The Media is now awash with stories of the on going calls for the negotiation aimed at the creation of the Free Trade Area between the European Union (EU) and the African Caribbean Pacific (ACP) nations, with the former on the forefront. With the expiry of the Lome and Cotonou agreements the two groupings are negotiating to have a framework of economic relationship. On basis of the past agreements the ACP countries have had access for their goods to the EU market on non- reciprocal basis.
But now it seems the winds have changed direction. The EU is negotiating with African countries so that they should have an Economic Partnership Agreements (EPAs) are aimed at having both parties benefiting. In this regard the ACP countries, to which Malawi is a member country, are supposed to open up their economies so that Europeans goods should have a fair access to ACP markets.
The European Union is saying that the EPA will strengthen local markets as a result trade will boom. This is seen as a catalyst that will assist facilitate local trade and make the region more attractive for investment. One can therefore argue that the Direct Investment Flow will propel to the heights ever thought. On surface one can be convinced that the EU has the interests of the poor countries at heart, but digging deeper the whole issue, with the past experience speaking volumes and the recent revelation of the Reports in disagreements with the whole arrangement, the cooperation that EU is trying to bring has more harm than sweet that their rhetoric, filling the air in the process, can bring.
In fact the ACP countries have been divided into 6 small groups for negotiation, possibly according to the way the regional bodies are.
When it was revealed that that Malawi and other least developed nations under the umbrella body of the ACP will record the alarming levels of unemployment if they agree with the new global European Commission, the latter dismissed the fears. It is being pointed out that if it comes to effect in January 2008, Malawi and other ACP countries will grant 85% free access of products from Europe with the hope that European countries will follow suit.
According to the 12 paged Nairobi Oxfam International titled, Unequal Partners: How EU-African Caribbean and Pacific (ACP) EPA Could Harm Development Prospects of Many of the World’s Poorest Countries, Oxfam believes the EU is the clear beneficiary in the whole issue. As Oxfam’s Report quoted in the Nation early last month says: “On paper it shows Africa’s average cut on tariffs is lower than EU, but in reality, when one computes figures using complicated Swiss Formula, Malawi will open its market about 70% while Europe will have opened theirs by 25%.”
If they can say that the trade barriers will be eased, but with Oxfam’s revelation one is stopped to think further; which means the imbalance levels of trade will still be there. In fact history has it that EU’s history, despite funding different activities, has been detrimental on issues of economies. This is manifested in the way EU market is governed. The EU countries determine prices of the poor countries, whose exports are but primary products.
The problem that is rather an enigma is that even when the EU opens up the barriers, their tendency of subsidizing their products visually makes the products from Africa to have low likelihood of selling, as products from the EU are cheaper resulting in countries like Malawi fall short stand to the heat.
The agreements will also be a graveyard for most industries in third world countries that are national, which it is doubtful if they can compete with multinationals, so are the poor farmers.
“The majority of farmers in Malawi are very poor. It is ridiculous to expect them to compete with imports produced on large, heavily subsidized farms in rich countries, but this is what international rules and practices are frequently making them do,” Mavuto Bamusi was once quoted in Press.
In the same way, the 2004 statistics of the shares of the World Trade shows it was weighing against poor countries. For example, United States commanded 12.4%, EU had 31.2%, Asia was having 9.9%, and on the base Africa had 1.9% as released by Standard Bank of South Africa. By combining the shares that Africa had and Asia, where most members of ACP are, one will be able to see the great disparities that are there in World Trade.
This agreement will have a major democratic implication for the countries involved. In other words, it will change the focus from political and social standards at the expense of trade and economies. At this point, it will have an adverse impact on essential goods and services since it will be more of capitalistic approach, with government having no control.
It is a blunt truth that for long time Malawi as a market has been reduced to a mere dumping ground, where numerous goods, most of them not certified from poles apart countries and companies have been flooding market, there by making local products expensive. As Moore writes in Regional Integration and Regional Governance Under the New African Initiatives: A Critical appraisal (2004), “in global political economy it has always been suggested that the West has far less to gain from African solidarity and as such has done all in its power to impede it.” In this respect it suffice to say that the whole issue of EU-ACP marriage will only lead to demise of many regional blocs like SADC, COMESA, ECOWAS that are in poor countries.
Though the relationship of EU-South Africa trade deal can be pointed at as a positive gesture emanating from Brussels, one only wonders why they started with South African not Rwanda. May be because the country has resources? Or is it indeed one of those ways of trying to bring SADC to it’s kneels since many people believe South Africa holds the key to SADC’s success. It is reported that South Africa- EU agreement contains that South Africa will liberalize 86 percent of its imports over a 12 year period, while the EU will open its market up to 95 percent. According Oxfam this is seen as “offering to some groupings.” And dividing of ACP countries into 6 categories does not help matters either. This might create a scenario where the levels of opening up varying because regions do face different problems. Such being the case some of the countries might be alienated whilst others may be favored like South Africa.
Finally, the whole issue of having the marriage between EU and ACP countries is a kind of agreement that is imbalance, which will only benefit few countries in the ACP, with the majority, some of which had their economy like Malawi almost back on track. This agreement will only force a majority of third world countries in a pit of poverty. As Mandela on 27th April 1998 rejected US president Bill Clinton’s Free Trade Prescription for Africa by saying, “this is a matter over which we have serious reservation….To us this is unacceptable,” ACP countries should not deceive themselves but the only answer should be a big NO!