7/30/2019 Reader_lo

1/82

EUpolicytools for development?

trade

a reader exploring the issues

7/30/2019 Reader_lo

2/82

Creditstext and design

Dave Richards

thanks toACORD International, Caribbean Policy Development Center, Friends of the Earth, Kenya Human

Rights Commission, Oxfam France - Agir ici, Oxfam International, Trade Justice Movement, Traidcraft,

Windward Islands Farmers Association, War on Want, World Development Movement

This publication has been produced with the financial assistance of the European Union.Its contents are the sole responsibility of RISC and can under no circumstances be regardedas reflecting the position of the European Union.

RISC, 2009

Users may copy pages from this pack for educational use, but no part may be reproduced for commercialuse without prior permission from RISC.

Different perspectives on EU trade policy, clockwise from top left:The Trade Dictator, YouTube clip from World Development Movement8www.youtube.com/watch?v=FGsNf8chgnc; Making trade work fordevelopment Aid for Trade: a selection of case studies from around theworld, European Communities, 2008; On ne signe pas! Non aux APE!,YouTube clip from Senegalese rapper Didier Awadi8www.youtube.com/watch?v=HtDlqErTUHg

7/30/2019 Reader_lo

3/821

ContentsIntroduction & Background to EPAs 2

Appendix 1: Trade timeline 18

Appendix 2: Six reasons to oppose EPAs in their current form 23

Response from 20 leading ACP and EU civil society organisations to some of the key arguments put forwardin support of Economic Partnership Agreements (EPAs) by the EU. November 2004Appendix 3: Advocacy paper on the CARIFORUM-EU EPA negotiations 30

Evaluation by Windward Islands Farmers Association (WINFA) of the negotiations and the likelyimplications of the EPA for Caribbean agriculture in general and Windward Islands farmers in particular.November 2006

Appendix 4: KHRC: Constitutional Challenge to the EPAs 33

Kenya Human Rights Commission (KHRC), the Kenya Small Scale Farmers Forum (KESSF) and otherpetitioners instituted proceedings against the Government of Kenya to prevent it from signing the EPA onthe grounds that it would infringe human rights. 2007Appendix 5: EPAs: What Every Parliamentarian Needs to Know 36

Policy briefing paper from a coalition of African NGOs, highlighting implications of signing an EPA. 2007Appendix 6: Nigeria and the EU: Trade for Development An Introduction to the EPA 39Major document from European Commission explaining the background to EPAs and the likely benefits forNigerias development. 2007Appendix 7: Six common misconceptions about EPAs 40

Response from European Commission to critique of EPA negotiaions.January 2008Appendix 8: Dear anti-poverty campaigner 42

Response to criticism of EPAs from EU Trade Commissioner, Peter Mandelson, and EU DevelopmentCommissioner, Louis Michel. Posted on EU website. September 2007Appendix 9: The potential effects of EPAs: what quantitative models say 44

Review by Overseas Development Institute (ODI) of several modelling studies undertaken to assess the

likely economic effects of EPAs. 2006Appendix 10: Partnership or powerplay? 45Policy paper from Oxfam International on how Europe should bring development into its trade deals withACP countries. Evaluates the likely development benefits of the initialled EPAs. 2007Appendix 11: Undercutting Africa: EPAs, forests and the EUs quest for Africas raw materials 47

Report from Friends of the Earth which argues that EU trade policy is primarily aimed at securing rawmaterials and new markets in a competitive globalised world economy. 2008Appendix 12: Global Europe: competing in the world 50

Key document from the European Commission which outlines the EUs strategy to secure economic growthand jobs. October 2006Appendix 13: Block the EPA 52

Declaration of several Haitian organisations which criticises the EU and Haitian government. October 2007Appendix 14: Global Europe 54Paper from War on Want which argues that Global Europe: competing in the world is an attack ondeveloping countries and the European social model.April 2008Appendix 15: The EU-India FTA: initial observations from a development perspective 56

Traidcraft report which analyses the development implications of the Global Europe agenda for India. 2008Appendix 16: Dialogue of the deaf 60

An assessment by ICCO of Europes developmental approach to trade negotiations. September 2008Appendix 17: Dear Baroness Ashton 62

Letter to new Trade Commissioner from development ministers of three EU governments. November 2008Appendix 18: European Parliament resolution 64

Two resolutions on the development impact of EPAs. One, tabled by the conservative grouping waspassed. An alternative, proposed by Socialists and Greens was not adopted. 5 February 2009Appendix 19: FTAs & the financial crisis 67

Gallery 69

Further information 78

7/30/2019 Reader_lo

4/822

ECOWAS

CEMAC

ESA

SADC-minus

IntroductionSince 2002 the European Union (EU) has been negotiating new trade deals called Economic PartnershipAgreements (EPAs) with 76 countries in Africa, the Caribbean and the Pacific (ACP). The EPAs are perhapsthe most important trade talks faced by these countries which represent 750 million of the worlds poorest

people. The EU is not only their largest export market, but also their biggest aid donor.Although the European Trade Commission has promised that EPAs will be tools for development, there hasbeen a concerted campaign against them by some ACP governments and many civil society organisations inACP and EU countries.

This reader tries to make the complex world of trade agreements more comprehensible and asks thequestion: how far can the opening up of trade meet the needs of the worlds poorest people? Thebackground section summarises the arguments which have been put for and against EPAs using extractsfrom key documents. The appendices include longer extracts from these documents to give a better idea ofthe complexities involved as the long process of negotiation has unfolded and the campaign against EPAshas been countered by its proponents.

The players

7/30/2019 Reader_lo

5/823

Southern African Development Community (SADC-minus) 7

Angola*, Botswana, Lesotho*, Mozambique*, Namibia, Swaziland, Tanzania* (excludes South Africawhich already has a WTO compatible Free Trade Area agreement with the EU)

Central Africa (CEMAC) 7

Cameroon, Central African Republic*, Chad*, Congo Republic, Equatorial Guinea*, Gabon, Sao Tome andPrincipe*

West Africa (ECOWAS) 16

Benin*, Burkina Faso*, Cape Verde, The Gambia*, Ghana, Guinea*, Guinea-Bissau*, Cte dIvoire,Liberia*, Mali*, Mauritania*, Niger*, Nigeria, Senegal*, Sierra Leone*, Togo*

Eastern and Southern Africa (ESA) 16

Burundi*, Comoros*, Democratic Republic of Congo*, Djibouti*, Eritrea*, Ethiopia*, Kenya*, Malawi*,Mauritius, Madagascar*, Rwanda*, Seychelles, Sudan*, Uganda*, Zambia*, Zimbabwe

Caribbean (CARIFORUM) 15

Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominica, Dominican Republic, Grenada, Guyana,

Haiti*, Jamaica, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, Surinam, Trinidad and TobagoPacific (PAPC) 14

Cook Islands, Federated States of Micronesia, Fiji, Kiribati*, Republic of the Marshall Islands, Nauru, Niue,Palau, Papua New Guinea, Samoa*, Solomon Islands*, Tonga, Tuvalu*, Vanuatu*

* Least Developed Country (LDC) represent the poorest and weakest segment of the internationalcommunity. Extreme poverty, the structural weaknesses of their economies and the lack of capacitiesrelated to growth, often compounded by structural handicaps, hamper efforts of these countries to improvethe quality of life of their people. These countries are also characterized by their acute susceptibility toexternal economic shocks, natural and man-made disasters and communicable diseases.

Landlocked Developing Countries and Small Island Developing States The United Nations Office of the

High Representative for Least Developed Countries8www.unohrlls.org

Africa, Caribbean and Pacific (ACP) side

Regional secretariatsNegotiate with the European Commission on behalf of the ACP member states.

ACP member statesGive a set of negotiating directives (negotiating mandate) to their respective regional secretariat.

European Union side

European Commission (EC)

The EC is the executive arm of the EU. It is responsible for developing policy, proposing legislation,implementing decisions, and the general day-to-day running of the European Union. The EC is dividedup into directorate generals (DGs), a bit like government departments, each of which is headed upby a Commissioner, who are the EU equivalents of Secretaries of State. Each member state appointsa Commissioner and the President of the European Commission decides which DG to assign to eachCommissioner. The Directorate-General for Trade negotiates on behalf of the European Union with a set ofnegotiating directives (a negotiating mandate) agreed by the EU member states.

EU member statesGive a set of negotiating directives (a negotiating mandate) to the European Commission.

European ParliamentMEPs may have a yes/no vote on the final trade and development agreement.

ACP-EU

Joint Parliamentary AssemblyMEPs and a range of ACP representatives, including MPs and government officials, meet on a regular basisfor discussion.

7/30/2019 Reader_lo

6/824

Background to EPAsGlobalization has made the world economy more efficient and has created hundreds ofmillions of jobs, mainly, but not only, in developing countries. It generates an upward spiral ofjobs and prosperity for countries that embrace the process, although the advantages will not

reach everybody at the same time.Brief on Globalization International Chamber of Commerce, 2000

Until the lions have their historians, declares an African proverb, tales of huntingwill always glorify the hunter. The same is true of tales about international trade. Forglobalization enthusiasts the rapid expansion of world trade over the past two decades hasbeen an unmitigated blessing, notably for the worlds poor. Reality is more prosaic. Greatertrade does offer enormous opportunities for human development. Under the right conditionsit has potential for reducing poverty, narrowing inequality and overcoming economic injustice.For many of the worlds poorest countries, and for millions of poor people, these conditionshave yet to be created.

