The Link Between Internal Policy Successes & Trade Policy
In its broad headlines the new EC trade strategy appears as an unrestrained call for liberalisation. Trade Commissioner Peter Mandelson claims that the core message is a simple one: ‘rejection of protectionism at home, activism in opening markets abroad.’2 This latter dimension is seen as particularly important since as the Commissioner argues: ‘if our economic strength is built on trade, then our prosperity is directly linked to the openness of the markets we try to sell to.’3 Yet this unadulterated liberalisation agenda is not as clear cut as it at first appears. It needs to be seen in the context of 15 years of efforts to structurally transform major sectors of the European economy in order to equip them to engage more effectively with a rapidly expanding and changing global economy.
The completion of the EU internal market, and one might add the process of reform of the Common Agricultural Policy (CAP), is increasingly providing this effective platform for the EU to engage with the global economy, not in a head-to-head confrontation with emerging low-cost producers in the developing world, but in those particular components of the market which Europe is seen to be particularly well equipped to serve. The EC working document notes that:
European manufacturing industry has broadly maintained its share of GDP in volume in the face of globalisation [and that this] good performance is mainly due to the ability of EU companies to sell products at premium price due to quality, branding and related services. 4
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Poor protection of intellectual property right and patents;
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Closed markets for services and investment;
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Unfair state intervention which distorts prices and fair competition;
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Public procurement markets that remain closed to fair competition.'6
‘Walking on Two Legs’: A Long-standing Approach
With the WTO process stalled the EC is proposing to launch negotiations for freetrade agreements with a number of the faster growing economies of the developing world. According to Commissioner Mandelson, these new free-trade agreements will ‘go beyond what can be achieved at the global level’ and ‘will help pave the way for the next generation of global trade liberalisation, ensuring that new FTAs are a stepping stone for progressive liberalisation within the WTO system, not a stumbling block to it.’7 In this context the EC is looking for ‘ambitious bilateral agreements that drive forward global liberalisation.’8 The EC is not interested in ‘bilateral deals that avoid sensitive issues or open some borders only to close others.’9 The EC's argument is that carefully constructed and ambitious bilateral agreements can prepare the ground for future liberalisation at the multilateral level, particularly on ‘behind borders’ issues. It is in this context that the EC is arguing for free-trade areas which ‘require real depth, liberalising substantially all trade’.10
Thus, far from the new EU trade policy being a retreat from multilateralism following the collapse of the WTO talks as some commentators have argued, this approach is one which is designed to take issues forward in major areas of concern to the EU, before returning to the WTO to negotiate on these issues based on a greatly strengthened platform of ‘consensus’.
This is entirely consistent with the EU's practice since the mid-1990s, when it formally launched its free-trade area policy. This involved the adoption of a twintrack approach – multilateral and bilateral – to the promotion of a single, integrated trade-policy agenda. If that agenda gets blocked in one channel, the multilateral, then it is taken up in the other channel, the bilateral. The earliest example of this was on geographical designations of origin (GDOs) and geographical indications (GIs). The EU found itself blocked in the WTO on these issues, so it took them into bilateral negotiations. In the case of South Africa, the EU's pursuit of its wider agenda on GDOs and GIs meant that the wines-and-spirits component of an agreement was a major source of contention throughout the Trade, Development and Cooperation Agreement (TDCA) negotiations. Once the EU had secured support for its underlying approach to GDOs and GIs through various bilateral negotiations, it then sought to take these the issues back to the WTO, where they duly became part of the overall negotiations agenda.
Most recently this approach of building up support on these issues through bilateral trade negotiations was demonstrated in the EPA negotiations. Following the rejection of negotiations on a range of trade-related issues at both the Cancun (September, 2003) and Hong Kong (December, 2005) WTO Ministerial meetings, the EC began to aggressively advocate these issues in an EPA context, with, in the immediate months following both Ministerials, so called ‘Singapore issues’ (this refers to the issues covered by four working groups set up at the first WTO Ministerial meeting in Singapore in December 1996: investment protection, competition policy, transparency in government procurement and trade facilitation) becoming the focus of EU presentations in meeting after meeting on EPA negotiations, with the EC now arguing that these issues constitute the development dimension of the whole EPA negotiations.
