Negotiating EPAs with the EU

EPA negotiations are going on in Accra right now.  Remember, the EU and the West depend upon African resources.  Africans need to drive some hard bargains in order to participate in the benefits of African wealth.

ECOWAS EPA Meeting

Ahead of an ECOWAS experts meeting on the Economic Partnership agreement (EPA) with the European Union (EU), to be held in Accra from 20-22nd of February 2013, there are gloomy clouds on the horizon, firstly about the possible direction that ECOWAS officials’ might lead the region and ‘betray’ their peoples and the sub-region by reversing current negotiating positions and offering even more liberal terms to an intransigent and aggressive European Union; and secondly, about the role that Ghana might play in such an unfortunate turn of events. ECOWAS CSO’s have issued a public admonition to the officials about the prospect of such a ‘betrayal’

Given Ghana’s delicate and potentially game-changing position in the West African EPA framework, it is imperative to call on the Government to show consistency of purpose and offer some leadership at this critical juncture in the EPA process.

The Ghanaian President spoke against the EU’s imposition of arbitrary and aggressive deadlines on countries like Ghana to sign the EPAs as well as the EU’s insistence on far-going, outright liberalization and how these will damage national revenue (through sharp reductions in customs revenue collection); adversely impact entire economies of what are still developing and least developed countries; and undermine regional economic integration such as that pursued by West African states through ECOWAS.

…

Despite such clear grasp of the fractious and anti-developmental nature of the current EU-driven EPAs, Ghana has continued to equivocate on its own EPA positions in ways that undermine and weaken ECOWAS as a whole. Even the pro-free trade World Bank states that opening of more than 65% of West African markets on equal terms to EU companies and goods will destroy domestic industry. Yet, in the face of an already struggling Ghanaian industry, barely gasping under the choking weight of unfair competition by imports, and despite the ECOWAS position of 70% market opening in the EPAs, Ghana’s go-it-alone interim EPA offers an 80%+ opening to the EU. As long as such as this exists the EU will use it as a benchmark pushing the entire region towards this lower, disastrous threshold.

Such inconsistency is all the more dangerous in the face of the contrasting single-minded aggressiveness of the EU to exploit its political position to gain pole position in certain global markets both to export its way out of its current crisis and to secure its competitiveness for the future. …

For the EU, this strategy is continuously being developed, evolved and renewed. For instance in 2008 the EU launched its raw material initiatives that seeks to enable Europe gain unimpeded access to raw materials to guarantee proper and sustainable functioning of the EU economy. … It is therefore not strange that the issues expressed in the raw materials initiative find expression in the EPA negotiations.

The European Union had based its assessment and projections for the coming decades on the firm conclusion that its survival depends on access to and control of strategic raw materials, assets and markets across the world hence the growing importance to it of projects such as the EPAs.  With the rise of new competitors on the global scene like China, the need to leverage spheres of interest and markets controlled since colonial times increases even more, and with it, the (as yet) non-violent political warfare for the Continent’s (Africa) resources. The warfare will be intensified in the wake of the never-ending financial and economic crises that engulfed the euro-zone since 2008.

The stakes are very high. For us, it is our economy, our development and our livelihoods. But it is also about our governments and their integrity at the national but also the sub-regional level as well.

Sylvester Bagooro, Programme officer, Third World Network-Africa; email:politicaleconomy@twnafrica.org

West African Civil society strongly oppose further opening of West African market to the EU

We strongly opposed to any new concession for opening the West African market to the European Union and are warning West African negotiators against any violation of the mandate given them by the region.

…

The civil society reminds West African experts as well as policy-makers of three pieces of evidence:

(1) the EPA is a trade agreement with a partner and, as such, cannot be a substitute for the trade policy in Africa West, let alone determine or influence the economic choices of the region that needs some appropriate policy space to build its development;

(2) Being aware of the risks that the failure to conclude an EPA could have on regional integration, especially through the signing of interim agreements with countries in the region, the civil society has never rejected the EPA negotiations, but they have always remained constant about their willingness to only accept an agreement that promotes development;

(3) In accordance with the MMC’s recommendations of November 2011 in Accra, the civil society requested West African decision-makers to initiate immediately a high level policy dialogue with the European Union to find a fair solution that would protect current and future interests of Côte d’Ivoire, Ghana and the entire West African region.