Human Development Report 2005 United Nations Development Programme

For the last 30 years the EU and ACP countries, mainly former colonies, have had a series of five-yearagreements that set the framework for their political and economic relationship. Under these agreementsthe EU has been giving ACP countries preferential access to its markets on the goods they export. Butthis preferential treatment has been declared incompatible with the rules of the World Trade Organisation(WTO). The EU and ACP were granted a waiver in 2001 which expired at the end of 2007. EconomicPartnership Agreements (EPAs) are the new, WTO-compatible trade deals to replace the old arrangements.

EPAs are extremely important because they will lay the rules of trade between ACP countries and Europefor decades to come and affect the lives of millions of people. They are also highly controversial, with highlypolarised views on whether they will provide the wealth for developing countries to meet their development

needs, particularly the Millenium Devlopment Goals (MDGs) which are the current focus for internationaldevelopment policies.

One one side are the supporters of the EUs Directorate-General for Trade (DG Trade), closely identifiedwith Peter Mandelson, the Trade Comissioner until October 2008. On the other is a broad movement oforganisations ranging from anti-capitalist/globalisation movements from around the world, through todevelopment Non-Governmental Organisation (NGOs) and parliamentarians from both ACP and EU. Thismirrors the familiar positions seen in arguments about the pros and cons of trade liberalisation, especiallythe policies promoted by the World Trade Organisation (WTO) and its supporters.

The EU and African Caribbean and Pacific (ACP) countries agreed to negotiate EPAs becausethe system of trade preferences that was in place before EPAs, the Cotonou trade regime,was failing to help ACP economies diversify and develop their trade. In fact their share of EUand world trade was shrinking. In addition, the Cotonou trade regime did not comply withEU and ACP commitments at the WTO that trade agreements must not discriminate betweengroups of countries unless they fully open trade between the countries concerned. Under theCotonou trade regime the EU granted better trade preferences to the ACP than to similardeveloping countries but without any corresponding ACP opening.

The EU and ACP therefore sought a special waiver from WTO rules with other WTO membersin 2001 to allow EPA negotiations to continue until the 31st of December 2007 when theCotonou trade regime would legally expire. The EPAs were intended not only to be compatiblewith WTO rules but to promote development by covering issues like services, investment andstandards and to increase cooperation on trade issues.

An Overview of the Interim Agreements DG Trade, January 2009

This belief in the benefits of a more liberalised trading system for developing countries, that countries cantrade their way out of poverty, is a key element in all European Commission documents explaining its tradepolicies (see Appendix 6, p39).

7/30/2019 Reader_lo

7/825

The European Union is a leading actor in world trade. We believe that free and fair trade notonly creates jobs and growth in the EU but it also helps the poorest countries in the world todevelop. We want to promote prosperity and social justice through fair and open trade whichis based on rules that are respected by everyone.

Trade policy is central to the EUs relations with the rest of the world. As a global tradingpower and the worlds largest market, our trade policy is an important instrument for shapingthe economic world we live in. It also means the EU has responsibilities, and in particular, we

believe the benefits of trade should be extended to all, especially the poorest.

We believe that a policy of progressively opening up trade at the multilateral level, supportedby the development of stronger international trade rules, is the best way forward. It will enableus to contribute significantly to promoting sustainable development. And it also means wecan ensure coherence between international trade and development policies, thus helpingdeveloping countries to integrate into the global economy.

Trade policy: the EUs relations with the rest of the world DG Trade, 2006

Globalisation brings real economic challenges for the West African sub-region. Globaleconomic change can be a positive force for development in West Africa, providing newmarkets for exports and new possibilities for trade and investment. But it also bringschallenges, not least the pressures of integrating into the global economy. In order to helpthe states of West Africa harness and benefit from global economic change, the EU and WestAfrica need to build a new economic partnership which strengthens the region economicallyand helps equip West African countries for a changing economic world. Our work starts withan effective reduction of poverty. Without greater economic opportunities, few West Africancountries will have the revenues they need in the long term to deliver basic services or evenmaintain the economic and social fabric of their societies. Boosting economic opportunitieswill also be a key factor in achieving the Millennium Development Goals.

Building on a long history of excellent co-operation the groundwork for this new EU-West

Africa partnership has already been laid. The Cotonou Agreement is unique in linkingdevelopment assistance and trade relations and ensuring that they reinforce each other.The Economic Partnership Agreements we are currently negotiating to replace the originaltrade chapters of the Cotonou Agreement will reflect the same balance. The challenge for theEconomic Partnership Agreements is to add a third dimension: fostering regional integrationand helping to create the conditions for attracting vital investment. That is the vision for eachof the Economic Partnership Agreements the EU is negotiating with the six ACP regions.

Peter Mandelson in Nigeria and the European Union: Trade for Development DG Trade, 2007

Negotiations

Negotiations began in September 2002 and as the talks advanced, it became apparent that ACPgovernments faced a dilemma. EPAs secured market access for traditional exports which formed thecornerstone of their economies, but the reciprocal nature of the agreement meant that they alsorepresented a threat. The experience of trade liberalisation under WTO rules provided ample evidence thatthe benefits of more open markets were not spread evenly there were losers as well as winners.

EPAs would also give powerful corporations based in the EU greater access to ACP markets. This couldundermine poor countries fledgling industries and local laws protecting workers and the environment.Government revenue would also fall becuase of reduced taxes on goods and services imported from the EU.This would compromise investment in health and education and threaten the achievement of the MDGs.Despite the obscure and highly technical nature of the negotiations, awareness of the implication of EPAsgrew. A vigourous international campaign to stop the signing of the EPAs emerged which brought togethertrades unions, farmers organisations, civil society and business groups in the ACP countries. In September2004 a group of 20 leading ACP and European civil society organisations published Six reasons to opposeEPAs in their current form, a critique of EPAs as promoted by the EU, and a declaration of intent (seeAppendix 2, p23).

7/30/2019 Reader_lo

8/826

If EPAs continue to develop along their current course, they pose a severe threat to thedevelopment of ACP countries and the people living in these countries. They contravene thecommitment of the EU to promote sustainable development and poverty reduction. That iswhy we are opposed to EPAs in their current form.

Civil society will continue to work with parliamentarians, governments, and the EuropeanCommission to contribute to an outcome of these negotiations that will create a fairer tradingrelationship and bring about genuine benefits and economic opportunities for poor people.

To this end, the undersigned organisations ask the EU to take the following steps:

Fulfil its commitment under the Cotonou Agreement and urgently begin to pursue alternativeswith ACP countries, based on the principle of non-reciprocity instituted in GSP1 and specialand differential treatment in the WTO.

Drop its offensive interest in areas beyond the WTO to which the ACP countries are opposed,specifically the Singapore Issues of investment, competition policy, and governmentprocurement.

Six reasons to oppose EPAs in their current form, 2004

NGOs concerned with trade justice now turned their attention to EU trade policy as well as their longstanding opposition to the WTOs promotion of trade liberalisation. Resources were committed to researchand raise awareness of the likely impact of EPAs. Development economists produced varied predictions ofthe costs and benefits of EPAs to ACP countries (see Appendix 9, p44).

For instance, when considering the impact on trade, ACP exports to the EU are forecast to be10% higher with the EPAs than under the GSP/EBA2 option. In percentage terms, the largestincreases in exports will occur in the livestock sector, which is forecast to at least double inthe EPA scenario. Exports of agricultural products (excluding meat and cotton) and textileproducts are forecast to increase by 40%. On the import side, a 7% average increase overallis forecast for ACP countries in 2015, against 17.7% in 2022. This low forecast in the short

run is explained by the limited liberalization of ACP imports over this time horizon.

On average ACP countries are forecast to lose 70% of tariff revenues on EU imports in thelong run, under the central scenario (H1). The most affected region is ECOWAS. Yet importsfrom other regions of the world will continue to provide tariff revenues. Thus when tariffrevenue losses are computed on total ACP imports, losses are limited to 26% on average inthe long run under H1, and 19% under H2 (when the product lists are optimised).

Furthermore, the final impact on the economy depends on the importance of tariffs ingovernment revenue and on potential compensatory effects. Some positive impacts can beexpected from EPAs, whenever an enlargement of the fiscal basis upon which other publicincomes are based is achieved. However, this long term and less visible effect will mainlydepend on the capacity of each ACP country to reorganise its fiscal base, shifting to otherforms of taxation.

Some improvements in the efficiency of the customs administration could be attained, as aconsequence of diminished trade flows to tax and monitor. Considering a 50% increase in thecollection rate, we find that tariff revenue losses could be significantly alleviated.