It is this underlying approach of using bilateral negotiations to promote progress at the multilateral level, regardless of the negotiating partners interests in these issues, which is being reiterated in the EC's ‘new’ trade strategy proposals. The aim is ‘to go beyond what can be achieved at the global level by seeking deeper reductions in tariffs; by tackling non-tariff barriers to trade; and by covering issues which are not yet ready for multilateral discussion, such as rules on competition and investment.’ 11 In this way it is felt that the EU's new trade strategy ‘will help pave the way for the next generation of global trade liberalisation, ensuring that FTAs are a stepping stone for progressive liberalisation within the WTO system’.12 Of course the EU's agenda, as the process of internal reform has proceeded, has become more elaborate and more sophisticated than in the past. However, it is essentially the same single, integrated agenda pursued both multilaterally and bilaterally.
The Sequencing of Domestic Policy Change with Market Opening
The overall aim of the EU's trade strategy is to support the internal process of reform and the more effective engagement of the EU economy with the new challenges of globalisation. It is recognised that in the EU this requires: ‘the right policies … which create the conditions for strong European companies to grow and which equip Europeans individually to adapt to the changes driven by globalisation.’13 According to Commissioner Mandelson, this requires ‘a clear programme of measures to maximise the competitiveness of European companies when they trade’.14 It is implicit in the deployment of funds under the EU budget that this programme of measures should be in place before or in parallel with the processof EU market opening.
It is clear that for the EU, particularly in the agricultural sector, internal reform and restructuring comes first, and market liberalisation follows. This is why complete duty-free quota-free access for rice, bananas and sugar were deferred under the ‘Everything But Arms’ (EBA) initiative in favour of least developed countries. European Union rice-sector reform was only agreed in 2003 (having been deferred from 2000), sugar-sector reform was only agreed in 2005 (not 1994/95 as the EC had initially envisaged when launching the process of CAP reform in 1992), while proposals are only now on the table for the reform of the internal EU banana regime, involving the incorporation of financial support into the single farm payment scheme in the mainland EU banana-growing areas and incorporation into the POSEI (from the French, Programme specifique: programmes of EU measures to assist agricultural producers in the French overseas territories, the Azores, Madeira and the Canary Islands) programme in the remote banana-growing areas of the EU.
At the appropriate juncture (i.e. when internal reforms are approaching completion or are firmly in place), and only at the appropriate juncture, does the EC abandon systems of tariff-based protection domestically and seek to promote greater market openness in those markets where European companies feel themselves best placed to compete.
This issue – the sequencing of internal reform with the approach to trade liberalisation – was vividly illustrated in the September 2006 statement by Agriculture Commissioner Mariann Fischer Boel: on the approach to be adopted in EU-Mediterranean negotiations, she argued for an strategy to the liberalisation of food and agricultural product trade which accepted as its starting point ‘full liberalisation in principle, with a limited number of exceptions for sensitive products’.15 Such an approach by the EC would have been inconceivable 12 years ago. At that time, the South African government proposed precisely such an approach to the EU-South Africa free-trade area negotiations. The EU firmly resisted this approach since at that time the process of CAP reform was only just beginning and the EU had a long way to go in its internal reform process before it could contemplate such an open approach to trade liberalisation. The net effect of this EU position was that after five years of hard negotiations, South Africa was able to secure the elimination of duties on only 61% of its agricultural exports to the EU and reduced duties and duty-free access under limited quotas for a further 13% of the then currently traded agricultural products.
Only after 14 years of CAP reform, which has seen the EU shift assistance for its agricultural and food-products sector from support for agricultural prices to support for agricultural producers, has the EC become able to advocate such an approach. CAP reform has moved internal EU agricultural prices much closer to world market price levels and is in the process of shifting European agricultural and food product production into areas of activity serving the quality component not just of the EU market, but global markets for food and agricultural products. It is in this context the EU is able to pursue a much more open approach to agricultural trade liberalisation with north African countries. Such an approach would have been (and in fact was) inconceivable prior to the process of domestic agricultural reform within the EU (which is now entering its final stages), designed to equip the EU food and agricultural sector to meet the changing challenges of globalisation.
The Limits of the EU's Commitment to Free Trade
As the expansion of EU financing of agricultural programmes since 1992 illustrates (an almost 50% expansion in expenditures from ecus 30.35 billion in 1992 to €€ 44.76 billion in 2004), the EU approach to the creation of an environment for free trade is limited to the elimination of tariffs and those trade-related areas to which the EU gives priority. It certainly is not allowed to extend to the elimination of all forms of agricultural support which impact on production decisions and hence trade outcomes. This, it is held, would undermine the EU's sovereign right to set broader social and environmental policy priorities.
