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The Cotonou Agreement between the European Union and the African, Caribbean and Pacific (ACP) countries will impede
efforts at strengthening South-South economic collaboration. In
the particular case of Africa it will decisively undermine the strategy
for continent-wide collaboration for economic development and
leave the decades old Africa in place. Despite a large dose of
rhetoric about food security the Agreement, successor to
the Lome Convention, is likely to reinforce the structural
impediments to food security in the ACP countries.
The ACP-EU
agreement signed in February 2000 contains provisions on the term
of access of European investors and businesses to ACP economies,
which, if enacted by the ACP, will remove the policy instruments
these countries have put in place for a balanced development of their economies
both individually and in relation to each other.
Under
part 3 of the new agreement, the parties agree to start negotiations
in the year 2002 for the purposes of what is called "economic
partnership agreements" (EPAs) to come into
effect by 2008. From then on, in its dealings with Europe, the
ACP group as it exists will cease to have any importance as far
as trade relations with Europe is concerned.
The
Lome Agreement was a general trade and aid agreement applicable
to all participating ACP countries. Under the post- Lome IV
regime, Europe will be establishing differential relationships
with these countries. Three broad country categories are envisaged:
(a) least developed country (LDC) members of
the ACP group; (b) non-LDC who feel able and ready to enter into
EPA regime, and (c) and non-LDCs who do not feel able/ready to
enter into the EPA regime.
Each category
will entail different trade relationship with EU. The LDCs,
which are supposed to the poorest of the poor, will continue
to enjoy the non-reciprocal trade preferences for their products
in the EU markets as they enjoy now.
In
addition, the agreement commits the parties to a process which
by 2005, will allow duty free access in EU markets for essentially
all products from the LDCs. The phrase, essentially all, rather
than all the products, is vigorously defended by the EU, and
represents a formula by which it can keep out ACP products which
may be in competition with EU products, but may be in areas where
these countries need access to EU markets the most.
For non-LDC
countries which are not able to enter in partnership agreement
with the EU, the latter will, after assessing their situation
in the year 2004, provide them with a "new framework for
trade which is equivalent" to what they have now, but
in full conformity with the rules of the WTO. This means basically,
that such countries will lose their specific preferential status,
as under the Lome Conventions. Whatever preferential access
they get will be that which the EU grants to all developing countries.
Non-LDCs
which are willing/able to enter into the EPA regime will then
do so. The main content of these relationships will be the reciprocal
removal of barriers to trade between the parties, that is to
say each party -the EU and the respective ACP economies will
grant equivalent access in their respective markets to products
from the other party.
This
categorisation does not mean that countries in the groups will
necessarily have to negotiate jointly with the EU. This applies
particularly to the non-LDCs. Countries can decide whether or
not they are willing and able to enter into EPAs or other forms
of equivalent arrangements. But even for those who want to enter
into the agreements, it remains to be determined at what level
and how commensurate with the stages of development and their
developmental requirements.
African
countries are by far the biggest bloc in the 71 country ACP grouping.
The implications of the Cotonou Agreement for the continent's
integration agenda are sharply illustrative.
The
rationale and process to date of African efforts at economic
integration, whether at the continental or regional levels, can
be derived from particular weaknesses inherent in their economies.
Most of these economies are too small to be viable. Of equal
importance, the internal production, distribution, and other
structures of these economies are unrelated to each other. This
internal fragmentation is replicated at the continental level,
where most countries export similar agricultural crops to (typically European)
markets.
Therefore,
the concern with economic integration, as elaborated for instance
in the Lagos Plan of Action (LPA) and the latter Abuja Treaty, is to
relate these economies to each other so as widen the markets for
products and also link raw materials, capital and other factors
of production to each other. Equally important is to ensure an
equitable balance so that some countries, especially the small
ones do not lose out.
Given
the obvious difficulty of bringing such diverse economies and
traditions together, it is understandable that the strategy of
the LPA and Abuja treaty is to encourage the existing
regional economic groupings like ECOWAS and SADC to serve as
the building blocks for the gradual achievement of continent
wide co-ordination of African economies.
The European
Union
has different priorities. African economies have always served
a particular function for Europe: as sources of raw materials
and markets for their products. But for European policy makers,
the broad grouping of African (as
well as Caribbean and Pacific) countries within which Europe has met these
needs in the past is no longer necessary.