An Impact Study of the EU-ACP Economic Partnership Agreements (EPAs) in the Six ACP Regions CEPII-CIREM (prepared for DG Trade but not necessarily reflecting its views), January 2008

1Generalised System of Preferences or standard-GSP is a system of exemption for developing countries from the WTOs MostFavoured Nation principle (MFN) member countries must treat the imports of all other WTO member countries no worse thanthey treat the imports of their most favoured trading partner. Richer countries give a selection of products preferential access to

their markets. The EUs GSP scheme significantly less generoous than the terms of the Cotonou Agreement. Critics argue thatGSP has benefited newly industrialising countries, eg India, Thailand, more than least developed countries (LDCs). The GSP+ orSpecial Incentive Arrangement For Sustainable Development and Good Governance scheme provides preferential access that issubstantially higher than GSP for LDCs implementing international standards in human and labour rights, environmental protection,the fight against drugs and good governance.2Everything But Arms (EBA) initiative provides LDCs with duty and quota-free access into the EU for all exports, except arms.

7/30/2019 Reader_lo

9/827

At the Third Africa Social Forum held in Lusaka, Zambia in December 2004, the Africa Trade Networklaunched the Stop EPAs campaign. This was taken up around the continent.

Throughout ACP countries and EU the campaign made use of a wide range of techniques to target differentaudiences in order to mobilise opinion against the negotiations (see Appendix 3, p30; Gallery, p70). Largeprotest rallies sought to gain media attention and raise public awareness of the obscure negotiations, whichwere taking place behind closed doors.

African governments are negotiating for Economic Partnership Agreements (EPAs) with theEuropean Union (EU). EPAs are free trade agreements based on the principle of reciprocity,meaning that Africa will be required to open its borders to duty and tariff-free goods andservices from Europe.

These will have disastrous consequences even worse than structural adjustment programs: Asafarmer,youwillloseyourlivelihoodwhenfacedwithincreasedcompetitionfrom

Europes highly subsidised, cheaper products. Asaconsumer,youwillriskfoodinsecuritybecauseofthecollapseofthedomesticand

regional food markets and your increased reliance on imports. Asacitizen,youwilllosethebenefitofmostofyourgovernmentssocialwelfareschemes,

which will be dropped because of loss of revenue.

Asawoman,youwillcarrytheburdenofadjustmentcosts:losingyourlivelihoodasanagro-processor, taking on more care-giving as social services are dropped, being forced intothe informal sector.

Asagovernment,youwilllosepolicyspacetoprotect,respectandfulfillyourcitizens

human rights. AsAfrica,ourregionalintegrationprocesseswillbeslowedratherthanenhanced.

YOU CAN STOP EPAs BEFORE IT IS TOO LATE.

STOP. THINK. RESIST EPAs. Sign this petition.

Join the petition against EPAs! Stop! Think! Resist!, 2 June 20078www.acordinternational.org

Economic PartnershipAgreements:AThreat to Food Sovereignty J une 2007

#Policy Briefing Paper 1

Food Security:When all people,at all times,havephysical andeconomic accessto safeand

nutritiousfood whichmeetstheir dietary needsandfood preferences.

The European Union (EU) is currently negotiating(EPAs) with 77 AgricultureisthebackboneofAfrica'seconomyandits

StatesinAfrica,theCaribbeanandPacific(ACP). populations'livelihoods.Itistheprimaryactivityof60%

of thepopulation in Sub-SaharanAfricaandaccounts2For thepast three decades,ACP countries havehad forover halfof theGDP insomecountries. Smallscale

preferential access to European markets throughthe farmers produce most of A frica's agriculturalLomandCotonouagreements.EPAswill dramatically production,particularlystaple foodscritical for foodchange this relationship.EPAswill essentially beFree security.

TradeAgreements(FTAs),creatingfreetradebetweentheEUandACP countries,withnodutiesor quotason Since the Universal Declaration of Human Rights insubstantiallyall tradebetweentheregions. 1948, the human r ight to food has developed as a

bindingobligation on States.And in the discourse ofThus, development,there has longbeen talk of the need for

foodsecurity inAfrica.It'sonly inthepast decadethatAccording to the negotiation farmer movementsandcivil societyhavebegunto call

schedule,EPAsaresupposedto takeeffecton1January forFoodSovereignty.2008. EPAs will be reciprocal and legally bindingagreementswithnoenddate; theyrepresentapointof Food Sovereignty proposes a set of precise policy

1noreturn. measures focusingonfoodfor people,valuingfoodproviders, localisingfood systems,puttingcontrol ofresources locally, building knowledge and skills, andworkingwith nature.Food securityand the r ight tofood are realised through the food sovereigntyframework.

FoodSovereignty:HopeforAfricanAgricultureEconomic Partnership Agreements

inorder to continueenjoyingduty-freeaccesstoEurope'smarkets, Africahasbeentold toopenits ownmarkets in return.

Food Sovereignty:

Theright of peoples,communitiesandcountriesto definetheir ownagricultural,labour,fishing,foodand landpolicies,whichareappropriateto their uniquecircumstances

(ecologically,socially,economically andculturally).

1.See COTONOUAgreement. WTO GATTArt. XXIV 8(b) defines a Free Trade area as dutiesandrestrictions oncommerceeliminatedon substantially allt rade.Thisphrasehasbeeni nterpretedasrequiringfree tradefor noless than80%of commerce.

2. See FAO,The State of Food and Agriculture 2006

Campaign materials produced by Stop! Think! Resist! (left) and EcoNews Africa, Seatini and Traidcraft (right)

7/30/2019 Reader_lo

10/828

International NGOs produced more technical briefing papers aimed at trade negotiators, parliamentariansand other policy makers. These questioned many of the assumptions behind EPAs, and argued that therewere alternatives to EPAs which would comply with WTO rules, yet not offer such favourable terms forEuropean corporations.

The free trade Economic Partnership Agreements (EPAs) proposed by the European Unionwould have a devastating effect on African, Caribbean and Pacific (ACP) countries if they

go ahead as planned. New and unfair rules would require developing countries to cut theirtariffs on up to 90% of imports from the EU. Jobs would be lost and livelihoods would bewrecked. European corporations would be empowered and ACP governments impeded. Themost unequal trade negotiations in history could produce the most disastrous results fordevelopment.

Yet there are real alternatives to this outcome.

Both the EU and the ACP must now stop negotiating free trade Economic PartnershipAgreements.

Proposed Economic Partnership Agreements must then be radically reformed so that theEuropean Union makes no liberalisation requirements of ACP countries. ACP countrieswould continue to enjoy preferential access to the European market while maintaining theright to protect their industries from unfair competition. ACP countries would also be able todecide to unilaterally cut tariffs in a strategic and targeted way if they considered it in theirdevelopmental interests to do so. Radically reformed EPAs require changes to the EuropeanCommissions negotiating mandate and WTO rules on regional trade agreements.

There are also alternatives outside the EPA framework. Here, the European Union is in breachof its treaty obligations to the ACP, an opinion backed by legal advice from a lawyer fromMatrix Chambers. Under the Cotonou Partnership Agreement the treaty setting out therelationship between the EU and ACP for the next generation the non least-developed ACPcountries have the right to choose an alternative trade deal should they wish. By proclaiming

possible alternatives as second best, the European Commission is prejudging what thesealternatives might be, thereby violating international and European Community law.

One possible alternative outside the EPA framework is the EUs Generalised System ofPreferences. This offers ACP countries certain advantages because it makes no liberalisationrequirements of them, but under current plans it would effectively exclude some current ACPproducts from the European market.

A second option is the EUs Everything But Arms scheme, currently available only to the verypoorest countries in the world. This would need to be extended to all low-income countrieswith similar development needs. Its rules of origin requirements would need to be improvedand it would need to become a contractual rather than a unilateral preference scheme.

African, Caribbean and Pacific countries must be able to choose between at least two goodalternatives: a radically reformed Economic Partnership Agreement and a pro-developmentalternative.

EU, African, Caribbean and Pacific policy-makers must make the changes necessary to makethis a reality.

The trade escape: WTO rules and alternatives to free trade Economic Partnership Agreements ActionAid,2005

7/30/2019 Reader_lo

11/829

Partnership or powerplay?

EPAs are a real problem for poor countries... Less-developed countries have neither the timenor the capacity to negotiate strong agreements with the EU.

Eveline Herfkens, the UN Secretary Generals co-ordinator for the campaign to promote the MillenniumDevelopment Goals (MDGs)

Another recurring theme in the critique of EPAs is how far the negotiations are a genuine partnership ofequals (see Appendix 10, p45).

The negotiating tactics employed by the Trade Commissioner, Peter Mandelson, and Karl Falkenberg, theEUs chief trade negotiator until January 2009, were seen as arrogant and bullying.

Ministers deplore the enormous pressure that has been brought to bear on the ACP States bythe European Commission to initial the interim trade arrangements.

Council of ACP Trade Ministers, December 2007

This view is echoed in a report evaluating the negotiating process.

A representative sample of African Caribbean and Pacific (ACP) negotiators was asked tojudge whether or not European negotiators had lived up to the rhetoric surrounding theEconomic Partnership Agreement (EPA) talks.

NineoutofthirteenfeltthatEPAsdidnotsupportregionalintegration

Elevenfeltthattheyhadbeenputunderpressuretonegotiatetrade-relatedissuesbythe

European Commission (EC)

ElevenfeltthatEPAswouldforceACPcountriestoliberalisetheirtrade

TenconfirmedthataidwasbeingmadeconditionalonthesigningofanEPA

EightfeltthattheECdidnotlistentoACPconcernsorproposals

OnlytwofeltthatEPAswouldbeinstrumentsfordevelopment.

Other evidence from academic assessments, formal statements and documents obtained fromnegotiations seems to support their views.