Instead, the EU pursues the pretence that its new forms of agricultural support are ‘non-trade distorting’, despite the fact that its own reports on the cereals regime reveal that in the absence of direct aid payments, most EU cereal farmers would ‘reduce their arable farming by at least 50%.’16 Such payments are thus having highly significant effects on production decisions and given the size of the EU market, it follows that a level of production about double what it would otherwise be will have a profound effect on global trade outcomes.
The EC's approach to free trade is thus partial, while its defence of this policy is fraudulent. Nevertheless the ongoing process of internal agricultural reform is allowing the EU to pursue a much more aggressive position on global agricultural trade liberalisation than would have been possible in 1992.
‘Do What We Say, Not What We Do’
In presenting the EC's new trade strategy, the EU Trade Commissioner Peter Mandelson has sought to emphasise the need for special treatment for ACP countries. Speaking at the London School of Economics (LSE) on 9 October 2006, Commissioner Mandelson explicitly stated that for ACP countries the time-frame for liberalisation would need to be longer and be ‘tailored to the needs of the countries themselves’.17 And again, addressing a meeting organised by the Party of European Socialists on 19 October 2006, he reiterated the EC's commitment to helping ‘build regional markets, build up productive capacity and diversify ACP economies’,18 before opening up.
However, implicit in Commissioner Mandelson's remarks has been the proviso that longer time-frames are possible to deal with particular sensitivities, provided that the end objective of liberalisation was accepted. This sends ambiguous signals to EU trade negotiators in their EPA dealings with African governments: flexibility yes, but not too much; longer time-frames yes, but only in exceptional circumstances for particularly sensitive areas and only if you commit to an ‘ambitious’ long-term objective of full liberalisation across a wide range of areas. Given the approach of the EC's EPA negotiators, one could easily be misled into believing that the Commission is so wrapped up in its own vision of Europe's role in a changing world that it is failing to recognise the basic reality: that the economic starting point for African countries in EPA negotiations is very different from the starting point of the EU.
African countries and regions are at very different stages of the process of internal reform and hence the nature of the trade policy appropriate to their needs at this point is quite different from that of the EU. After all, it took the EU 35 years to move from the Treaty of Rome to the creation of a single internal EU market and a further 15 years to implement what is still the unfinished business of CAP reform – a process designed explicitly to equip the European food and agricultural sector to meet the challenges of a liberalising global economy. This process of CAP reform will certainly extend beyond 2013 (the 21st year of implementation), when the next round of reform is scheduled and may not in fact be completed before 2020, a total period for structural adjustment of the EU food and agricultural sector to prepare it for full liberalisation of some 28 years. In comparison, African regional market creation, policy harmonisation and the establishment of effective policy tools are all in their infancy.
The lessons from the lengthy time-frame the EU has required for its internal adjustment to prepare for market opening (not to mention the vast financial outlays required in support of this process, with the agricultural budget increasing from 30.3 billion ecu in 1992 to €€ 44.46 billion in 2003 – the last year before 10 new member states joined – increasing to €€ 54.7 billion in 2006), are simply not being taken on board in determining an appropriate content and time-frame for trade liberalisation for African countries under the proposed EPAs. It is this which lies at the heart of the current disputes over the nature and content of the proposed EPAs between groupings of African countries and the EU.
In most African regions the process of regional-market creation and consolidation (the creation of an internal African market) is still at a very early stage, with the conditions not yet having been created for the stimulation of investment in serving these emerging enlarged regional markets on the basis of the mobilisation of each region's own human and physical resources (with the notable exception of the SACU market). The question arises: if the objective of African trade negotiators in the EPA negotiations is in fact (as stated in the ACP mandate) to contribute to the structural economic transformation of African economies through the promotion of greater local value-addition to goods and services for national, regional and international markets, to what extent does the EU's wider trade policy and its concrete manifestation in the EPA negotiations support the attainment of this objective? This is a critical question and one which is taken up in the next issueof ROAPE (June 2007).
The EC Trade Strategy & EPAs
Likely Outcomes
The central unresolved issue relates to the structure and content of the proposed EPAs. What one could summarise as ‘EPA light’ – being the absolute minimum in trade in goods required to ensure WTO acceptance – versus what Trade Commissioner Peter Mandelson refers to as ‘ambitious bilateral agreements’, with some added development finances.19 Clearly the EC's ‘new’ trade strategy favours ‘ambitious bilateral agreements’ which include a range of binding commitments in trade related areas and as much tariff liberalisation within a 10 to 12 year period as African countries are willing to agree to.
