Hand go, Hand come

Just read yet another newspaper article protesting the current Economic Partnership Agreements (EPA) being negotiated with African countries by the EU. This agreement is to replace the previous non-reciprocal African Caribbean Partnership (ACP) trade agreements. Under this new EPA, all parties are to drop whatever trade barriers existed between them and grant unrestricted market access. The EU has been pushing this agenda for the past ten years even though so far only 10 of 47 Sub-Saharan African countries have signed on to this agreement. The EU argues that “the EPAs are set out to help ACP countries integrate into the world economy and share in the opportunities offered by globalisation”. In addition, they “ are designed to be drivers of change that will kick-start reform and help strengthen rule of law in the economic field thereby attracting foreign direct investment (FDI) and helping to create a "virtuous circle" of growth”.

Let’s cut to the chase…

This, in my opinion, is another attempt to crowd out the development space available to developing countries. Most developing countries under this partnership are barely industrialised and most of them are highly dependent on agriculture. An unrestricted market access for EU products (with the infamous EU – CAP still in place) is only going to shoot up the export bill of many of these countries and worsen already bad balance of payments. What then happens to the over 20 million subsistence farmers and small land owners in these countries? On the other hand, there is no doubt that these African countries gain reciprocal access to the EU market. But in the presence of (with emphasis) the CAP and other quiet interesting Non-Tariff Barriers in the EU market, its a no-brainer - admittedly a bold assumption - who would be the net beneficiary.

Most developing countries are already facing the eminent danger of the influx of cheap Chinese product stifling local initiatives to move up the value chain of production. Imagine adding to that a no holds-bar access for about 20 industrialised and semi-industrialised nations? Based on pure speculation, could this be an attempt to recapture the market share of developing countries from Asia (in particular China)? Another angle to the power struggle between the West and the East over the South?

Interestingly, this proposed partnership seems to concur with the ‘Kicking away the ladder’ gospel, where those already at the top try to defend their status and to wipe away the strategies they themselves used in getting to the top.

But who is to be blamed?

In this rat race of a global economy, every nation must look after their own and to do whatever they can to keep growing. Everyone wants the biggest bite off the cake. If tables were turned with EU as a developing continent and Africa as a developed continent, would we not have pushed a similar agenda? Now that’s something to think about :)