Dialogue of the deaf: an assessment of Europes developmental approach to trade negotiations, ICCO,September 2008

Global Europe

The EUs long term agenda for satisfying its own external trade interests is clearly laid out in its GlobalEurope strategy, adopted as part of the Lisbon Treaty in 2006 (see Appendix 12, p50).

More countries than ever before are seizing the opportunities of globalisation. In the secondhalf of the twentieth century, the United States, Europe and Japan drove the global economy.

Today they are being joined by increasingly open and expanding economies, in particularChina and India, but also Brazil, Russia and others. China is already the third largest exporterand likely to become the second largest national economy a few years from now. Within thesame timeframe, India may become the sixth largest.

The nature of global trade is changing as a result. We do not yet live in a world without tariffs,but many sectors are moving in that direction. For Europe, knowledge, innovation, intellectualproperty, services and the efficient use of resources are now the keys to competitiveness.Trade policy and our whole approach to international competitiveness need to adapt.

Global Europe: competing in the world European Commission, 2006

7/30/2019 Reader_lo

12/8210

A major criticism of EPAS has been that although DG trade claims that EPAs aim to meet the developmentneeds of ACP countries, in reality they reflect the EUs need to secure raw materials and markets in anincreasingly competitive world economy (see Appendix 11, p47; Appendix 13, p52; Appendix 14, p54;Appendix 15 p56).

The Economic Partnership Agreements (EPAs) proposed by the European Union do notconstitute a framework of partnership, but are essentially neo-liberal-inspired free market

agreements that prolong imperialist domination and a neo-colonial vision, and which aimto strengthen the position of European multinationals in the context of the rivalry betweenthe most powerful economic trade blocs. In an October 2006 document, the EuropeanCommunity declared its ambition to control the majority of the global market by the year2010.

The EPA requires (with few exceptions) a complete trade liberalization. Our country hasalready lived with, and is still living with, the disastrous consequences of the liberalizationimposed by the International Finance Institutions (IFIs) in the 1980s and with even greaterforce since the years 1994-95. Haiti has become one of the countries most open to foreigntrade, with existing import tariffs set at an average of 2.9% and the vast majority of theimported products coming in with a zero tariff. This situation is largely responsible for the

collapse of whole sectors of the peasant economy which currently generates only 25% ofannual GDP, and can barely produce 48% of the food consumed in our country. Following thisaccelerated liberalization, our country has entered a period of rapid economic decline, whichhas plunged the vast majority of the population (76%) into extreme poverty. We have alsowitnessed an explosion in unemployment. According to available information, in the sectorsproducing rice, sugar, chickens and eggs, more than 830,000 jobs have been destroyedby the liberalization of the 1990s. We cannot accept a continuation along the same path.Agreements like the EPA will accelerate the destruction of our economy.

Declaration of the Haitian Block the EPA coalition, October 20078www.deiberthaiti.blogspot.com

With the WTOs multi-laterial Doha Round of trade negotiations stalled since December 2005, manycritics see bi-lateral negotiations such as EPAs as a more effective means of achieving similar results. TheEU has also been accused of including investment, competition policy and government procurement theSingapore Issues which had been shelved by the WTO.

The focus on bilateralism damages the rights particularly of the poor and the weak becausein a bilateral negotiation the objectivity of a global system goes out the window and you havein effect a bullying opportunity often for the major trading powers.

Peter Sutherland, former WTO Director General and Non-Executive Chairman, BP & Goldman Sachs

Over the past two decades, this right of African countries to pursue their own individual andcollective developmental agenda have been attacked and subverted by the countries of thenorth that dominate the world economic system, as part of their never-ending attempts tofurther open up the economies of African and other developing countries for the benefit oftheir transnational corporations.

The so-called Economic Partnership Agreements being negotiated by African countries (andthe Caribbean and Pacific) with the European Union, are, like other bi-lateral and multilateralfree trade agreements, simply the latest instruments deployed in the attack on our countries.These agreements are set to be even more restrictive of the policy choices and opportunitiesavailable to our governments, and even more severe in their impacts than the World Bank/IMFstructural adjustment policies as well as the WTO agreements.

It has been three years since members of the Africa Trade Network launched their oppositionto the Economic Partnership Agreements. Since then, several hundred civil societyorganisations, social movements, and mass-membership organisations across Africa, theCaribbean, the Pacific and Europe have been pursuing a campaign to STOP the EPAs as

7/30/2019 Reader_lo

13/8211

currently being negotiated between the European Union and ACP groupings of countries.

While there is wide-spread recognition among governments, inter-governmental institutions,parliamentarians, civil society actors and a diverse range of social constituencies across theACP, Europe and the rest of the world of the dangers posed by the EPAs to the economies andpeoples of the ACP countries, this has not yet led to fundamental changes in the design of theEPAs and the process of negotiations.

Expressions of concern among some European Union member-states and institutions aboutthe EU proposals for the agreements have not yet translated into changes in directives for theEuropean Commission. Instead, the EC has simply adopted new rhetoric to continue to imposeits parameters, agenda and momentum on African (and other ACP) groups. Furthermore,while the EC negotiators have sought to strike a public profile of reasonableness, they havecontinued with characteristic arrogance in the negotiations.

On their part, Africas EPA negotiating regions still seem unable to give expression to thefundamental logic of their stated developmental concerns in the overall architecture of theEPA and its different themes. Rather, they have tended to get bogged down in disputes withthe EC over narrow (even if legitimate) questions of support for adjustment costs, transitioncosts and supply-side constraints.

Furthermore, many countries in the African regions have still not fully carried out their ownindependent assessments and studies of the overall as well as sectoral implications of theEPAs. They continue to rely on support from the EC, while the latter continues to reject thosestudies whose outcomes it does not like. In some instances, the secretariats of the regionalgroupings whose role it is to represent the interests of the regions in the negotiations havebeen overwhelmed by the EC.

Above all, in spite of the fact that they are patently not in a position to do so, many of theAfrican negotiating regions are rushing to engage in the more advanced and complex stages ofthe negotiations.

Declaration of 9th Annual Meeting of the Africa Trade Network, 11-14 December 2006

During 2006, more than 100 developing countries were engaged in over 67 bilateral orregional trade negotiations, and signed over 60 bilateral investment treaties. More than 250regional and bilateral trade agreements now govern more than 30 per cent of world trade,

whilst an average of two bilateral investment treaties have been agreed every week overthe last ten years. The rules negotiated in these agreements reflect the bargaining powerbetween the parties. Agreements between developed and developing countries are invariablyimbalanced.

Signing Away the Future Oxfam International, 2007

Campaign graphic with Angelique Kidjo from Oxfam France Agir ici (left)photo: NickStevens/Oxfam; Seventh World Social Forum, Nairobi (right)

7/30/2019 Reader_lo

14/8212

Deadline

With the deadline for the conclusion set for December 31, the campaign against EPAs intensified in2007. The World Social Forum, held in Nairobi in January, saw large demonstrations. Tactics to preventgovernments from signing included a constitutional challenge by the Kenya Human Rights Commission(KHRC), the Kenya Small Scale Farmers Forum (KESSF) and other petitioners against the Government ofKenya to prevent it from signing the EPA on the grounds that it would infringe human rights (see Appendix4, p33).

Stop EPAs Day, 27 September 2007 drew in 219 organisations from 44 countries, including 14international organisations from across the globe! Well known musicians such as Benins world music diva,Angelique Kidjo, Haitis Boukman Eksperyans and Senegalese rapper Didier Awadi added their voice to theprotests.

Do you really wanna killThe economyDo you really wanna killThe industryDo you really wanna killOur fishermen

No manYou wanna kill our countrymenDo you remember the days of slaveryThe type of deals in days of slaveryOnce againYou wanna break our unityStop nowWe wont sign itOn signe pas

Senegalese rapper, Didier Awadi8www.awadimusic.com

In the EU, tried and tested campaign tools photo opportunities outside parliament on Stop EPAs Day,postcards to key policy makers all the tools of modern communication were employed to mobilise opinion YouTube, Facebook, Twitter (see Gallery, p69).

I have a six year old son. I pay for his education, healthcare, lodging, food, directly orindirectly. This means that if I sent him to the labour market and make him get a job, Id savea lot of money. On top of that, hed bring some money back home and Id be financially muchbetter off. Now, if I said that, a lot of people would say that Im very cruel and myopic, butthis is essentially what people say to developing countries when they put pressure on themto liberalise their trade and to integrate with the world economy. Through this agreement thedeveloping countries are being called to open up most of their agriculture and manufacturingto outside competition, and this is like asking a parent of 5 or 6 year old boys to sendtheir children into the labour market so that these children can get a job, get exposed tocompetition, and become a more productive person when they grow up. The trouble is that

Korean economist, Ha-Joon Chang, on YouTube posting for Oxfam8www.youtube.com/watch?v=zukAnEkogn4

7/30/2019 Reader_lo

15/8213

when you send these young children into the labour market, they might become a shoeshineboy or street hawker, they never become brain surgeon, chartered accountant or nuclearphysicist.