What this will mean in practice will depend on the one hand, on how ruthless EC negotiators prove to be and what leverage they are willing to exert on ACP governments to get them to sign on to ambitious EPAs; and, on the other hand, how strong and united ACP negotiators and their principals prove to be in resisting EC pressure and mobilising EU member-state governments to get the EC to back down on its agenda of ‘ambitious bilateral agreements’ in the context of trade negotiations with Africa.
The EC has two major points of leverage over ACP countries to get them to sign up to ‘ambitious’ EPAs: 1) the lapsing of the existing non-reciprocal trade preferences on 1 January 2008 and 2), the engineered convergence of the final stages of the EPA negotiations with the programming of 10th EDF aid resources.
The longer the negotiations drag on without any major resolution of the outstanding issues in favour of African positions and demands, the more pressure will mount on governments in key African countries (in particular Kenya, Mauritius, Ghana and Nigeria) to sign on to the EC version of EPAs. In some non-LDCs there is a high dependence on the Cotonou Agreement's tariff preferences. That is to say their exports to the EU are disproportionately concentrated21 in products where ACP trade preferences provide significant margins and where their withdrawal would have serious commercial implications. For Mauritius, this applies to 72.4% of exports to the EU, while for Kenya the figure is 59.0% and for Swaziland it is 91.7%.
This means that as the 1 January 2008 deadline approaches, pressure will increase on trade ministers to conclude EPA agreements so as to maintain existing commercial relationships. The EC is aware of this reality and is quietly encouraging private-sector operators in these and other countries to take a more active interest in the progress of the negotiations.
Already in one southern African country private-sector bodies have written to the minister of agriculture calling on him to urge his ministerial colleague responsible for trade to conclude the EPA negotiations soon so as to avoid any disruption of existing trade flows from 1 January 2008. These pressures on African trade ministers will certainly increase in the coming months. All the EC needs to do is keep them at the negotiating table and wait them out – letting pressure on them build up until they have no option but to sign a Commission-approved EPA, with a few face saving sweeteners (e.g. expanded EPA related adjustment support) thrown on the table.
| EPA Light | Ambitious Bilateral Agreements | |
|---|---|---|
| Product Coverage |
Overall
80% of all trade 100% tariff elimination by the EU 60% tariff elimination by the Africa Sensitive agriculture products Conditional tariff offer for CAP-affected products, linked to elimination of all EU export subsidies and measures providing implicit export subsidies Revenue sensitive products Conditional tariff offer for revenue sensitive products, implementation of which is linked to the successful implementation of revenue diversification measures. Sequencing with regional integration Proper sequencing of regional market integration and consolidation with market opening. |
Overall
90% of all trade 100% tariff elimination by the EU 80% tariff elimination by Africa Agriculture Based on principle of full liberalisation with the exception of very sensitive products. |
| Time–frame for Tariff Elimination | 10–year moratorium (2008–2018); 20–year phase-in of tariff elimination; on 60% of all trade (2018–2038). | 10–12 years Exceptional circumstance for highly sensitive products up to 25 years. |
| Safeguards | Pre–emptive safeguard clause to avert threat of market disruption, with monitoring and surveillance mechanism for trade in sensitive food and agricultural products. | Standard agricultural safeguard clause. |
| Development Finance | Firm commitments on aid for trade support; Establishment of EPA Adjustment Facility, with specific thematic windows (including for revenue diversification); Clear elaboration of modalities for speedy and effective deployment EPA adjustment support managed by national and regional structures; Revision of terms & conditions of EIB funding. | ‘Horizontal instruments’ in certain EPA related areas using EDF funding; Mobilisation of part of member states ‘Aid for trade’ commitments and, EC aid for trade commitments from EDF. |
| Trade in Services | Cooperation provisions for development of service sector and building
regional and national policy frame–works; No binding commitments on service liberalisation, unless specifically requested by regional grouping. | Binding and ambitious commitments on service–sector liberalisation; Support for policy development and institutional capacity building. |
| Trade–related Areas | No compulsion on ‘Singapore issues’; Support for development of national and regional policy framework and institutional capacity building. | Binding and ambitious commitments in trade related areas; Support for development of national and regional policy framework and institutional capacity building. |
There are two ways for African Trade Ministers to avoid this situation. The first involves taking a political initiative directed at EU member states governments, which acknowledges that EPA negotiations are unlikely to be concluded by the 1 January 2008 deadline given the range of issues still outstanding and pressing EU member states to commit themselves to ‘transitional arrangements’ to extend existing Cotonou Trade Preferences until such time as the EPA negotiations have been concluded. The EC is likely to strongly resist this, and sustained pressure on EU member states will be essential if such a step is to be taken.