Source: West African Civil Society Platform on Cotonou Agreement (POSCAO)

It is in the economic interests of the EU and the West in general that African countries remain underdeveloped suppliers of raw materials.   Aid and EPAs provide a cover for agricultural dumping and other unfair trade practices that undermine African business,  farmers, and entrepreneurs.  It would be in all our interests if Ghana will provide some leadership with a bit of backbone in the current EPA negotiations.

 

EPAs – Some Partners Are More Equal Than Others

The petition below has my heartfelt support. EPAs have nearly destroyed Ghana’s poultry industry (and a great many more economic sectors) and severely damaged our family farming efforts. The EU dumps frozen chicken parts on Ghana and West Africa that are subsidized to sell below what it costs to produce them. Frozen chicken parts are not as tasty or as healthy as locally grown chicken, but they are cheaper, and the Ghana poultry farmers can’t compete. Only a few times a year, generally on holidays when people want something really good, will they splurge and buy chickens grown locally.

As it says in the petition below:

The EU’s current economic crisis is partly due to the same unbridled liberalisation policies it is trying to impose on us through the EPAs.
… we locked ourselves into agreements that predictably provided all the guarantees and benefits for our ‘partners’. We are left with dwindling shares, missed opportunities, the destruction of livelihoods and of the very environment we live in! Our national and regional development plans and their integration must come first and determine the scope and content of any EPAs. The world is very different at the end of 2011 than it was at the beginning of 2002 when EPA negotiations began. The speed of change, including negative change is the key feature of economic fortunes. The entire ECOWAS leadership and the Government of Ghana must begin to lay down concrete alternatives to the EPA as they meet in Accra this week.
…
Thirty or so years of trade liberalisation … has brought collapse of industries, paralysis of agriculture and unprecedented mass unemployment and youth discontent in our societies.

As another press release from Third World Network Africa points out:

The other change [since 2002] is in the shifting centre of gravity of the global economy from regions like Europe to East Asia. Our contention is that the IEPA must be abandoned. It is a threat to the re-positioning of the national economy and to regional integration in ECOWAS.

The full text of the petition is below the graphic. The distinguished groups who sponsor and sign it are listed at the end, all members of the EJN, Economic Justice Network of Ghana.

Handshake wrapped in money, who gets the money?

PETITION TO THE MINISTER OF TRADE AND INDUSTRY ON THE ECONOMIC PARTNERSHIP AGREEMENT
Written by members of the ECONOMIC JUSTICE NETWORK OF GHANA (EJN)
Monday, 28 November 2011 14:29

GHANA CANNOT RIDE TWO HORSES – PETITION TO THE MINISTER OF TRADE AND INDUSTRY ON THE ECONOMIC PARTNERSHIP AGREEMENT (EU) WITH THE EUROPEAN COMMISSION ON 28TH NOVEMBER 2011

1.0 Preamble

As Ghana hosts the ECOWAS Ministerial Monitoring Committee Meeting (MMC) from the 28 -30th November 2011, the preservation of the coherence of our Economic Community and the future of West Africa’s Regional Integration hangs in the balance. The so-called Economic Partnership Agreement (EPA) West Africa is currently negotiating with the European Union (EU) has already caused costly divisions in ECOWAS.

The EPA has created at least 3 contradictory trade regimes in a region that is supposed to have a single unified trade regime. LDCs in West Africa currently trade with the EU under the non-reciprocal Everything But Arms regime; as a non-LDC, Nigeria trades under what is known under the EU GSP; and Cote d’Ivoire has a bilateral EPA with the EU under which it is exempt on a small range of taxes imposed on Nigerian exports to the EU, BUT in exchange for exempting 81% of all imports from EU into Cote d’Ivoire from any tariff whatsoever.