Ha-Joon Chang, YouTube posting for Oxfam adapted from Bad Samaritans: The Myth of Free Trade and theSecret History of Capitalism, 2008

In response to the high profile international Stop EPAs campaign, the EU attempted to address the isssues

raised by its critics (see Appendix 7, p40; Appendix 8, p42)

ACP countries would be the first to say that it is essential that there is strong debate overEPAs. But those who suggest that Economic Partnership Agreements are a danger to Africandevelopment are not only wrong, they also undermine those in Africa and other ACP countrieswho are seeking to work constructively towards a new trade and development relationshipwith Europe. In the final phase of this important process, ACP countries need confidence andsupport from their partners to put the final pieces of agreements in place. That is preciselywhat we will be seeking to offer in the weeks ahead.

An open letter to anti-poverty campaigners Peter Mandelson, EU Trade Commissioner, and Louis Michel,EU Development Commissioner, 27 September 2007 (Stop EPAs Day)

An indication of the strength of opposition to EPAs is the fact that although negotiations for a new traderegime should have been concluded by 31 December 2007, only the Caribbean grouping was in a positionto initial a comprehensive EPA (on 16 December). To avoid the disruption of trade and under duress fromthe EU, 18 African and two Pacific countries initialled interim EPAs.

It was clear by late 2007 that EPA negotiations in Africa and the Pacific would not conclude intime. Faced with the legal expiry of the Cotonou trade regime and WTO waiver that covered it,the EU and ACP therefore decided to conclude interim agreements that complied with WTOrules covering trade in goods. This would secure ACP access to EU markets and allow wider

EPA negotiations to continue without legal challenge from other WTO members. All the inbuiltflexibility of WTO rules was used in these agreements to allow the ACP to exclude productssensitive to EU imports from tariff reductions and to spread liberalisation of EU imports overlong transition periods.

Due to the tight deadline, several interim agreements were initialled with individual countriesrather than full ACP regions. However, this is a temporary situation and the aim remains toconclude full regional EPAs. Negotiations over these full EPAs are currently ongoing with allAfrican and Pacific regions and cover a wider range of topics, including any issues set out inthe interim agreements which partners want to re-examine.

Fact sheet on the interim Economic Partnership Agreements European Commission Trade, 2009

Nigeria and Congo-Brazzaville refused to sign any agreement and lost their trade preferences with the EU.This was an almost fatal blow to the Nigerian cocoa processing industry because it imposed a special tariffon processed agricultural products from Nigeria, making it uncompetitive against similar products beingexported to the EU from nations that had endorsed the interim EPA.

In 2008, negotiations continued to secure full acceptance of interim EPAs and move them towards agreedcomprehensive EPAs3, but progress was slower than hoped for by DG Trade because of increased resistancefrom several African countries.

In December 2008, the Kenyan Human Rights Commission and the Kenyan Small Scale Farmers Forum(KESSFF) had the first panel of judges appointed to hear their case against the Kenyan Government. Thischallenged EPAs on violations of fundamental rights and freedoms as laid down in the Kenyan constitution

and international instruments. The Kenyan Government was given until March 2009 to prepare their case.3 Signed = legally binding

Initialled = a commitment to sign, but not legally bindingInterim EPA = agreements that do not yet include services or investmentComprehensive EPA = agreements that include trade in goods and services and investment

7/30/2019 Reader_lo

16/8214

Trade regime from 1 January 2008

EPA

configuration

EPA10 LDCs, 26 non-LDCs

Everything But Arms31 LDCs

General System of

Preferences10 non-LDCs1

Caribbean

Antigua & Barbuda,Bahamas, Barbados, Belize,

Dominica, DominicanRepublic, Grenada, Guyana,

Haiti, Jamaica, St Kitts &Nevis, St Lucia, St Vincent& Grenadines, Surinam,

Trinidad &Tobago

Central

AfricaCameroon

Central African Rep,DR Congo-Kinshasa, Chad,

Equatorial Guinea, So Tome

Gabon,Rep Congo-Brazzaville

Eastern /

Southern

Africa

EAC: Burundi, Kenya,Rwanda, Tanzania, UgandaESA: Comoros, Madagascar,

Mauritius, Seychelles,Zambia, Zimbabwe

Djibouti, Eritrea, Ethiopia,

Malawi, Somalia, Sudan

Pacific Papua New Guinea, FijiEast Timor, Kiribati, Samoa,

Solomon Islands, Tuvalu,Vanuatu

Cook Islands, Tonga,Marshall Islands, Niue,

Micronesia, Palau, Nauru

West Africa Cte dIvoire, Ghana

Benin, Burkina Faso, Cape-Verde2, Gambia, Guinea,

Guinea Bissau, Liberia, Mali,Mauritania, Niger, Senegal,

Sierra Leone, Togo

Nigeria

SADCBotswana, Lesotho,Namibia, Mozambique,Swaziland

Angola

1 The Pacific countries have minimal goods trade with the EU while Nigeria and Congo (Brazzaville) declined to negotiate interimagreements2 Cape Verde loses its LDC status in 2008 but will continue to benefit from GSP/EBA for a transitional period

Source:Fact sheet on the interim Economic Partnership Agreements European Commission DG Trade,20098http://ec.europa.eu/trade/issues/bilateral/regions/acp/index_en.htm

In May 2008, UK MEP David Martin published an open letter in the European Voice, signed by 55 fellowMEPs, calling on Jos Manuel Barroso, President of the EC, to stand with us on the side of the worlds

poor, and reassess and renegotiate EPAs (see Gallery, p73).In October 2008 Peter Mandelson re-joined the British government and was replaced by BaronessCatherine Ashton. In January 2009 Karl Falkenberg became Director-General Environment. For many thechange held the possibility of a new approach to the negotiations. An open letter to the new Commissionerfrom minsters with responsibity for development of Denmark, Ireland and The Netherlands reflected thebelief that a more flexible approach to negotiations was needed and possible (see Appendix 17, p62).

we have much to do to ensure that EPAs genuinely live up to the goals formulated in theCotonou Partnership Agreement. We therefore need to ensure that EPAs will actively supportregional integration and contribute to a regulatory framework that will stimulate economicdevelopment.

If we are to succeed in this, we must be prepared to show more flexibility towards thecountries and regions concerned in the next rounds of negotiations. In May of this year, theEuropean Council already underlined how important it is to take a flexible approach to thetransition from interim agreements to regional Economic Partnership Agreements and called

7/30/2019 Reader_lo

17/8215

on the Commission to make full use of the flexibility and asymmetry permissible undercurrent WTO law so as to reflect the different development levels and development needs ofthe ACP countries and regions. Judging by the vast majority of reactions received from theACP over recent weeks and months, it is clear that as yet no sufficient degree of consensushas been achieved on the disputed negotiating issues as to allow negotiations to be broughtto a successful conclusion. We would therefore like to urgently appeal to the Commission tomake full use of all the flexibility available to us under current WTO law and to actively displaythat flexibility in current negotiations

Ms Ulla Trns, Minister for Development Cooperation, Denmark; Peter Power TD, Minister of State forOverseas Development, Department of Foreign Affairs, Ireland; Bert Koenders, Minister for DevelopmentCooperation, Kingdom of The Netherlands, November 7 2008

The new Commissioner publicly acknowledged the need for a new approach.

Commissioner Ashton and her DG Trade colleagues cannot afford to continue along the samepath followed by the previous Commissioner. I trust that we will see a new flexibility that willbe translated into a practical willingness to reduce the pressure on the ACP to suppress theirreservations, to get on with it, and to sign on the dotted line.

The justifiable plaudits that Commissioner Ashton has received for her change in style andtone must now, as she herself has acknowledged, be matched by a change in substance. Sheis genuinely promising to offer real progress, but many of us cant help fearing that Europe,as the dominant partner, holding all the cards, is unlikely to want to make major concessions.She has inherited a difficult legacy and a great deal hangs on her ability to fulfil the promisethat she displayed both at her hearing in the European Parliament and at the meeting with theInternational Trade Committee.

And surely, as a matter of basic need and self-interest, the EU must now look beyond EPAs tobuild the improved relations with the ACP that will be helpful if Europe wants to broker criticalmultilateral agreements on, for instance, trade and climate change. Clearly in negotiation with

countries such as China, India, and Brazil, Europes alliance with the ACP would be vital.

Glenys Kinnock, MEP, Co-President of the ACP-EU Joint Parliamentary Assembly, Trade NegotiationsInsight, February 2009

The European Parliament also acknowledged the undermining of trust in its relationship with ACP countriesas a result of the negotiations when it passed a resolution to promote the development priorities whichshould be upheld in EPAs. A more radical resolution tabled by the Socialist and Green coalitions wasrejected (see Appendix 18, p64).

The European Parliament

Urges the Council, the Commission and the governments of the EU Member States and ACPcountries to do their utmost to re-establish an atmosphere of confidence and constructivedialogue in so far as it has been damaged in the course of negotiations and to recognise theACP states as equal partners in the negotiation and implementation process

Stresses that there is a need to increase transparency in the negotiations and their outcomesin order to allow for public scrutiny by policy makers, parliamentarians and civil societyrepresentatives

European Parliament resolution [P6_TA-PROV(2009)0051] passed on 5 February 2009

The global financial crisis which finally broke in 2008 clearly demonstrates the dangers of unregulated

liberalisation. It also provides a revealing contrast between the strategies and resources devoted torescuing the discredited international banking system and developed economies, and the lack of similarcommitment and flexibility in dealing with the development needs of the global South. It also highlightedthe dangers of FTAs (see Appendix 19, p19). Bharrat Jagdeo, Guyanas President and an outspoken criticof the Caribbean EPA, called for a pause on its implementation until the turbulence of the crisis is resolved.