The second option open to African Trade Ministers is an early and well-orchestrated high profile ‘walk out’, effectively collapsing the negotiations. However, this needs to be done early enough to allow a re-launching of the negotiations on the basis of a new set of EC negotiating instructions from EU member states, so that the negotiations, on a revised basis, can be concluded before 1 January 2008.
Of course these two options could be combined, with political lobbying for the extension of non-reciprocal preferences on a ‘transitional’ basis being combined with a ‘walk out’ on key points of principle. The question arises however as to whether African Trade Ministers are united enough regionally and strong enough domestically to pursue the ‘walk out’ option. An option which would only work if African governments were absolutely clear on what kind of EPA they would be willing to sign.
The critical factor would appear to be the domestic political strength of African Trade Ministers and whether they can carry senior Ministers and Headsof Government with them in holding out for EPA agreements which support the process of structural economic transformation in ACP countries on the basis of current national and regional realities. This is far from certain, particularly when combined with the EC's second major point of leverage – the engineered convergence of the programming of 10th EDF resources alongside the final stages of the EPA negotiations.
All previous European Development Funds (EDF, the financial instrument for the implementation of each five-year cycle of ACP-EU cooperation activities) have run for five years from the date of signing of the agreement. Not so for the Cotonou Agreement. Under this, the five-year financial cycle began with the ratification and entry into force of the agreement, shifting its time cycle from 2000-2005 to 2002-2007. This means that the programming of the 10th EDF, entailing a financial allocationof €€ 22.0 billion in grants and €€ 2 billion in loan financing, will take place in parallel with the final stages of the EPA negotiations. This engineered convergence of the process of programming of the 10th EDF with the final stages of the EPA negotiations process, means that the politically more powerful ACP finance ministers will be involved in a process of discussions over future financial allocations from the EC, at the same time as trade ministers are facing critical decisions in the EPA negotiations. Given the discretionary powers that the EC enjoys over aid allocations, this provides it with enormous scope for ‘financial leverage’ over the EPA negotiations.
Indeed, the programming of the 10th EDF could well come to constitute the single largest ‘institutional bribe’ in history, with ACP finance ministers being ‘encouraged’ to ‘put the arm’ on reluctant trade ministers who remain unconvinced of the economic value of the type of EPAs which the EC is proposing. While the EC is all offended innocence and indignant outrage when the suggestion that this could occur is put forward, it should be borne in mind that it has a track record of using EDF aid deployment to try to force through political acceptance of new trade arrangements. One case in point is the little remarked €€ 6 million ‘Economic integration support programme for Botswana, Lesotho, Namibia and Swaziland (the BLNS countries). This programme, established in February 2001, was explicitly designed to address the consequences for the BLNS of the implementation of the EUSouth Africa TDCA. The three-phased programme was comprehensive in its scope, and through its successive phases aimed to get to grips in a systematic way with the regional implications of the implementation of the EU-South Africa TDCA.
Unfortunately the programme never became operationalised. The EC attached a rider to the financing proposal stipulating that for it to become operational, BLNS governments must ‘concur’ under the SACU agreement with the provisions of the EU-South Africa TDCA. This required them to fully accept the application of the EUSouth Africa TDCA to the whole territory of SACU, without any consultations on the consequences of this bilateral EU-South Africa agreement for the trade rights and privileges which BLNS countries had acquired since 1975 as members of the ACP group.
For the BLNS governments, particularly Namibia, this represented a major policy issue. As early as April 2001, Namibian concerns were raised at a Parliamentary workshop on the implications of the EU-South Africa TDCA for the BLNS countries. At this workshop, ‘deep concern’ was expressed over ‘the linkage of funds under the economic integration support programme for the BLNS to formal BLNS concurrence with the EU-South Africa TDCA under Article XIX of the SACU agreement’.22 Such a linkage was firmly rejected, with parliamentarians insisting that outstanding issues in EU-Namibia bilateral relations first be addressed before ‘concurrence’ was given. Since these issues were never addressed, Namibia never concurred under article XIX of the SACU agreement.