The EU is our biggest trading partner and impacts our economies for better or for worse. Goods coming into West Africa from the EU will come in at 3 different tariff regimes and costs. What then will happen to the flow of these goods from each of these three sets of countries into each other as well as all other goods trade that exists between them? It is not difficult to imagine the trade bans, blockades and wars that will escalate within the region. This is the state of affairs that exists in West Africa as the MMC convenes in Accra today. The implications for ECOWAS are simply staggering.

But in can get much worse. In addition to these three trade regimes Ghana is on the brink of finalising and making PERMANENT its own INTERIM EPA which it undertook as a temporary measure three years ago. The Ghana IEPA has only slightly better terms in the scope of free entry it allows imports from Europe. Thus, Ghana will join Cote d’Ivoire in offering EU imports the most liberal, widest and therefore potentially most damaging market access. Meanwhile Ghana’s terms are not identical to that offered by Cote d’Ivoire. In effect, the Government of Ghana would have created a FOURTH trade regime in West Africa. How can anyone seriously claim that this is and will remain in the national interest of Ghana? If taken any further, Ghana’s unilateral stance will be a disaster for herself and for the region she is permanently tied to!

However this need not happen if Ghana and sister West African governments show vision and leadership and put the defence of ECOWAS’ integrity today and its progressive development tomorrow as the central common priority and shared destiny.

The current MMC which gets underway in Accra this morning and the outcomes it produces will accelerate ECOWAS fracture or consolidate and enhance its future.

2.0 Issues in the EPA and Our Position:

1. The threats by Ghana Government to sign and ratify the interim EPA initialed in 2007 will destroy efforts over the years to integrate as one region. Ghana’s Interim EPAs eliminates tariffs on above 80% of EU trade goods but the collective ECOWAS EPA is currently offering much less than that. ECOWAS is now considering 70% offer, we think this is already too high and too dangerous for our economies! But the EU still rejects the (excessive) 70% offer. The EU is intransigent to the ECOWAS position because once it has the 80%-plus benchmark from Ghana (and Cote d’Ivoire) it knows West Africa’s common stance has been greatly weakened. The EU’s ruthlessness, divisive and bullying stance in the EPAs has been officially acknowledged and condemned by African governments, including Ghana. But the example and fact of Ghana’s IEPA gives the EU clear evidence and encourages its confidence that if it remains just as ruthless for long enough other West African governments will crack. Today, it is Ghana’s position that is in the balance. The Ghana IEPA is a Trojan horse. We demand the Ghana IEPA be suspended immediately and Government commits fully and unconditionally to the collective ECOWAS EPA process, including the immediate issue of the collective position on the scope of Market Access.

2. ECOWAS must take a collective stance which, among others, compensates non-LDC members like Ghana for the costs in extra tariffs that their exports to the EU market will attract if they abandon the IEPA. Credible estimates indicate that the three non-LDCs in West Africa will incur additional tariffs on their exports into EU of about €132million if they trade without an EPA. Ghana’s direct share of these losses will be about €37 million euro. The economy, total global trade and the livelihoods of the overwhelming majority of 25 million Ghanaians cannot be sacrificed for a paltry tax bill of 37 million euro. West Africa’s development and its future cannot be sold for 132 million euro. ECOWAS must immediately create a REGIONAL SOLIDARITY FUND to absorb these losses. Ghana must signal her complete commitment to promoting this Regional Solidarity Fund rather than its ‘national interest’ in the IEPA. It must also reject the attacks the EU is making on the ECOWAS levy in the EPA negotiations, as this is the kind of mechanism needed to create the solidarity fund.