In part,
this is because Europe is no longer dependent on African raw materials.
In part, the sustained collapse of most African economies means
that income levels in most of these countries do not make them
effective markets for Europe's industrial goods. Europe's target
markets are the so-called high-performing economies, in and outside
Africa, and for these it is in competition with other industrial
countries like the USA and Japan.
The proposed
free trade agreements with these selected economies address its
competitive need to secure these target markets (with the added advantage
of dispensing with the administrative and financial burden of
the former bigger groupings). Barely a month after concluding the new
partnership agreement with the African, Caribbean and Pacific
(ACP) countries in February
2000, the European Union concluded a free trade agreement with
Mexico, a country which is already part of a free trade area with
the USA and Canada.
Not only
will these arrangements reinforce the distinctions in economic
fortune among African countries, as the less successful economies
are hived from the more successful and encouraged to deal with
Europe, their main market, in separate ways. The whole point of
economic co-operation arrangements, which group stronger
and weaker economies together in order that they may reinforce
each other in the removal of structural imbalances, is reversed.
In
addition, for the more successful countries, the nature of the
trade-relationship envisaged-reciprocal free trade -- is one
that cannot be available in the relationship with other African
countries. Thus a privileged relationship is established between
the EU and the successful African economies which isolates the
more successful economies from the less successful ones.
Finally
it encourages the African countries to form themselves into different
grouping other than the existing and more or less geographically
"natural" ones, in order to deal with the European
Union. Thus rather than deal together as ECOWAS or SADC, a number
of countries from the same groupings may emerge to relate themselves
to Europe. In the run up to the negotiations, there was already
support in EU documentation for the strengthening of UEMOA at
the expense of ECOWAS.
Apart
from the fragmentation of the inter-relationships among the African
economies, the new agreement between EU and the ACP undermines
the prospects of regional integration in another way. This relates
to provisions by which the parties will seek to regulate the
access to, and operations of economic agents -e.g. investors-
in each other's economies. Key among these rules are those relating
to intellectual property protection, competition policy, and
rights for the protection of foreign investors.
As
far as intellectual property is concerned the provisions of the
new agreement commits the parties to full compliance with the
rules of the TRIPs agreement of the World Trade Organisation.
This is
in stark contrast to the demands of most of the South. Ever since
that WTO agreement was signed, developing country governments
have been protesting against its unfair terms which entrench the
monopoly of transnational corporations over technology, undermine measures
to promote the transfer and adaptation of technology by developing
countries to suit their needs, and opens up the traditional knowledge
about medicine and other areas for piracy by European and other
Western corporations. In fact at the time of the negotiations
for the new partnership agreements, African countries have tabled
the most comprehensive proposals for the review of the TRIPs in
the WTO, with the support of most other developing countries.
With regard
to competition policy, the provisions appear as though concerned
with preventing market abuse. Yet as the language referring to
market access and business friendly environment suggest, Europeans
are pursuing here the same aim that they have been pursuing in
the context of the WTO without much success. That is to commit
ACP governments into giving the same, and in some senses better,
access to European companies than they would grant to national
companies especially in strategic areas such as privatisation of state enterprises.
In
the case of investment protection, the provisions envisage among
other things that the parties will adopt "general principles
on the protection and promotion of investments, which will endorse
the best results agreed in the competent international fora or
bilaterally."
This basically
refers to adopting standards for the promotion and protection
of foreign investment which are contained in the bilateral agreements
which Europe has been making efforts to adopt multilaterally,
both with the failed MAI, and in the WTO. Again these have been
opposed by ACP governments. These provisions in the new post-Lome
agreement seek to entrench in ACP countries, protections for European
investors. The effect of these provisions is that they will remove
the ability of the governments to use trade and investment policies
in support of strategies that will
remove the structural imbalances in their economies in order to
promote integrated development, both nationally and at the continental
level. This is the reason why African and other developing countries'
governments have opposed these provisions in other fora.
Food
security is a long standing concern of most ACP countries. The
new ACP-EU Partnership Agreement offers a large dose of rhetorical
principles without addressing the decades-old structural impediments
to food and security in the ACP countries.
The Partnership
Agreement articulates laudable objectives whose acclaimed objective
is to reduce and eventually eradicate poverty consistent with
the objectives of sustainable development and the gradual integration
of the ACP countries into the world
economy.
Espousing the laudable principles of partnership and ownership
of development strategies, participation, dialogue and the fulfillment
of mutual obligations the Agreement puts the responsibility for
development squarely on the ACP states.
Within
the new framework the principal strategy for promoting food security
is the provision of export refunds as contained in the Agreement's
Article 54 on Food Security. This is nothing more than a palliative
and suggests a non-commitment to addressing the realities of
food insecurity on the ground.
Under Lome
IV Convention STABEX and SYSMIN were principal instruments
for export revenue stabilization. Notwithstanding their limitations
they were important for ACP countries which are heavily dependent
on agricultural export earnings. These have however been dismantled
under the new Agreement and replaced with a system that
seeks to provide financial support to ACP countries
that experience dips in foreign exchange earnings.
The new
system is however less transparent and weak in its
criteria for operationalisation. Access to support would depend
on the extent to which export revenue dip bears a relationship
to decline in agricultural export earnings. Besides, compensation
for the shortfall merely covers the nominal decline in the export
earning without compensation for the consistent increases in the
cost of needed imports. It is significant that even before the
conclusion of the Agreement the European Parliament had
expressed its concern to revise STABEX and SYSMIN and give "greater
priority for food self-sufficiency as a key element in the selection
of projects".
On
the other hand, the post Lome Agreement provides a framework
for a wider range of investment support. This could lead to a
dearth of investments for food production given the unfavourable
macro-economic environment for food production, the relatively
lower returns and the risks associated with agriculture in general.
Discernible
hope for food security may lie in the Agreement's provision on
Gender. In seeking to
create a framework for enhanced assess of women to productive resources
like land and credit the Agreement seeks to improve food security
given the preponderance of women in food production
in the ACP countries. This however falls flat in the face of massive
infrastructural support for ACP agriculture that favours male-dominated
cash crop production for exports. Besides, adjustment support
for diversification have so far meant diversification into the
production and export of more cash crops and primary commodities,
thus leaving the ACP states as importers of manufacture and food
for domestic consumption.
ACP
states are mostly dependent on the production and export of primary
products, for the sustenance of their economies. The majority
of the populations, particularly women, lives and works in rural
areas with subsistence agricultural food production as their
main means of livelihood. The dependence on primary commodity
export for over fifty percent of the foreign exchange earnings
of the ACP states has historically been its bane given the wide
fluctuations in the revenue generation of these commodities.
Besides, there is the inherent and growing imbalance of the terms
of trade between the primary commodities of the ACP states and
the imported manufacture. Food imports have doubled in the last
three decades yet foreign exchange earnings have declined putting
in question that food security strategy that seeks to earn hard
currency through exports in order to meet domestic food needs
of the population.
There
can be no meaningful progress towards food security in the ACP
countries in a situation where their northern partners hold on
to a Common Agricultural Policy that employs expensive
and wasteful protectionist instruments and mechanisms that are
detrimental to agricultural and food production in the ACP countries.
It is in that sense significant that even before the conclusion
of the Agreement, the European Parliament had expressed
its wish to make the common agricultural Policy, consistent with
development policy.
The reiteration
of commitment to WTO obligations in the new agreement means a
commitment to an Agreement on Agriculture that weighs heavily
against food security in the ACP countries. The current AOA allows
developed countries to provide a multiplicity
of domestic support and export subsidy that depress food production
in the south. Meanwhile developing countries' domestic support
for small farmers has systematically been dismantled by the World
bank/IMF over the last two
decades. They are now in practice debarred from applying support
measures even in relation to food production. Again, it has been
pointed out that the inclusion of food products in the disciplines
of import control and domestic support effectively discourages
domestic food production while favouring imports. For countries
whose foreign exchange situation grows worse by the year this
restriction stands in sharp opposition to the quest for food security.
Another iniquity of the AOA cries out in the context of Article
13's due restraint provision as the subsidies covered by the relevant
Annex are largely prevalent in the EU, whereas those prevalent
in the developing countries do not enjoy a similar dispensation.
Indeed,
the recent acceptance in principle of the multi-functionality
of agriculture has given added credence to the need to protect
smallholdings and family household farming. Meanwhile, the EU
continues to promote the destruction of small farmers at home
and rural producers abroad through its massive export subsidies,
as forcefully articulated by the Geneva-based International
Union of Food...(IUF). Also, putting
in elements like rural landscape into the definition of multifunctionality
raises the real danger that in the hands of the EU, this principle
will become another vehicle for extending the wasteful protectionism
of the CAP.
