Stop the European Union from arm-twisting Africa

Saturday October 29 2011

Mukhisa Kituyi. Photo/FILE

Mukhisa Kituyi. Photo/FILE 

By MUKHISA KITUYI

On September 30, the European Commission decided to amend Market Access Regulations which were put in place at the end of 2007 when Economic Partnership Agreement (EPAs) negotiations between EU and 36 ACP countries were concluded.

These regulations primarily allowed the 36 countries to continue having duty-free quota-free access to the EU market after the expiry of the Cotonou Agreement, while waiting to sign and ratify the EPAs.

The amendment announced in Brussels is that 18 countries which have not moved to sign or ratify the EPAs (all of them from sub-Saharan Africa except Fiji and Haiti) will now be removed from the bridging facility.

Once removed, those countries will, with effect from January 1, 2014, cease to access EU markets without paying duty. If they sign up in the future, they can be considered for re-admission.

While countries which are LDCs like Rwanda, Burundi, Uganda and Tanzania will feel no immediate pinch since they are guaranteed free market access under the regime called Anything But Arms, products from Kenya will immediately be subject to new taxes projected at 43.8 million Euros or Sh6.132 billion in the year 2014 alone.

This unilateral action by the European Commission represents not only a reversal on key promises made in the early phase of negotiating EPAs, but also displays a contemptuous approach to the negotiations that have particularly come to light under the new EU Trade Commissioner, Mr De Gucht.

Africa has a credible story to tell. At the 2007 AU/Africa Summit in Lisbon, and again at the Tripoli Summit last year, key factors have been brought out which need sorting out.

The EPA negotiations were launched ostensibly to make the EU/ACP compact WTO-compliant. But a clear assumption at the time was that the Doha Round would be completed in due course to give greater flexibility to developing countries on using trade for national development.

Since Doha Round negotiations have collapsed, there is no consensus as to what compliance with WTO really means.

Africa continues to have genuine concerns about the EU position on rules of origin that need ironing out before ratifying the EPAs.

EU has pushed for immediate removal of export tax which some countries consider necessary for residual stabilisation of public revenues.

EU is calling for at least 80 per cent exposure of African markets to EU products on preferential terms rising quickly to 100 per cent.

Similarly, EU demands that all preferences accorded other countries, even developing ones, must be given to EU as well.

These demands will raise counter-pressure from other preference-giving schemes such as Agoa and the Sino-Africa Conference on Trade and Development.

Since the launch of EPA negotiations, the architecture of Africa’s regional economic integration has changed dramatically.

Some regions are creating common markets, others are harvesting customs unions, the EAC, SADC and COMESA have agreed to launch a tripartite FTA. AU is leading a bold move for a continent-wide FTA.

These initiatives cross the borders of EPA configuration. Any act of arbitrary market closure will reverse this impetus towards Africa’s economic integration.

At the start of the negotiations, EU promised to encourage regional integration by giving LDC-like market access rights to non-LDC countries in regional groups whose members are predominantly LDC.

The threat given to countries like Kenya by the new regulations represents a total abrogation on that promise. Europe has decided to act deaf.

African governments have a duty to counter this hostile act of the EU Commission. First, no country should be sucked into a hasty response by this divide- and-rule tactic.

The affected countries must consult and take a collective position in dealing with the situation. The specific issues on the table that delayed ratification of the partnership agreements are still real.

International solidarity is necessary to disabuse EU of this tactic coached in mild language but geared towards armtwisting weak economies which over the years had bought into the assumption that they had a historical relation with Europe which would encourage mutual respect and sensitivity in working out a regime to succeed Cotonou.

Dr Kituyi is a director of the Kenya Institute of Governance [email protected]