3. Beyond the immediate threat of extra tariffs on exports to Europe from Cote d’Ivoire, Ghana and Nigeria (the non-LDC countries in ECOWAS), it must be made clear that ALL West African countries will incur massive fiscal losses from the EPAs. It is worth reminder that the 13 West African LDCs currently export everything but arms duty-free, quota-free to the EU market. But they are currently entitled to impose tariffs on all EU imports. Revenue from trade tariffs are the lifeblood for these and other least developed as well as vulnerable lower income developing countries. Ghana alone stands to lose $194 million (UNECA, 2005). Under the EPA even the LDCs have to grant EU imports free entry and lose the associated revenues from tariffs. This will be ‘in exchange’ for something they ALREADY HAVE (and have for free), i.e. duty-free quota-free access to EU markets for all exports apart from arms.

Further, the EU’s position on various aspects of the EPAs, e.g. standstill on introduction of new tariffs and taxes or increase in existing ones; restrictions on the use of export taxes and quantitative restrictions; the MFN, non-execution clause and others, collectively termed ‘contentious issues’ in the negotiations, will divert trade within West Africa as well as West African trade with other, non-EU countries and regions to their gain but to our loss. They will also undermine the Region’s efforts to industrialize and its ability to move up the industrial value chain. As a result, the region will remain a perpetual supplier of raw materials, with all the adverse implications that this entails. Any regional EPA must remove these EU impositions and narrow the scope of threat or damage to ECOWAS. Suspending Ghana’s IEPA and the provisions it contains on these issues will enhance ECOWAS ability to review and strengthen its collective positions.

1[4]. The EU’s demands and pressure in areas that go beyond tariffs and World Trade Organization (WTO) commitments – such as Financial Services, Public Procurement, Investment, Health, Raw Materials, Natural Resources and Intellectual Property – pose even greater threats and are of more strategic importance to Ghana’s (as well as West Africa’s) economic transformation, industrialization and overall development. In the case of Services, internal trade within West Africa is even bigger and more dynamic than trade in goods within the region. But West Africa is hardly in a position to export services to the EU. Officials claim that negotiating and including services (as well as the other WTO-plus, Trade-Related Issues like Procurement. Investment and Intellectual Property) will create a predictable environment for EU trade and investment in West Africa. We have already had increasingly free trade in goods with the EU and others for more than 30 years. There is one predictable outcome we already know – EU companies will dominate in these areas, our already low existing capacity will be weakened even further, including our foothold in the growth areas of trade in services and in manufactures within West Africa. Any EPA must be a goods-only agreement and must exclude Services and the so-called Trade related Issues.

5. While ECOWAS has bent over backwards to accommodate EU demands, her ‘partner’ remains inflexible, unyielding or worse. In fact the EU has consistently flouted and retracted on commitments it has previously made. A most telling example is in the area of EU responsibility to finance fiscal losses West African countries will incur as a result of entering into EPAs. Another is the subterfuge the EU has shown in respect of providing ADDITIONAL funding for the EPA Development Programme (or ‘PAPED’). The EU has watered down and reversed commitments and has engaged in patent falsehoods, recycling existing European Development Fund commitments as ‘new and additional funding’. By foul and other means the EU continues to show beyond all reasonable doubt that its interests in the EPAs have little or nothing to do with ECOWAS development or regional integration aspirations, but everything to do with securing preferential advantages in West African economies and markets against all comers – including our own domestic and regional producers and our development needs. ECOWAS must insist and secure binding and unequivocal EU compensation, adjustment and development commitments as a pre-condition for any EPA.

6. But Ghana and West Africa must also prioritize the diversification of their trade away from the EU, as well as our own developmental regionally integrated production capacities, investments and markets. The EU’s current economic crisis is partly due to the same unbridled liberalisation policies it is trying to impose on us through the EPAs. In Europe today, the corporate monopolies in the financial services sector in particular are holding all working people in Europe and whole economies to ransom. Meanwhile as current trends show, many more prospects exits for production partnerships, trade, investment and economic development with emerging regions in the global South. Locking in our entire trade, investment and development finance policies by giving EU privileges no one else has, not even our own companies and citizens, is not a forward looking policy. Today we are unable to share in windfall profits of mining companies because we locked ourselves into agreements that predictably provided all the guarantees and benefits for our ‘partners’. We are left with dwindling shares, missed opportunities, the destruction of livelihoods and of the very environment we live in! Our national and regional development plans and their integration must come first and determine the scope and content of any EPAs. The world is very different at the end of 2011 than it was at the beginning of 2002 when EPA negotiations began. The speed of change, including negative change is the key feature of economic fortunes. The entire ECOWAS leadership and the Government of Ghana must begin to lay down concrete alternatives to the EPA as they meet in Accra this week.

