade Related Assistance in detail. The “Policy Coherence for Development” measure went beyond development co-operation and includes the impact of EU non-aid policies (like trade, agriculture, food security, fisheries, etc) in attaining the MDGs. In the area of policy coherence, priority areas were identified and for each of these “coherence for development commitments” were defined to accelerate the progress towards the MDGs.

The “EU Coherence for Development Commitments” inter alia targets trade, agriculture and fisheries. Under trade the EU acknowledges that it “is a powerful tool that contributes to MDG objectives …”. Here the EU made two commitments towards the EPA process, namely to ensure a development and sustainable outcome, as well as to address agriculture as a key area in the negotiations. The EU will also work to integrate trade into its development strategies.

Following from the above, during February 2006 the EU adopted its “European Consensus on Development”. “The primary and overarching objective of EU development cooperation is the eradication of poverty in the context of sustainable development, including pursuit of the MDGs.” This objective can be cross-referenced with the already mentioned objectives in the Maastricht Treaty, Articles 1, 19.1, 19.2 and 34.1 of the Cotonou Agreement, the United Nations’ MDGs, the EU’s measures to accelerate the progress to attain the MDGs – the golden thread of convergence through all of these is clear.

The EU, through this Consensus, committed itself to policy coherence for development: “We reaffirm our commitment to promoting policy coherence for development, based upon ensuring that the EU shall take account of the objectives of development cooperation in all policies that it implements which are likely to affect developing countries, and that these policies support development objectives.” In addition, “The EU is fully committed … that non-development policies assist developing countries’ efforts in achieving the MDGs.”

In addition, the thrust of this is further endorsed in “To make this commitment a reality, the EU will strengthen policy coherence for development procedures, instruments and mechanisms at all levels, and secure adequate resources and share best practice to further these aims. This constitutes a substantial additional EU contribution to the achievement of the MDGs.”

Specific reference is also made that support to middle income countries (like Botswana, Namibia and Swaziland) remains important to attain the MDGs, and that agriculture remains crucial for poverty reduction and growth. From a multilateral perspective this is but one causal factor towards the attainment of the MDGs. Trade could contribute to development only if it is part and parcel of a development strategy.

The development needs in Africa towards attaining the MDGs outshines the trade needs in most developing countries (as is the case with the majority of the members in the SADC-EPA configuration). This is confirmed by a Case Study on EU External Trade Policy with a focus on EPAs, by Alan Hudson (Centre for European Policy Studies, 2006).

He concluded that development assistance is not only coupled to financial assistance, but the dimensions of development go beyond that and should be fully integrated into all aspects of the EPA policy, including trade and trade related aspects.

“Treating development as a parallel track in trade negotiations is not conducive to the production of development-friendly outcomes.” Perhaps a more crucial conclusion from the case study in view of the dominant role of the Directorate-General (DG) Trade in the EPA negotiations: “Policy coherence requires intra-Commission coherence. If development objectives are not to be marginalised, then DG Development must be enabled – in terms of resources and mandate – to represent development objectives across the board of EPA discussions, and must not confine itself to questions of the delivery of technical and financial assistance.”

In addition, “Effective negotiations with developing country partners also require intra-Commission coherence. It is unacceptable for developing countries to find themselves thinking they are dealing with the Commission as a whole, only to find that they are dealing with one part of the Commission – DG Trade – which is unable to engage on questions of development assistance.”

Despite all this, it seems like the EC has a carte blanche to negotiate EPAs with African countries according to their own set agenda whereby they could discard the provisions of European adopted policies at will. This agenda caused new regional configurations in Africa that are without any legal constituencies and without any supporting institutions, i.e. groups of rustled up countries that would eventually have to institute new legal instruments to make EPAs legally binding, while in the process being compelled to neglect their own legal obligations to existing regional arrangements.

The EC’s African scorecard of initialled interim EPAs (IEPAs) at the end of 2007 is more than a telling tale of this reality – none of the original four African EPA configurations initialled IEPAs with the EU. This was regardless of the EC’s exploitation of the vulnerabilities of individual countries within the EPA configurations to initial IEPAs, utilizing underhand tactics such as the threats of losing preferential market access, the introduction of punitive tariffs with non-initialling, the threat of a multilateral challenge should the interim arrangements not be notified to the World Trade Organisation (WTO) and the kalopsia of development aid.