Thus, for nearly four years this programme remained moribund and on 14 January 2005 was converted into an institutional support programme for the SACU Secretariat. The initial concept of a multi-phased programme to comprehensively address the regional consequences of the implementation of the EU-South Africa TDCA and support fiscal and economic adjustment was quietly abandoned – in view of the unwillingness of Namibia to ‘concur’ under the SACU Agreement.
The fate of this project highlights the willingness of the EC to use financial leverage to secure required policy outcomes. This suggests that the EC holds all the aces in the poker game of EPA negotiations, or more specifically nearly 24 billion of them!
The only means of outwitting such manoeuvres is for there to be close cooperation between African trade ministers, finance ministers and heads of government to ensure that such unscrupulous tactics cannot be used and for there to be close public scrutiny of the 10th EDF programming process in the coming months to ensure that no such financial leverage is exerted. Some would argue that this is a highly unlikely outcome and that as a consequence, Africa-EU EPAs will end up closely resembling the EC's ambitious bilateral agreements, with a few development assistance sweeteners thrown in. This leads on to the question: what would it mean if the EC got its way and secured ‘ambitious bilateral agreements’ under EPAs?
Likely Implications
There is concern about the ‘ambitious bilateral agreements’ in five main areas:
1) The Undermining of Government Revenues
There are major concerns in African countries over the impact of EPAs on government revenues. Studies from West Africa suggest that in some countries the revenue losses could be up to 20% of government revenue. Annual losses to government revenue in Africa as a result of the implementation of EPAs could total $1,972 million – almost double the total annual payments under the combined national indicative programmes of African ACP countries. Even these estimates could be an under-estimate of the likely revenue effects when trade-diversion effects are taken into account.
2) The Possibility of Accelerated De-industrialisation
Currently concerns over the deindustrialisation effects of EPAs are most acute in West Africa. The October 2003 working draft of the EC financed EPA impact assessment study for West Africa warned of ‘potential economic consequences of market access liberalisation’ including
the collapse of much of the manufacturing sector, which at the moment constitutes the backbone of the modern economy in the region and is the main employer in urban centers… increased weakness of the financial sector, of insurance companies and services linked to these manufactures. An increase in the informal sector to provide employment, food and services to urban population with the consequence of non-performing micro enterprises working more on the survival mode than on the development mode. 23
3) The Inhibiting of the Development of Increased Value-added Processing
It is in West Africa also that the first signs of the disarticulation of agro-processing from national agricultural activities have emerged. One example follows the expansion of EU tomato-paste exports to Senegal, which has served to sever the links between food processors who use tomato paste as an input from domestic and regional tomato production. For a range of Dakar-based food processing companies it is now easier and cheaper to purchase such inputs from Europe than it is to buy them from national or regional suppliers. This has led to the closure of tomatoprocessing plants in the region and increased price volatility on fresh tomato markets, since there is no longer an outlet for surplus production at harvest time.
4) The Economic ‘Re-colonisation’ of Africa
The concerns that the economic ‘re-colonisation’ of Africa which is underway under the twin effects of CAP reform and the EU's free-trade area policy can be illustrated by the spate of take-overs which took place in the dairy sector in South Africa in the middle of the 1990s, in the expectation of the impending conclusion of the TDCA. Within an 18-month period, two-thirds of South Africa's dairy-processing sector had been taken over or passed into partnership with European dairy companies, with the major European players Danone and Parmalat actively competing with each other to buy up most of the sector.
5) The Promotion of the Privatisation of Services & Public Utilities
In April 2006, African governments underscored ‘the absolute need for a carefully managed sequencing of services liberalisation in line with establishment of strong regulatory frameworks’, holding that they ‘shall not make services commitments in the EPAs that go beyond our WTO commitments’ and urging the EU ‘not to push our countries to do so’. On issues of investment protection, they firmly reaffirmed the position that ‘these issues be kept outside of the ambit of EPAs’.
There are major concerns that the kind of binding commitments which the EC is seeking on market-opening in services and a range of agreements in trade-related areas (including on investment protection) could seriously compromise the development of locally owned services and local investment, with the benefits of growth in these areas in the long term accruing outside of Africa.
Paul Goodison , European Research Office, Brussels.