3.0 Conclusion

As Ghanaian organisations and citizens we call on the Government of Ghana to live up to the nation’s role and responsibility to ECOWAS and Africa’s unity and to our self-determination in charting and realising our developmental transformation. Thirty or so years of trade liberalisation has not brought us any closer to this. Rather it has brought collapse of industries, paralysis of agriculture and unprecedented mass unemployment and youth discontent in our societies.

Ghana must pull back from the brink of a unilateralism that will put another nail in the coffin of development in our country and in our region. It must suspend its bilateral EPA and fully and unconditionally return to the fold of the collective regional EPA process. Ghana cannot ride two horses at once. Two horses going in different and opposite direction will tear the rider apart and trample her underfoot.

Sister ECOWAS Trade Ministers and Governments must also play their part that we ride together towards the same destination and destiny for our collective mutual protection and benefit. The ECOWAS MMC must define a collective solution that addresses any losses that Ghana, Cote d’Ivoire and other countries will face in the absence of their interim EPAs. This is the most immediate means to consolidate ECOWAS in the EPA process and in our deep common interests that go way beyond extra taxes that we will have to pay on a very small proportion of our exports to Europe.

Accra, 28th November 2011. Signed by the ff Organizations:
GHANA TRADE UNION CONGRESS,
GHANA TRADE AND LIVELIHOODS COALITION,
ISODEC,
THIRD WORLD NETWORK-AFRICA,
ABIBIMAN FOUNDATION,
ACTION AID GHANA,
GAWU,
SEND FOUNDATION,
FOODSPAN
– all members of the ECONOMIC JUSTICE NETWORK OF GHANA (EJN)

h/t to E.K Bensah for bringing this to my attention:
Emmanuel.K.Bensah Jr.
Communications Officer (Web Journalist)
COMMUNICATIONS UNIT
Third World Network– Africa
9, Ollenu Street East Legon
P.O.Box AN 19452
Accra-Ghana

 

Chicken & Rice – Ghana, Africa, and EPAs

Chicken shaped coffin
The Ghana poultry industry may need this if the EU keeps dumping frozen chicken in Ghana

The European Union is dumping frozen chicken in Ghana, and the developed countries are dumping rice as well. The EU is also using EPAs (economic partnership agreements) that devastate African agriculture. Farmers throughout Africa find their livelihoods under assault. Farm products are highly subsidized in the developed world. And the developed world preaches to Africa about how you must have “open markets.” Africa opens its markets to Europe, which then dumps its subsidized excess on Africa, undercutting prices, and putting African farmers, who are not subsidized, out of business.

In Ghana:

“People don’t want to buy local chicken because the imported ones are much cheaper” . . . Poultry farmers cannot recover their investments.

. . . For the last few years, the Ghanaian market has been flooded with cheap imported chicken from the European Union and the United States. These are usually fatty chicken parts that come in packages without labels. Nonetheless, demand for local poultry has collapsed, threatening the livelihoods of over 1,000 poultry farmers in both small and large-scale poultry farming in Ghana. In 2002 alone, more than 26,000 tonnes (one tonne is roughly the same measurement as a US ton) of chicken was imported into the country, mostly from the European Union where farmers receive generous subsidies for their products. In 2004, that figure was estimated to be as high as 40,000 tonnes.

Ghana imports almost one third of the EU frozen chicken that goes to Africa.

. . . Ghana’s position was further made hopeless when the poultry industry lost the battle with government not to reduce tariff on imported poultry.