7/30/2019 Reader_lo

18/8216

If we have a moratorium on this we will be able to raise some of those funds. The investmentswe need in our economy now by opening it up are not coming because investors cant findmoney; investment has dried up in many of our regions.

Some of the leaders in these countries [Europe] were the strongest advocates of reciprocity inthe EPA and of free trade; and the first sign of trouble [they] move to protect their economies.Now, if these countries cant handle open trade and they have a social safety net for theirpeople and a large per capita GDP, what will reciprocity in the EPA do to us?

Bharrat Jagdeo, President of Guyana, meeting of ACP and EU parliamentarians, 25 February 2009

The European Parliamentary elections in June 2009 provided campaigners in the EU with the opportunityto lobby candidates. In the UK, the Trade Justice Movement launched the Be a Trade Hero campaign. Thisincluded distributing 20,000 postcards which could be sent to Commissioner Ashton asking her to rethinkEuropes trade deals, and a pack for trade justice groups to organise the lobbying of candidates who wereasked to sign a pledge to support a review of trade policy, both EPAs and the new free trade agreementsbeing negotiated under the Global Europe agenda1. 80 candidates signed of whom 18 were elected and willbe asked to fulfil their promises in the new parliament. Over 6,000 cards were eventually presented to theCommissioner.

It is essential that the European Union takes a new approach to trade, one that prioritisesdevelopment, environmental sustainability and human rights in poor countries. As aninstitution, it is accountable to the governments of its member states, who are in turnaccountable to us, the people of europe. With the European parliamentary elections in June2009, and the appointment of a new European Commission in autumn 2009, we have aunique opportunity to turn European trade policy around. A global campaign is alreadyunderway, involving civil society groups in Africa, Asia, and Latin America, as well as acrossEurope, to stop the deals unfolding under the destructive Global Europe trade strategy, andsecure a full-scale rethink. TJM, alongside campaigners around the world, are calling for theEuropean Commission to:

Stop unfair EU trade deals with Africa, Asia and Latin America

Commit before the end of 2009 to rethink EU trade policy so that it prioritises development,environmental sustainability and human rights in poor countries

Open up European trade policy to enable better democratic accountability and scrutiny byparliamentarians and civil society.

MEP lobby pack Trade Justice Movement, February 2009

1 With the WTOs Doha Development Round stalled, the EU is now trying to secure trade deals directly with countries or regions.In 2006, the EU set out its Global Europe trade strategy, identifying 34 countries for free trade agreements (FTA) that will benefitEuropean corporations at the expense of some of the worlds poorest people.

Illustration: TJM

The EU is currently negotiating FTAs with:

Central America (6 countries)

Association of South East Asian States (ASEAN)(7 countries)

Community of Andean Nations (4 countries)

South Korea

India

Mediterranean (10 countries)

MERCOSUR (5 countries).

In total, these countries are home to 922 million people who liveon less than US$2 per day.

7/30/2019 Reader_lo

19/8217

The key objective now is to sign and provisionally implement all agreements concluded atthe end of 2007. Only once they have been signed can these agreements be notified to theWTO and secure duty-free, quota-free market access currently granted by the EU. The mainstrategic objective remains the end of successful negotiations and the signing of full EPAswith all ACP regions, based on a shared vision for the future. Only full EPAs can deliver acomprehensive approach to trade and development in ACP regions.

Update on Economic Partnership Agreements European Commission DG Trade, 23 March 2009

Although the EU had hoped to conclude all EPA negotiations by June 2009, several African countrieshave learnt from the Caribbean experience and held out for more favourable terms. Caribbean countriessigned up to a full EPA to avoid being penalised. As Professor Norman Girvan has pointed out, although thepercentages of total exports affected are small, they involve politically vulnerable sectors such as bananaswhich employ a large number of people. The EU knew this and played on it ruthlessly. Guyana was thecountry that would have been worst affected by the threatened imposition of tariffs on their goods andservices yet it was the one that most strongly held out against signing a full EPA and did so only aftergetting an agreement to review the EPA within 5 years. Had the Caribbean stood together, they could haverefused to surrender to the EU threats to their exports. African countries are facing similar threats but manyof them have refused to sign until their concerns about safeguarding their development needs are met. By

not capitulating to the EU, they may end up getting a better deal than the Caribbean.

The division of labour among nations is that some specialize in winning and others in losing.

Open Veins of Latin America: Five Centuries of the Pillage of a Continent Eduardo Galeano, 1971

As the EPA negotiations draw to a close, the whole protracted process provides insight into the difficultyof trying to create a world economic system which produces a more equitable distribution of the worldsresources, and meets the needs of the poorest of the poor the Bottom Billion. The fractious negotiations,lack of transparency and abuse of power which have characterised the EPA negotiations are a warningthat developing a genuine partnership to address the global financial crisis and the growing threat of globalclimate change will require real committment to change the troubled relationship between rich and poornations.

Much of last year was characterised by a fuel and food crisis that saw the most rapid priceescalation in living memory. Just as the historically high oil prices threatened the viability offuel intensive industries and impacted on the cost of transportation and food production, sodid food prices threaten to condemn millions around the world to hunger and poverty

This fuel and food crisis was followed by the unparalleled current global financial andeconomic crisis which has overturned decades of economic orthodoxy underpinned by the neoliberal ideology and characterized by free market fundamentalism. The virtual collapse of thefinancial markets in the major capitals of the world has led to losses in excess of 50 trillion

US dollars, left millions of workers jobless and homeless, and created an atmosphere ofuncertainty and anxiety. The crisis has sapped the confidence of the markets, led to recessionin the developed world and a bleak outlook for developing countries.

The collapse of the ideology of unfettered markets and the election of Barack Obama asthe President of the United States have created the opportunity and hope for the reformof colonial and post colonial international relations and institutions such as the UnitedNations, the IMF, the World Bank and the World Trade Organizations, all with their inherentbias towards the interests of the developed world. The challenge remains to reshape globalrelations so as to make this century the century of the developing world where five of the sixbillion inhabitants of the world reside.

Bharrat Jagdeo, President of Guyana, Independence Day speech, 26 May 2009

7/30/2019 Reader_lo

20/8218 Appendix 1

World trade timeline1944 Bretton Woods Conference framework for post-war international trading system proposals

to set up International Trade Organisation (ITO), International Bank for Reconstruction andDevelopment (World Bank) & International Monetary Fund (IMF)

1945 Treaties to create World Bank and International Monetary Fund (IMF) signed8www.imf.org;8www.worldbank.org

GATT trade rounds

year location subject countries

1947 Geneva, Switzerland tariff reduction 23

1949 Annecy, France tariff reduction 13

1951 Torquay, UK tariff reduction 38

1956 Geneva tariff reduction 26

1960-1961 Geneva, Dillon Round tariff reduction 26

1964-1967 Geneva, Kennedy Round tariff reduction & anti-dumping measures 62

1973-1979 Geneva, Tokyo Roundtariffs, trade barriers, eg subsidies frameworkagreements 102

1986-1994 Geneva, Uruguay Round

15 issues including tariffs, non-tariff measures,rules, services, intellectual property, disputesettlement, textiles, agriculture, creation ofWTO, etc

123

1961 Organisation for Economic Cooperation and Development (OECD) formed to help itsmember countries to achieve sustainable economic growth and employment and to raisethe standard of living in member countries while maintaining financial stability; currentmembership: Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France,

Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, theNetherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden,Switzerland, Turkey, United Kingdom, United States (EU has quasi-member status); sharesexpertise and exchanges with other countries, including Brazil, China, and Russia8www.oecd.org

1948 International Trade Organisation (ITO) Charter agreed in Havana: seeks to establish

specialised agency of United Nations to administer rules on employment, commodityagreements, restrictive business practices, international investment, and services; in 1950 USCongress refuses to ratify and ITO abandoned

1948 Organisation for European Economic Co-operation (OEEC) formed to administer US aid towar-torn Europe under the Marshall Plan initial 18 members aimed to develop intra-Europeantrade by reducing tariffs and other barriers to the expansion of trade and study the feasibility ofcreating a customs union or free trade area; became OECD in 1961

1948 General Agreement on Tariffs & Trade (GATT) comes into effect: interim organisation to boosttrade liberalisation and remove protectionist measures from early 1930s

from left: logos of IMF, World Bank, WTO

7/30/2019 Reader_lo

21/8219Appendix 1

1964 first United Nations Conference on Trade & Development (UNCTAD) to address concerns ofdeveloping countries: agree to meet every four years8www.unctad.org

Group of 77 (G-77) established by seventy-seven developing countries at UNCTAD; currentmembership of 131 countries largest intergovernmental organisation of developing statesin the UN; provides the means for the countries of the South to articulate and promotetheir collective economic interests and enhance their joint negotiating capacity on all majorinternational economic issues within the UN system, and promote South-South cooperation for

development8

www.g77.org1973 Yom Kippur/Ramadan War results in oil price increase by Organisation of Petroleum Exporting