Even despite this, only 15 African countries (out of 44) eventually initialled IEPAs at the end of last year – here the question should rightly be asked: why? (Note that Namibia initialled an IEPA with a list of conditions that should be revisited before any negotiations towards a full EPA could commence – not that it matters to the European Trade Commissioner, Peter Mandelson, according to his latest statements.)

This state of affairs is a gross violation of the EPA principle of regional integration as prescribed in Articles 35.2, 37.3 and 37.5 of the Cotonou Agreement. Furthermore, the EC’s tactics and the eventual tally at the end of 2007, place a huge question mark behind the motives of their EPA agenda.

According to this agenda these new trade arrangements should be free trade agreements between the EU and the different African, Caribbean and Pacific (ACP) configurations. The outcome at the end of 2007 is more evident of bilateral trade agreements between individual countries within EPA configurations and the EU.

This in itself creates a plethora of new legal challenges to make these ‘bilaterals’ legally binding in terms of the already existing regional integration initiatives in Africa. Where the EC initially blamed the so-called spaghetti-bowl syndrome of overlapping memberships to different regional integration arrangements in Africa for the slow pace in the EPA negotiations, they followed suit at the end of 2007 to cause an equally confusing legal spaghetti-bowl conundrum – something that the African countries do not need (and deserve) at this stage.

However, as the recalled recent history of the EC’s negotiating tactics could attest, the provisions in the European adopted policies and those in the Cotonou Agreement were merely treated as stumbling blocks in order to secure an initialling on the pages of an IEPA text. For example: Cotonou Articles 37.6 and 37.7 refer to the acquis principle where no ACP country would be worse off post-Cotonou than before. However, the developing countries in the ACP group were threatened with punitive tariffs of the EU’s Generalized System of Preferences (GSP) should they decide not to initial IEPAs at the end of 2007.

Even more importantly, all ACP countries that initialled IEPAs are now prevented to utilize the cumulation provision in the Cotonou Agreement with those ACP countries that did not initial IEPAs. This in itself created various production problems in the Southern African region, since South Africa decided against the initialling of an IEPA.

Why is the EC doing this? Why are countries being punished for not following the EC route (despite explicit provisions that it should not be allowed)? What are the real motives of the EC’s EPA agenda?

No wonder Klaus Rudischhauser, the Director of ACP relations in the EC, in February this year referred to the EC’s 2007 EPA negotiations as a public relations disaster and a huge communications failure.

The most worrying factor to Namibia in the EPA process should be the EC’s triggered (uninvited) pressure on the Southern African Customs Union (SACU). The EPA process has created a rift between the SACU Member States at the end of 2007, because of a lack of a common negotiating mechanism, i.e. the EPA process has overtaken SACU’s own institutional reform process.

The EC’s actions in this particular case (again) are totally in contravention with the provisions as stipulated in Articles 34.1, 34.2, 35.2, 35.3, 37.3, 37.5, 37.6, and 37.7 of the Cotonou Agreement. This could eventually lead to a split in SACU, which (again) is contrary to the recently adopted EU-Africa Partnership on Trade and Regional Integration of the Joint EU-Africa Strategy.

Since the EU, through the Joint EU-Africa Strategy, wants to move from a donor and beneficiary relationship with Africa to a partnership of equals, the EC’s EPA agenda should either be immediately adapted to the European coherence policies, or it should be discarded in total. If not, the EC should demonstrate a willing courage to explain to the African countries why their negotiating tactics are so easily condoned vis-à-vis the European coherence policies and the provisions in the Cotonou Agreement.

Given the above, maybe the concluding paragraph of the EC’s 2008 EPA agenda should rather read something in the line of:

Since we have failed in our endeavours to exhort the African countries into a predicament, the efforts in 2008 should be to coerce those countries with every conceivable pressure at our disposal to sign full EPAs before the termination of our term of office – and (note) in this case, forget all the EU policies in this regard and only consider the advantages that China and India could gain in Africa should we fail.

(What? Cotonou provisions? Not my problem. I wasn’t Trade Commissioner when the Agreement was signed – sela!)

Wallie Roux is an Independent Trade Policy Analyst
NAMIBIA
Tel: +264 61 227648
Mobile: +264 81 288 2626
E-mail: wallie@mweb.com.na

http://www.newera.com.na/page.php?id=7148

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