Wednesday, April 7, 2010

European Protectionist Agreements

Recently, I expressed a sceptical view of the EU's proposed Economic Partnership Agreements (EPA) with African countries. I suggested that while the EU pretends such agreements are for the benefit of Africans, this is just a sham and that they are unashamedly beneficial to rich countries and detrimental to the development of poorer countries. The former president of Tanzania, Benjamin Mkapa, is in agreement with me, warning that EPAs are a form of neocolonialism. The EU have been quick, but unconvincing, in their denial of any underhand intentions.

Their response is unconvincing because they are effectively just offering more of the same. African countries will produce low value goods and raw materials, which the EU will buy for as little as possible. In return, the EU will sell African countries high value products that have been produced cheaply, in part, because of the low raw material costs. Sometimes, these high value goods will even be produced using badly paid Africans, which will further increase the profits for the EU. The EU assures African countries that they will be allowed to phase out some tariffs more slowly than others. But ultimately, the EPAs need to obey the strictures of the WTO (World Trade Organisation), where 'world' means 'rich countries, especially the US'.

While the EU is pumping out the woolly rhetoric about African countries removing barriers, they are piling up the barriers to make it more difficult for African products to reach the EU markets. It's the time honoured process of protecting their markets while accusing weaker economies of protecting theirs, a process particularly relished by the US and UK when it suits them, only to be replaced with a sanctimonious plea for free trade when the conditions are right.

Incidentally, a piece of particularly woolly rhetoric is the 'Agreement on Sanitary and Phytosanitary Measures', which you may need to read several times only to remain totally confused. The EU can insist on certain standards for food coming into the region that make exporting by African countries to the EU too expensive. According to these measures, that is not what is supposed to happen, but it effectively means that most African countries can't export to the EU. And the EU supports those exporting goods to African countries by methods that would be considered to be subsidies if they were implemented by Africans.

Even the private sector in Africa is suspicious of EPAs and they are the people who may be expected to have most interest in them. So if the private sector and other influential people are not about to be hoodwinked yet again by the protectionist West, perhaps there is hope that African countries will have some influence on other trade issues that have, so far, kept most of them underdeveloped.


No comments: