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EPAs symbolise Africa`s denial of policy choice - report
2008-09-22 10:08:27
By Beatrice Philemon
The Economic Partnership Agreements (EPAs) between the EU and several African countries is one of the dazzling cases symbolising Africa`s denial of trade choice, according to an international NGO, Debt, AIDS and Trade in Africa (DATA).
EPAs are a scheme to create a free trade area (FTA) between the European Union and the ACP countries.
They are a response to continuing criticism that the non-reciprocal and discriminating preferential trade agreements offered by the EU are incompatible with WTO rules.
The EPAs are a key element of the Cotonou Agreement, so far the latest agreement in the history of ACP-EU Development Cooperation.
DATA’s 2008 report argues that in order to develop and implement trade policies that enhance individual countries` poverty alleviation strategies in sub-Saharan Africa, ``there must be an appropriate level of flexibility for African countries in multilateral, regional, and bilateral agreements``.
This will ensure that they have access to the same flexibility that G8 countries benefited from as they pursued industrialisation and economic growth in the past, it says.
Furthermore, it says assistance in determining their priorities could be provided by in-country independent think tanks, funded by donors and the private sector, focusing on specific needs for countries or regions.
In that latest report, it says although policy space is difficult to measure, EPAs` negotiations in 2007 were an example of a negotiation that compromised the ability of African governments to sequence trade policy in line with overall economic development goals.
It also laments that African governments had a short period of time to decide whether or not to sign to EPAs and to analyse the potential implications of the deals on domestic economic development policies, regional integration and adjustment costs due to market opening, it indicates.
Due to the continuing WTO incompatibility of previous arrangements, the EPAs` key feature is their reciprocity and their non-discriminatory nature.
They involve the phased out removal of all trade preferences which have been established between the EU and the ACP countries since 1975 as well as the progressive removal of trade barriers between the partners.
In order to fulfill the criterion of being a non-discriminatory agreement, the EPAs are open to all developing countries, thereby effectively terminating the ACP group as the main development partner of the EU.
At one level, it shows that reduced tariffs and subsidies are crucial elements in increasing Africa`s share of global trade, but without aid for trade that addresses Africa`s supply side problems, African farmers and producers will not be able to build their capacity to export.
``Right now Aid for trade encompasses a broad set of needs, all intended to boost Africa`s ability to produce goods or export and these needs include financial and technical assistance for development of infrastructure and telecommunications systems, financial services, adjustment costs to compensate for losses incurred through the implementation of trade reforms and marketing``, it reads in part.
It also decries habit of so many developed countries in making pledges for aid, but end up not fulfilling their commitments.
For instance, in 2005 the Commission for Africa reported that Africa needed at least USD10 billion annually from donors in order to meet its infrastructure needs alone, although this was not entirely forthcoming.
In 2007, DATA expanded this analysis to show that when infrastructure needs are added to technical assistance for exporters and adjustment costs associated with implementing trade agreements, the total African aid for trade need to increase to approximately between USD12-13 billion per year, it notes.
Further analysis is also needed to help determine that African export sectors could best spur economic growth and to help individual countries to identify their export potential.
Funding for African countries has not been close to the levels needed or promised, though under EPAs, the EU has promised more aid to compensate for impending revenue loses.
DATA was founded in January 2002 in London by U2\'s Bono along with Bobby Shriver and activists from the Jubilee 2000 Drop the Debt campaign.
It was created for the purpose of obtaining equality and justice for Africa through debt relief, adjusting trade rules which burden Africa, eliminating the African AIDS epidemic, strengthening democracy, more accountability by the wealthiest nations and African leaders and transparency towards the people.
Start-up funds came from the Bill & Melinda Gates Foundation, financier George Soros, and technology entrepreneur Edward W. Scott.
DATA is currently placing most of its resources into supporting the ONE Campaign, a U.S.-based NGO which aims to increase US funding for and effectiveness of international aid programs.
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