Countries (OPEC) who deposit petro-dollars in Western banks which make low interest loansto developing countries with little concern for how they will be used or how they will be repaid

mid 1970s falling commodity prices and rising interest rates increase debt service requirements fordeveloping countries

1975 Group of Six (G-6) formed: in response to global recession following 1973 oil crisis leaders ofFrance, Italy, Japan, UK, USA, West Germany agree to meet annually to facilitate cooperationamong worlds largest industrial democracies; finance ministers meet to discuss and coordinateactions on economic and commercial issues; 1976: becomes G-7 with addition of Canada;1977: EU is represented by President of EC; 1997: becomes G-8 with addition of Russia;

2005 five Outreach Countries Brazil, China, India, Mexico and South Africa included inseparate meetings to give impetus to WTO Doha Round G8+5

WTO trade rounds

19961st Ministerial Conference,Singapore

disagreements between developed and developing economiesemerged during this conference over investment, competitionpolicy, government transparency and government procurement the Singapore Issues

19982nd Ministerial Conference,Geneva

19993rd Ministerial Conference,Seattle

ended in failure, with massive demonstrations and riots drawingworldwide attention

2000General Agreement onTrade in Services (GATS)

negotiations to liberalise trade in services, eg water, education,health, undertaken in special meetings of Services Counciland regular meetings of committees and working parties; nowincorporated into Doha Round

20014th Ministerial Conferencein Doha, Qatar

agree to begin Doha Development Agenda new negotiationson opening markets to agricultural & manufactured goods andservices

2003 5th Ministerial Conference,Cancun, Mexico

the G20 (a group of developing countries led by India, China and

Brazil), called for an end to agricultural subsidies and resisteddemands to include Singapore Issues; the talks broke downwithout progress

2004 Geneva

talks achieve a framework agreement on the Doha Round developed countries will lower agricultural subsidies; in exchangedeveloping countries will lower tariff barriers to manufacturedgoods

2005Sixth MinisterialConference, Hong Kong

continuation of Doha Round negotiations

2008 Geneva

collapse of Doha Round negotiations: developing countries refusenew improved offer to open Europes market for agricultural

imports and reduced subsidies for US farmers in return for greateraccess to their non-agricultural markets; US rejects developingcountries demands for flexible subsidies to protect small farmersfrom surges in subsidised imports to improve food security

7/30/2019 Reader_lo

22/8220 Appendix 1

1982 Mexico threatens to default onforeign debt: Structural AdjustmentProgrammes (SAPs) introduced forMexico and other countries with severedebt servicing problems; export-led growth, trade liberalisation andprivatisation of nationalised industriesare major components of SAPs

beginning of Debt Crisis

1985 Group of Seven (G-7) set up tofacilitate cooperation among worldslargest industrial democracies Canada, France, Germany, UK, Italy,Japan, USA (European Commissionattended since 1981 finance ministers meet to discuss and coordinate actions on economicand commercial issues

1994 North American Free Trade Agreement (NAFTA) implemented

1995 World Trade Organisation (WTO) established to provide legally binding trade rules8

www.wto.org1995 Multilateral Agreement on Investment

(MAI) negotiations launched at theAnnual Meeting of the Organisation forEconomic Co-operation & Development(OECD) to provide a broad frameworkfor the liberalisation of internationalinvestment regimes and protectionfor foreign investment abandonedin April 1998 following internationalcampaign

1995 Trans Atlantic Business Dialogue(TABD) set up to facilitate EU-US tradethrough meetings between CEOs ofmajor corporations and working groupswhich submit proposals to US and EUleaders at the annual US-EU Summit8www.tabd.com

1998 Heavily Indebted Poor Countries (HIPC) Initiative to qualify for relief countries have to preparea Poverty Reduction Strategy Paper (PRSP) which is assessed by lenders who believe thatpoverty reduction is best achieved through economic growth brought about by privatisation,deregulation and rapid integration into the global economy

1999 Group of 20 set up G-7 nations plus Argentina, Australia, Brazil, China, EU, India, Indonesia,

Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey following complaints thatemerging countries interests not represented at G7 meetings

2004 IMF introduces Trade Integration Mechanism to assist member countries to meet balance ofpayments shortfalls that might result from multilateral trade liberalisation

2005 IMF and World Bank implement Multilateral Debt Relief Initiative for 19 countries 100%debt relief for countries which qualify for HIPC initiative to release resources to achieve MDGs

2008 Collapse of Doha Round in July when India, China and US failed to agree the level at whichdeveloping countries can protect poor farmers by imposing a tariff on agricultural imports in theevent of a drop in prices or a surge in imports

2008 Global Financial Crisis precipitated by loss of confidence in worlds financial and bankingsystems creating the most serious financial crisis since the Great Depression; global impact

includes bankruptcies of key businesses, declines in consumer wealth estimated in the trillionsof US dollars, substantial financial bail-outs by governments, and a significant decline ineconomic activity

Protests against the MAI outside WTO in Geneva

Corporate influence in Mindanao, Philippines

7/30/2019 Reader_lo

23/8221Appendix 1

EU trade policy

1957 European Economic Community (EEC) set up between Belgium, France, Italy, Luxembourg,The Netherlands, West Germany: part of the Treaty allows for European Development Funds(EDFs) to provide aid to non-European countries with close relations to member states(1973 accession of Denmark, Ireland, UK; 1981: Greece; 1986: Portugal, Spain; 1995:Austria, Finland, Sweden)

1963 Yaound Convention gives trade preferences and aid to 18 African ex-colonies

1971 European Management Forum set up: European business leaders meet at Davos,Switzerland, under patronage of European Commission and industrial associations; graduallyexpands focus from management practices to economic and social issues political leadersinvited in 1974; 1976 membership system of 1000 leading companies of the worldintroduced; 1987 changes name to World Economic Forum8www.weforum.org

1975 Lom Convention: sets principlesbehind partnership between EU (thenEEC) and former colonies in Africa,Caribbean and Pacific (ACP) on aid,trade and political relations; includestrade preferences for imports atguaranteed prices, eg sugar, bananas;aims to eradicate poverty throughsustainable development broughtabout by greater integration into theworld economy

1990s EUs development cooperation policiesincreasingly include conditionalitiesand aim to create a suitable trade,investment and legal climate to enableEuropean companies to penetrateoverseas markets

1995 Generalised System of Preferences(GSP) unilateral preferential marketaccess to EU for ACP exports; 2001under Everything But Arms (EBA)provision, all imports to the EU fromthe Least Developed Countries areduty free and quota free, with theexception of armaments transitionalarrangements for bananas, sugar andrice

2000 Cotonou Agreement between ACP and

EU: replaced Lom Convention newissues include security, arms trade,migration; agreement to negotiate WTOcompliant trade agreement by 2007

Lisbon Strategy launched; by 2010 EUaims to be the worlds most dynamic,competitive, knowledge-based economy capable of sustainable economic growth with moreand better jobs and greater social cohesion while respecting the environment

2002 Economic Partnership Agreements (EPAs) negotiations between EU and ACP to replaceLom Convention with free trade agreements which comply with WTO rules

2006 Global Europe: Competing in the WorldEuropean Commission outlines the agenda for

external trade to enhance the competitiveness of the EU within the framework of the WTOand achievel the goals of the Lisbon Strategy; covers trade, investments, public procurement,intellectual property rights, market access issues and a strategy for trade with China

8http://ec.europa.eu/trade/issues/sectoral/competitiveness/global_europe_en.htm

Humanitarian aid image produced by EU to symbolise its role, 2004

Togolese read about the Lom Convention, 1975

7/30/2019 Reader_lo

24/8222 Appendix 1

Resistance

1980 Emergence of Karnataka State Farmers Association (KRRS) as a movement for socialchange at all levels including opposition to trade liberalisation

1984 Foundation of Landless Workers MovementMovimento dos Trabalhadores Rurais Sem Terra(MST) in Brazil

1980s emergence of Global Justice Movement in opposition to neo-liberal, corporate globalisation

economic policies promoted by IMF, World Bank, WTO; massive citizen protests andalternative summits: 1988 annual meetings of IMF and World Bank in Berlin, 1994 50thAnniversary of IMF and World Bank in Madrid8www.globaljusticemovement.org

1993 La Via Campesina international peasant movement launched to promote interests of smalland medium sized farmers8www.viacampesina.org

1994 Maquila Solidarity Network set up to to support struggle for labour and womens rights inglobal supply chains8www.maquilasolidarity.org

1996 global encounter convened by Zapatista Army of National Liberation in Chiapas, Mexico;6000 participants form a collective network of all our particular struggles and resistances...an intercontinental network of resistance against neoliberalism... (and) for humanity

1998 Launch of Peoples Global Action in

Geneva as a anti-capitalist globalisationnetwork which coordinates decentralisedGlobal Action Days around the worldto highlight resistance of popularmovements, including Carnival AgainstCapitalism in cities around the world(1999), WTO Ministerial in Seattle(1999), G8 Summit in Genoa (2000),WTO Ministerial in Qatar (2001)8www.agp.org

2001 World Social Forum set up by alter-

globalisation movement as antidoteto World Economic Forum to shareexperiences and develop strategies under the sloganAnother world is possible; it supportsglobalisation which puts democracy, economic justice, environmental protection, and humanrights ahead of economic concerns; meets annually, initially in Porto Alegre, Brazil, abutrecently in Mumbai, India (2004), a polycentric event in 2006 Caracas (Venezuela), Bamako (Mali), Karachi (Pakistan) andNairobi (Kenya)8www.forumsocialmundial.org.br

2002 European Social Forum meets in Florence under sloganAgainst war, racism and neo-liberalism; subsequent forums inParis (2003), London (2004), Athens (2006), Malmo (2008);

other regional, national and local social forums have developedaround the world

2004 Global Call to Action Against Poverty (GCAP) launched tocampaign for an end to poverty and inequality including debtcancellation and trade justice; now words largest civil societymovement with over 900 affiliated organisations from 70countries; in UK campaigners responded with MakePOVERTYHistory8www.whiteband.org

2004 Six Reasons to Oppose EPAs in their Current Form paperpublished by leading ACP and EU civl society organisationsdemanding more development-centred alternatives to the EPAs

start of an international campaign2008 First EPA signed between 13 Caribbean countries and EU;

Bahamas refuses to sign

Protesters in Genoa, 2000

7/30/2019 Reader_lo

25/8223Appendix 2

Six reasons to oppose EPAs intheir current form

Response from 20 leading ACP and EU civil society organisations to some of the key arguments putforward in support of Economic Partnership Agreements (EPAs) by the EU.

