The Economic Partnership Agreements (EPAs)

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Since 2002, the European Union and the countries of African, the Caribbean and the Pacific (ACP) negotiate "Economic Partnership Agreements". The Economic Partnership Agreements are agreements between the EU and ACP regionally integrated areas, that is to say, common markets, characterized by a common external tariff (CET) and the free movement of goods within the zone.

These agreements set a goal to liberalize trade between the 28 countries of the EU and the 77 ACP countries. The competition of such unequal economies will necessarily be at the expense of the poor. It calls into question any prospect of development of countries in Africa, the Caribbean and thePacific. 

Until June 2000, trade relations between the EU and the ACP countries were based on a "non-reciprocal preference", that is to say that most of the industrial and agricultural products of ACP countries entered European markets freely, at no charge.

The results of this practice, this unique system, have been deceptive. In terms of development of ACP countries, some sectors have certainly benefited from access to the European market, but overall the market share of ACP countries in the European market went from 6.7% in 1976 to 2.8% in 1996. This has led to a strong specialization of ACP exports, concentrated on just a few dozen products, mainly agricultural. The industrial fabric of the countries concerned has not developed appreciably, and productive capacity has remained limited in quantity and quality. European standards have continued to toughen, while global trade liberalization - and therefore the overall decline in EU tariffs - has in fact reduced the commercial advantages enjoyed by these countries vis-a-vis other exporters. 

On the European side, the trade negotiations are conducted by the Commission in greater opacity, without proper control, without intervention by national and European parliaments. For the European Commission, the EPA would promote development through trade liberalization and the establishment of an appropriate framework to attract investment. According to the approach of the Commission, thanks to the free trade zones, the ACP countries benefit from the advantages of the development of trade, economic growth and thus linearly, development and poverty reduction.

Yet we know that the link between trade liberalization, economic growth and development is purely theoretical. For the poorest countries, the liberalization of markets can have dramatic social consequences ... 

The European Commission, which wants at all costs to arrive at the signing of the Economic Partnership Agreements by the end of 2014, is stepping up the pressure on its ACP partners, including conditioning its public support to accelerate the process of regional integration. The positions of West African governments and of the public, individuals and communities express reservations vis-a-vis the current content of the negotiations. Attempts at regional integration are thus being "held hostage" by the prospect of EPA signatures, content negotiations are hijacked and several political and historical regional patterns are being overturned. 

Signing the EPAs would inevitably reduce the response capacity of the ACP States. Customs tariffs are a very significant part of government revenue in West Africa (23% of state revenue for Mali in 2002-2003, 35-40% for Benin, nearly 15% on average for the ECOWAS zone). The first consequence of the signing of EPAs will be a drop in revenues, thereby reducing the ability of state intervention. 

The European Union is one of the leading suppliers of West Africa, and trade liberalization within a common market may degrade dramatically the public finances of states. Capacity to finance investments (social sectors, infrastructure, etc.) will be directly affected and pulled down. A significant decline in tax revenue within ACP states, that would not be compensated otherwise, would today have dramatic consequences in terms of employment (public and private), people’s access to basic services (education, health, drinking water and sanitation, energy, etc.), and risks plunging the country into a new spiral of indebtedness. 

EPAs are also a threat to food sovereignty of ACP countries. For European economies, the impact of signing the free trade agreement with African countries is likely limited since most of the products from these countries already have preferential access to the EU market. On the other hand, EPA will open some new export opportunities for African countries to the EU since today difficult access to the EU market is not a matter of financial charges but rather of the ability of companies to offer products adapted to European market requirements (standards, productivity, etc.). 
In Europe, agricultural productivity is high, farmers receive aid and some of the exports are by-products of agriculture and agri-food industries (low poultry parts, for example). All this allows Europe to export its food production to ACP countries at very competitive prices. These exports often generate a downward pressure on the prices of domestic markets for ACP countries at the expense of producers, agricultural development and food security. This is why the ACP regions should be able to protect and regulate their markets. 

An opening up to European products will also have negative consequences on the industrial sector in ACP countries. Although a few ACP countries have managed to develop some national industries, it is thanks to a policy of economic protection of these areas. Stopping these protections may cause industrial shock with, again, a significant impact in terms of jobs. However, the challenge in these countries is to develop existing processing industries and allow the emergence of new processing industries. 

ACP countries have already liberalized many of their services in the context of structural adjustment programs, mostly for the benefit of European companies. In the banking, insurance, telecommunications, distribution of water and electricity, etc., multinationals, mainly European, are in a dominant position or quasi-monopoly. The pursuit of this liberalization of services in the EPAs, which include health and education, would complete the commodification of services to the profit of the foreign private sector. Moreover, the willingness of the EU to impose liberalization of government procurement and investment, goes against the existing WTO arrangement not to include, for the moment, these dimensions in international trade negotiations. 

In summary, the EPA seem to serve primarily the economic interests of the EU and some ACP companies exporting to the EU at the expense of improving the living conditions of the majority of the population in ACP countries and the reduction of inequalities. 

It is therefore essential to develop mobilization to break with the free-trade basis of the EPA and to fundamentally reorient the current negotiations. 

It is necessary to state publicly: 

  • Finalizing late the agreements by the end of 2014 is untenable.
  • Priority must be given to the consolidation of the regional integration of ACP without external pressure but with the institutional and financial support of the European Union.
  • Negotiations for regional integration should better take into account the disparities in development and production structures of countries in the same region. 

  • Acceptance by the EU to ACP countries to protect their markets, including agriculture, as long as required by the needs of economic and social development of these countries. 

  • Integration in the negotiations, the social dimension, especially the guarantee of the application of fundamental social rights, programs to promote decent employment, education and training, social protection and redistributive policies. Any agreement between the EU and ACP countries must ensure the primacy of human rights and fundamental social rights over any commercial or financial aspect. 

  • The refusal of a further liberalization of the services sector, or of government procurement and investment. The European Union should not impose upon ACP countries the extending of the scope of trade liberalization already rejected by the countries of West Africa during previous negotiations. 

  • The need to mobilize additional resources for the European Development Fund (EDF) to support the current EU social and productive sectors is reduced by strengthening aid for trade and structural adjustment ACP economies. The European Union must ensure compensation by additional funding for any losses in customs revenue resulting from the EPA. EU aid should not serve in any way as a financial exchange nor be conditional on the signing of EPAs. 

  • Mechanisms of extensive consultation and participation of civil society (trade unions and peasant organizations, women’s movements, NGOs, etc.) at all levels during the negotiations, with effective control of ACP and European officials about the content of negotiations of the EPAs. 

  • An overhaul of the WTO, in particular by supporting the ACP proposals for a revision of Article XXIV of GATT, which defines agreements concerning regional free trade, to include the special, individualized treatment. 

In this context, the Alter Summit considers that the Commission and members of the European Union must engage, in substitution for the EPA, in negotiating Accords of Cooperation and Solidarity which are not based on free trade. Such accords should aim for the realization of human rights in the ACP countries, in particular economic, social and cultural rights. The right of regional groups to protect and regulate their markets should be fully recognized, especially for agricultural products and foodstuffs. The political autonomy of ACP countries and regions, their ability to have financial resources at hand, and the fight against tax evasion should not be impeded, but rather supported in the interest of the people.

By Matthieu Moriamez, CGT (France)
Translated from French by Caty Green, coorditrad