Was Cariforum wise in rushing into a 'full' EPA?

By Norman Girvan

Friday 29 October 2010 – Recent news on the stalemate in the EPA negotiations in Southern Africa raises fresh questions about the wisdom of Cariforum countries in rushing to sign on to a ‘Full’ EPA with Europe in October 2008. 

According to an article in one of the region’s leading newspapers the EPA negotiations with SADC—the Southern Africa Development Community—are unlikely to meet the latest deadline for conclusion at the end of 2010. (“EU trade deal unlikely in 2010” by Felix Njini ; 22-10-2010 http://www.southerntimesafrica.com/article.php?title=EU_trade_deal_unlikely_in_2010&id=5059)

That will make three years since the expiry of the original deadline of December 31, 2007 for conclusion of a trade agreement to take the place of the Lome/Cotonou arrangements. We in the Caribbean had been told that this deadline was cast in stone.

One of the main sticking points in the EU-SADC negotiations is EU insistence that “new generation issues” be included in the EPA, even though this is not required under WTO rules. New generation issues include investment, government procurement, competition policy and expansion of intellectual property rights and of trade in services. 

The article quotes Namibia’s Director of International Trade as saying that “if we agree to EU demands on new generation issues we would be opening up our economies to very serious problems”. Two major concerns mentioned are the restriction of the right of SADC nations to pursue their own development strategies and the undermining of their regional integration schemes.

A Communiqué from an EPA Workshop of African Trade Unions and the International Trade Union Confederation (ITUC) explains these issues in some detail. African development and transformation should be anchored on agrarian reform and industrialisation, supported by regional integration and South-South cooperation. The present design of the EPAs is not consonant with this strategy.  (Communique of ITUC-African Trade Unions Seminar on EPAs September 2010)

Inclusion of new generation issues was one of the controversial features of the Caribbean’s EPA. Critics had argued that more time was needed to consider the implications for development and regional integration.     

SADC has apparently also forced the EU to concede ground on its demands for a ‘Most Favoured Nation (MFN) Clause’ whose effect would be to hinder South-South cooperation. The MFN clause was bitterly opposed by Cariforum, but the position of European negotiators was ‘take it or leave it’. 

Now it seems the Caribbean might have won that battle had they made common cause with the Africans.   

Cariforum negotiators have always argued that being the first to conclude a ‘Full’ EPA with Europe would be an advantage in securing additional development assistance and enhanced access to EU service markets.  

It is an open secret however, that implementation of the EPA by most Cariforum countries is well behind schedule because of the onerous legislative, regulatory and administrative obligations and the limited financial means of many countries.

Nearly three years after the conclusion of negotiations, some reassessment of the Caribbean strategy now seems to be necessary; comparing the recent Caribbean and African experiences. 

In addition, the fall-out from the global economic crisis has devastated the financial resources of EU states, which must impact their aid budgets.  

And how accessible will European service markets really be, with slow economic recovery and rising unemployment in Europe?

The opinions expressed in this commentary are solely those of Norman Girvan. Norman Girvan is Professorial Research Fellow at the UWI Graduate Institute of International Relations at the University of the West Indies in St. Augustine, Trinidad and Tobago.

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