This paper is a response from leading ACP and EU civil society organisations to some of the key argumentsput forward in support of Economic Partnership Agreements (EPAs) as currently envisaged by the EU.

The undersigned organisations believe that trade can bring genuine benefits to the economies of ACPcountries and to some of the poorest communities in those countries. Yet the EPAs as currently envisagedby the EU will not afford these benefits. It is for this reason that the undersigned organisations areparticipating in or supporting campaigns led by civil society organisations from ACP countries to StopEPAs.

The paper sets out some of the arguments for our position on EPAs and is a contribution to the furtherdiscussion that is necessary for development-centred alternatives to the EPAs as currently envisaged.

November 2004

Myth 1: EPAs are about development

The Cotonou Agreement states that the objective of Economic Partnership Agreements is to reduce povertyby supporting the sustainable development and the gradual integration of the ACP countries into the worldeconomy. Unfortunately, the current direction of the EPA negotiations looks set to undermine rather thanfacilitate such objectives.

Although the precise nature of EPAs officially still has to be decided (and the option of an alternativeremains open, according to the Cotonou agreement), the EU sees EPAs as reciprocal free trade agreements(FTAs) which it will negotiate on a bilateral basis with ACP countries or regions.1 As such, the EU insiststhat EPAs comply with the rules of the World Trade Organisation (WTO) on FTAs, stipulated in Article 24 ofGATT 1994. This article states that FTAs require an elimination of tariff barriers on essentially all trade(interpreted by the EU as 90%2) within a reasonable time (10 years, apart from exceptional cases). AnEPA based on this premise would bring about rapid and deep liberalisation3 between the worlds largestsingle market and the worlds poorest countries.4

For example, the 27 countries that the UNDP marks as having the lowest human development are allACP countries. While there is general agreement that trade can be a powerful tool for development, agrowing body of literature argues that rapid trade liberalisation does not on its own automatically lead topositive development outcomes. Countries should be able to choose the trade-policy option that best suitstheir development priorities and needs. Trade liberalisation should not be seen as a substitute for a sounddevelopment strategy. Moreover, it needs to be timed and sequenced carefully: there are different optimaldegrees of openness at different stages of development, and it is generally agreed that, in order for an open

trade regime to bring growth and development, countries must first have certain necessary conditions inplace such as healthy economic sectors, potentially competitive produc ers, reasonably well-developedmarket institutions, and effective state capacity.5 Yet ACP countries suffering from serious supply-sideconstraints generally lack these conditions, which is why they have asked for reciprocity to be applied onlyafter development indicators have been met.

As economist and Financial Times journalist Martin Wolf has noted, trade liberalisation, as an aim,regardless of the circumstances, will not generate rapid growth. On this there is no disagreement, and neverhas been among serious analysts.6

In 2004, the UK government in a White Paper on Trade and Investment asserted that the EU as a wholehas made clear that we do not have offensive market access interests, and the UK will seek to hold our EUpartners to this.7 Yet the EUs current approach to EPAs as reciprocal FTAs means that ACP countries are

being asked to open up to EU goods before they are in a position to compete, which could be devastating tothese countries economies and livelihoods. The reciprocity that the EU is demanding could be particularlydamaging in the area of agriculture, which is so central to most ACP countries economies and livelihoods.This is especially true in a situation where the EUs overall spending on the Common Agricultural Policy

7/30/2019 Reader_lo

26/8224 Appendix 2

(CAP) will remain at around @40bn per year until 20138 and where the average EU farmer receives 100times more in agricultural support than the average annual earnings of an African peasant farmer.9

ACP countries could also face major losses to their fledgeling industrial sectors. It is increasingly recognisedthat when countries apply trade liberalisation before they have consolidated strong economies andinstitutions, de-industrialisation often ensues.10 This point was recently stressed by the Commission onAfrica, established by UK Prime Minister Blair, which stated that [for trade to work as instrument ofdevelopment] liberalisation should be non-reciprocal, to allow African countries to protect their infantindustries.11 And the ECs own mid-term report on Sustainability Impact Assessment warns that EPAsmight accelerate the collapse of the modern West African manufacturing sector and could also furtherdiscourage the development of processing and manufacturing capacity in the ACP countries in exportoriented and other industries.12

The EU argues that existing imbalances can be addressed through asymmetrical liberalisation, whichwould mean a differential approach to product coverage and to the pace and timing of liberalisation.However, proposals for longer timeframes, combined with lower percentages of liberalisation for ACPs, donot solve the problem.13 Many ACP countries are poorer today than they were two decades ago and couldbe in worse shape in 10 or 20 years. Yet the EU insists on tying reciprocity to pre-determined timelines andinsists that a development component would only come in parallel with opening of markets.

Myth 2: The multilateral trading system is the hallmark of EU external policy

Time and again the EU has asserted its commitment to the multilateral trading system, emphasising therole of the WTO as the principal forum for negotiating the terms of economic relations with trading partners.At the hearings of the European parliament, the EU Commissioner-Designate for Trade Peter Mandelsonreiterated this commitment and added we should not do anything that could be seen as calling thatcommitment into question or divert attention from the WTO.14 However EPAs will do exactly that.

First, WTO negotiators in Geneva are already working to an overloaded agenda. Most ACP countries areseverely disadvantaged by the small size of their delegations; their inability to participate effectively inmeetings; and opaque processes that leave them marginalised and assumed to be part of the consensus ifthey are not physically present to argue their case. Moreover, many ACP countries have scarce negotiatingresources in their capitals and EPA negotiations will only spread this capacity more thinly. In the words ofEveline Herfkens, the UN Secretary Generals co-ordinator for the campaign to promote the Millennium

Development Goals (MDGs), speaking at the European parliament: EPAs are a real problem for poorcountries.[...] LDCs that include many ACP countries have neither the time nor the capacity to negotiatestrong agreements with the EU. ACP countries face huge difficulties in the WTO negotiations.15

Secondly, EPAs threaten to undermine the positions that the ACP countries have defended in the WTO.In the WTO context, ACP countries have in the past traded away vast tracts of their national policy spacein exchange for market -access commitments, many of which have still to materialise. Having learnedfrom such painful experience, they formed an ACP/AU/LDC alliance (also known as the G-90) in the WTOnegotiations to defend their own development priorities. In Cancun they signalled once and for all that theinterests of small and vulnerable countries could no longer be ignored. However, it is much harder for ACPcountries to maintain this resolve in the EPA negotiations, given their level of dependence on the EU formarkets and development funds.16

The European Commission claims to believe in the complementarity between multilateralism andpreferential agreements. However, in reality the EUs agenda for bilateral and regional trade agreementshas always been ambitious and EPAs are no exception.17 For example, topics that the ACP countrieshave strongly resisted in the WTO are now up for re-negotiation in EPAs. Three of the four Singapore Issues(investment, competition, transparency in government procurement) of which the EU has been thestrongest proponent were dropped from the Doha work programme as a result of continued opposition byACP countries, in alliance with other developing countries. Yet all are still prominent on the EPA negotiatingtable. In effect, ACP countries will have to refight a battle already won in the WTO, but from a weakerbargaining position. Moreover, the EU is pushing for EPAs to go further than was envisaged in the WTO. Forexample, in the WTO the negotiations were on transparency in government procurement, while in EPAs theEU is asking for liberalisation of public procurement on the basis of non-discrimination.18

And there are further stark inconsistencies between what the EU has offered ACPs in the WTO and what itdemands from them in EPAs. In the spring of 2004, the EU offered the ACP/AU/LDC alliance a so-calledRound for Free, which proposed to exempt these countries from commitments on tariff reductions foragricultural and industrial products, in exchange for their support for the overall EU position. But as the

7/30/2019 Reader_lo

27/8225Appendix 2

Dutch minister for Development Co-operation, Mrs van Ardenne- van der Hoeven, remarked recently: [Around for free] may even be perceived as somewhat misleading, since the EU is negotiating free marketaccess for itself in the EPAs with ACP countries.19

Myth 3: ACP governments want EPAs