Why we should tear up the EPA.... Eventually

 

Why we should tear up the EPA…… eventually

The Economic Partnership Agreement, a free trade agreement between the European Union and six SADC countries has finally been signed last Friday by in Kasane in Botswana. Six similar EPAs are being negotiated or have been singed amongst many of 76 members of the African Caribbean and Pacific group of nations. That is both the good and the bad news. It is good news for our farmers who export their beef and grapes and the fishers who export fish to the EU. It will mean that they will be able to sell duty free into Europe’s 26 members.It is also good news for everyone else who exports goods like steel and automobiles to the European Union because after ten years of tough negotiations Namibian exporters are able to export whatever they want to Europe without paying any duty. Unfortunately we have no steel and automobile industries but South Africa does and South Africa is by far the biggest beneficiary of a trade agreement that originally it was not even supposed to sign.

What Namibia got was a continuation of the status quo in terms of the access of our exports to Europe. We can continue to export everything we make duty free. But we had that before the EPA, you say so what extra did we get? The answer is almost nothing. The Europeans know it and those who signed on Namibia’s behalf almost certainly know it. They will trot out the benefits in improvement in rules but everyone knows that almost nothing was gained and it is unlikely that our limited range of exports will not increase one dollar as a result of the EPA agreement.

The bad news is what we had to pay a great deal to get nothing. For years the government of Namibia had quite rightly been one of the strongest opponents of the EPA. The reason was simple. Not only does Namibia now have to eliminate all its tariffs on goods from the EU which would make it even harder to compete with EU exporters it also has to comply  a whole new range of EU  provisions that are anti-developmental. What are these provisions? They include things like limitation on Namibia’s right to introduce new export taxes and the use of infant industry provisions which protect new industries.  The grand daddyof all conditions in the EPA is the so-called ‘most favoured nation’ provisions whereby Namibia and the SADC countries must grant to Europe whatever they might negotiate with large economies like Brazil or India. This is the so-called ‘’we shall never negotiate again provision”’ because it means that the EU can free ride on the back of other negotiations without having negotiate yet another treaty with small African states.

Europe is simply trying to stop Africa from using the very same laws and taxes that they used to develop for almost a hundred years ago. You may ask what sort of people are these to tell a sovereign nation what its laws and export taxes must be? If you listen to the European negotiators it is being done for development according to the European negotiators who say that all these rules that they used in the past are bad for us and we should not have access to them. That is good reason- the real reason is that it is good for Europe because it helps consolidate EU exports and maintain their access to our raw materials and stops us from trying to process them here.

Many think those who negotiated the treaty for Africa to be at very best,fools and some would use stronger words. But in fact the African negotiators have done much better than the Caribbean and Pacific negotiators who signed their own EPA in 2007. They gave up everything,  export taxes MFN and infant industry because they were true believers in the free market in the case of the Caribbean. Unfortunately their heads of government were not and they sacked them all and closed the Caribbean Regional negotiating machinery. In SADC the negotiations resulted in clear limitations on what we can do  but not the sort of outright bans that the Caribbean or the Pacific foolishly agreed to. In future we shall have to ask Brussels for permission to pass new export tax laws and they may not agree.

Fortunately  MinisterSchletwein has been cleverin dealing with the EPA. He recently  mooted export tax laws of 2% of the value of mineral exports  which will be introduced presumablybefore the treaty with the EU has to be ratified in October. The provisions of the EPA limit Namibia’s ability  to introduce new export taxes but they allow us to maintain old export taxes. In the long run the treaty mean that we will give Europe what  will effectively be able to effectively veto over our commercial laws.

So who benefits  from all of this. Swaziland keeps sugar access, Lesotho improves slightly the terms of its garment exports and we, along with Botswana get to keep our beef exports to Europe. But the world is as it always was,  and the big winner is of course the biggest country- South Africa which cleverly used its small neighbours to get better access for its wine and sugar, which is what Pretoria always wanted.

Ironically the biggest loser is not Africa but Europe because it has given Africa yet another reason to despise what they have done on this continent. Before when Europe was more generous during the days of the Lome Convention and the Cotonou Agreement  ie before the EU felt hreatened by the three-headed hydra of Indian service exports, Chinese manufactures and Brazilian agriculture we had generous trade arrangements.

The Chinese are much more clever than Brussels. They come with no repulsive treaty but with what Africa so desperately needs- investment and aid that is commercially oriented. This is precisely what Europe did in the beginning of the post-colonial era under the Lome and CotonouAgreements in the 1970’s but has since given up. The Chinese are now doing it bigger and better.

ThisEPA  is an odioustreaty that we will have to sign and ratify to protect our export sectors but there will come a day when Europe is no longer relevant to Africa’s future and we will be able to tear up this dreadful treaty which aims to determine our economic future as surely as European machine guns did 100 years ago.

These are the views of Professor Roman Grynberg and not necessarily those of his employer. The writer was, much to his subsequent shame and regret,  an EPA negotiator for the Pacific Islands.