This was seen by most farmers (poultry and rice) as a reversal of the government’s plan and pledge in 2003 to increase tariffs on imported poultry products and rice to boost their production in the country. The European Union, the source of most of the imported chicken provides 43 billion euros to its farmers annually.

. . . the removal of import customs barriers for European products would in fact put in direct competition the products often highly subsidised of one of the economically most advanced regions with those of the producers of some of the poorest countries in the world. He said this could accelerate the collapse of the poultry industry in Ghana and in West Africa as well.

Rice farming is in the same predicament, and equally endangered.

The rice industry aptly epitomizes what open trade policy is doing to food security. Rice is a major food security crop providing cash incomes as well as food for the household, and therefore saving the local rice industry from collapse is paramount to ensuring food security for many households.
. . .

The removal of government subsidies and support have adversely affected the competitiveness of small farmers, and contributed to the unequal market situation whereby local Ghanaian farmers that received little state support have to compete with farmers and companies in developed countries that are heavily subsidized.
. . .
. . . increases in imported rice have diverted consumers away from local rice, with their preference shifting from the more nutritious local grains to the imported milled white rice.
. . .
The cheap imports of rice do not only undermine producers, processors and traders of local rice, but these imports also changed dietary preferences. They encourage consumers to buy imported rice instead of traditional foods such as yam, maize, plantain, cocoyam, etc. that are widely cultivated by female farmers.
. . .
It was in this regard that Civil Society Organisations that met in Accra earlier this month condemned the European Union for abusing the December deadline to put unjustifiable pressure on African governments to concede to its terms in the Economic Partnership Agreements.
. . .
They also cautioned African governments not to buy into the EU’s false claims. The CSOs from several African countries meeting in Accra, Ghana today re-stated that Africa has everything to lose and nothing to gain by signing EPAs with the European Union.

Dumping of rice in Ghana in the form of food aid has for long depressed the domestic price at the cost of Ghanaian rice growers.

Instead of EPAs, Ghana, and other African countries should adopt:

. . . the General System of Preference plus which will enable them to have access to EU market at levels similar to what they enjoy today, and this can even be improved.

“The EU claim that only the EPAs can guarantee this continued access is totally false”, said Tetteh Hormeku of Third World Network-Africa.

And other parts of Africa are suffering from the same EPAs:

. . . the hefty subsidies that European farmers receive while east African producers toil without government support. European products are therefore artificially cheap, and can be dumped on African markets while east African products are too costly to export.

. . .
Products regarded as sensitive are especially those from the agricultural and manufacturing sectors. The domestic market remains a critical outlet for Kenya’s mostly impoverished small-scale farmers. They are not able to compete against imported products or in export markets.
. . .
The Kenya Institute of Public Policy Research and Analysis (Kippra) has stated that unforeseen import surges can affect food security, livelihoods and rural development. Agriculture is the main employer and contributor to the gross domestic product (GDP) of low-income countries.

(In Kenya) agriculture contributes 16 percent of GDP and employs 75 percent of the workforce.

Western development “experts” have given consistently bad advice:

During the 1990s, when the international financial mantra was that governments should keep their hands off and let the free market work, many developing countries’ governments were told to stop negotiating prices and organising transport and marketing for thousands of small farmers. They did stop, but private substitutes for these services did not appear and thousands of little guys with limited access to market information, transport and credit were left to fend for themselves against large, sophisticated international buyers. And these farmers continue to compete with colleagues in developed countries who receive generous subsidies and whose home markets are protected by high tariffs.

This situation continues. Unless the governments in developing countries protect their agriculture, farms and jobs will be lost, and people will go hungry. This is also a major push out factor for workers in the developing world. Most people would rather stay in their own country if they can make a living there. But when you can’t make a living in one place, you’ll try and find a place where you can make a living. The alternative was voiced by a Zambian farmer-trade unionist . . . “If you will not pay us reasonable prices for our exports, we will export ourselves.”