The
restrictive environment of the WTO goes beyond the AOA. The ACP-EU
partnership Agreement commits the parties to adhere to international
agreements on Trade Related Intellectual Property Rights (TRIPS). This flies in the face of
hopes raised by the far-reaching demands of countries of the
South for the reform of TRIPS. TRIPS, as has been pointed out
again and again, threatens food security directly because it
effectively seeks to make rural producers of the ACP countries
dependent on Multinationals for seeds to grow food for their
own consumption.
It
is from this perspective that we should discern the full import
of the otherwise laudable assertion of the principle of partnership
that is mutually respecting of sovereignty. Placing full responsibility
on the ACP countries for their own development strategies is
nothing more than an attempt by the EU to disclaim responsibility
that squarely rests on the EU.
The new
Agreement also provides for dismantling the non-preferential trade
arrangements over a period of eight years and a movement towards
WTO compatibility. This unrealistic timeframe is far from being
in furtherance of food security, as it is impossible for the ACP
countries to adjust to play ball in the globalised
market.
The Economic Partnership Agreements (EPA) envisaged for regionally integrated economies
of the ACP at the end of that timeframe runs counter to food security
concerns. First, the ACP countries depending on primary agricultural
production derive minimum gains from regional integration that
is structured to meet the raw material needs of Europe. Nor does
the EU show any sign of readiness to reduce the expensive infrastructural
support that have sprang up in Europe through CAP.
The
recognition of the declining terms of trade, growing food insecurity
associated with ever worsening balance of payment difficulties
have informed the quest for food security. Some have followed
the line of relying on a strategy of increasing earnings to purchase
food at more competitive prices. This however does not take into
consideration the fact that most of the populations of the ACP
countries are usually agrarian and tend to produce largely for
their own subsistence. Nor does it recognise the fact that the
national economies are making do with ever more severe foreign
exchange constraints, and therefore cannot rely on a concept
of food security that is strategically linked to a reliance on
cheaper food imports.
As far back
as November 1997, the first Summit of ACP Heads of States and
Government Libreville, Gabon articulated clearly some of the key
challenges, noting in particular the need to "develop
food production so as to ensure food security for the populations".
Again, come the first ACP Civil Society Organization Forum
of November 1999, which took place in Douala, there was an unequivocal
declaration for food security as a priority issue in ACP-EU Development
cooperation. The Douala Declaration underscored the threat
of recurrent hunger and famine particularly among women,
children, ethnic minority and other marginalised groups. It consequently
called for policies that promote domestic food production in particular.
It also called for the promotion of coherent agricultural policies
within the framework of Post Lome and that of the WTO emphasizing
in particular food production which is the mainstay of marginalised
rural poor.
Dashed
hopes notwithstanding, there are those who entertain favourable
outcomes for food security given the available space for elaborating
compendium of texts that should accompany the Agreement and the
much-touted provisions for the participation of labour organisations,
civil society organizations and other non-state actors. Granted
the possibilities, the fact that the EU managed to bulldoze its
objectives throughout the negotiations is evidence of the inherent
imbalance in the so-called partnership and a pointer to the high
likelihood of EU railroading issues to its advantage. This ominous
likelihood should be seen in relation to a EU which is under
pressures from within to reform CAP and other policies. Indeed
the ACP General Secretariat has officially lamented the fact
that the agreement elaborates EU objectives whiles those of the
ACP do not merit a mention.
The
enhanced positions for the participation of civil society organisations
as partners in the implementation of the Post-Lome IV Agreement
offers some hope only to the extent that the civil society organisations
redefine their participatory role in favour of policy advocacy
and build credible alliances between ACP and EU CSOs. CSOs should
see their role in removing distortions and imbalances that are
structurally detrimental to the production especially of food
for domestic consumption in the ACP countries.
This
advocacy role should seek to secure commitment to removing protectionist
measures within the framework of CAP to the extent that those
measures depress domestic food production in the ACP states.
It should also seek real commitment to diversification away from
primary commodity production. It is the redefinition and reinforcement
of ACP CSO roles as partners that could help reduce the integrity
gap between the new agreement and the realities of structural
impediments to economic development in ACP countries.
Third
World Network-Africa (Red del Tercer Mundo-Africa) twnafrica@ghana.com
*Published
in Social
Watch
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