Unequal partners

How EU–ACP Economic Partnership Agreements (EPAs) could harm the development prospects of many of the world’s poorest countries

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Summary

The Doha ‘Development’ Round of trade talks has stalled, but the world’s poorest countries remain under pressure to open up their markets with potentially disastrous consequences. These negotiations were meant to ‘make trade fair’, but they were blocked by the USA and EU, unwilling to address the rigged rules and double standards from which they benefit. The EU wants to forge new free trade agreements with 75 of its former colonies in Africa, the Caribbean, and the Pacific (ACP). These imbalanced negotiations of ‘Economic Partnership Agreements’ between the two regions, pit some of the world’s most advanced industrial economies against some of the poorest nations on earth. In addition, the ACP countries are split into six small groups for the negotiations; the smallest group, the Pacific Islands, is negotiating a trade agreement with an economic giant more than 1400 times its size.

The EU has an opportunity to develop fairer trading relations with ACP countries, but such extreme disparities in negotiating power could all too easily produce unfair results, and Oxfam fears that the future development of the ACP countries may be jeopardised by the EU’s tactics. Far more is at stake for the ACP than for Europe. Nearly half (41 per cent) of ACP exports go to Europe, but ACP trade is merely small change for the giant European economy. Firms in the City of London pay more in executive bonuses than Europe spends on buying products from the whole of the ACP. [1] Yet there is every sign that Europe is playing hardball in these negotiations, putting commercial self-interest before development needs. In addition, there is a wider concern that EPAs could undermine multilateralism.

Under the proposed EPAs:

• farmers and producers in many of the world’s poorest countries will be forced into direct and unfair competition with efficient and highly subsidised EU producers;
• regional integration amongst ACP countries will be severely undermined;
• ACP governments will lose substantial revenue along with many of the policy tools they need to support economic and social development.

In September 2006, the EU and ACP will start their mid-term review of the EPA negotiations, a formal exercise scheduled when the EPA process was launched in 2002. [2] The review provides a real opportunity for ACP governments — and the EU — to fully consider the development implications of the current EPA proposals and trends, and to re-focus efforts on putting together a pro-development trade agreement in conformity with the Cotonou Agreement. As this note will show, the proposed EPAs are a serious threat to the future development prospects of ACP countries, and the forthcoming review must be used to force a radical rethink.

Footnotes

1. Total EU imports from the ACP were $35.8bn in 2004; while in 2006, London City firms paid $US 36.2 bn (£19bn) in bonuses. Sources: www.trademap.org; Guardian newspaper, 17 August 2006.

2. Article 37.4 of the Cotonou Agreement. ‘The Parties will regularly review the progress of the preparations and negotiations and will, in 2006, carry out a formal and comprehensive review of the arrangements planned for all countries to ensure that no further time is needed for preparations or negotiations.’

Date of original publication: September 2006