SO much has been said about the Economic Partnership Agreement (EPAs), with some of its intended objectives aiming at enhancing trade and provision of full market access and free trade market reciprocity arrangement, but clear evidence of disintegration among the ACP countries has started to emerge.
Meanwhile, United States assistant Trade representative Florizelle Liser (right) has advised the government to address supply-side constraints to get full benefits of trade with that country.
Recent happenings are showing that the free trade- EPAs would not bring development to the 77 former European colonies known as the African, Caribbean and Pacific (ACP) which has been divided into six groupings for the purpose of negotiating the EPAs.
Over the past few months, pressure in the negotiations of the EPA with the European Union has pushed three regional economic groupings in Africa on the verge of disintegration instead of enhancing integration and unity.
Last month in Mauritius, four of the 11 Eastern and Southern African (ESA) countries signed interim EPAs and in June 2009, four out of the 12 SADC countries also signed interim EPAs in Brussels, Belgium. In the ECOWAS grouping, Cote d'Ivoire had already signed and reports indicate that Ghana was about to sign.
Over a week ago, Malawian President Bingu wa Mutharika stated that his country would not be part of the EPAs in their current format since the intention of Europe was to divide Africa.
"EPAs are a divide and rule tactic being advanced by Europe for selfish interests and Malawi will not sign until all concerns are addressed and know all these manoeuvres since I was among the pioneers of regional integration," stated President Mutharika, who is former COMESA secretary general.
All these developments indicate that the EPAs would undermine African regional groupings' attempts to have a common agreement with Europe that would meet the differential development levels and needs of various countries.
The failure to have a common agreement would certainly affect regional integration especially the planned merger of COMESA, SADC and EAC into a single customs union under the Kampala tripartite agreement.
However, in the midst of tensions, fears and perceived negative impacts of the EPAs, ESA configuration chairperson and Zambia's Minister of Commerce, Trade and Industry Felix Mutati is optimistic regional integration would be enhanced before signing a full EPA.
Mutati said the development dimension must come first before market access, saying that was now the basis of the negotiations under the EPAs that would be signed soon with the European Union.
He said the ESA region was not using time factor as a pressure point to attract member countries to sign interim EPAs.
"Time is running out as per our commitment in Mauritius but there are still differences in perspectives hence the need for patience and if we rush to sign we may not get the outcome we want and we don't want to use time as pressure point especially when dealing with sovereign states because countries are also consulting their citizens and this processes takes time," Mutati said. "And this is why we want to engage Malawi to find out what fears they have and what can be done to address the challenges, after engaging Malawi hopefully by next week that is when we shall meet the EU and set a time frame to sign interim EPA."
He said following the Mauritius meeting where only four ESA countries signed interim EPAs, there had been attempts to narrow differences and challenges among those countries that did not sign.
"As chair, Zambia is supposed to coordinate and we shall base our negotiation on development as first priority and market access will be second because we have things to consider such as infrastructure to address challenges of competitiveness and supply side constraints," said Mutati.
Despite the optimism from Mutati, it is clear, according to fair trade campaigners, that EPAs would not bring development especially that they are based on a flawed neo-liberal macroeconomic theory which does not take into account unequal power relations between rich and poor countries.
Initially the ESA region was designed to involve Eastern and Southern African countries, but some countries broke away to start negotiating EPAs under East African Community (EAC), SADC and ESA.
It is therefore noted that with these differences, EPAs would only result in disintegration and not regional integration.
And during the Centre for Trade Policy and Development organised ESA-EPA regional strategy meeting in Lusaka last week, commerce permanent secretary Buleti Nsemukila said regional stability was needed especially that the region was mixed with each country having its own specific characteristics.
He said these characteristics ranged from different level factors affecting private sector, different access to overseas markets and different sizes of the domestic markets.
"These differences need not be seen as a constraint but rather as an opportunity to integrate our economies to exploit the strengths of one country to address weaknesses of another one, to pool resources together and knowledge, people and businesses," said Nsemukila.
And Action Aid Zambia Country representative Lucy Muyoyeta challenged African governments to ensure that EPAs did not undermine the continent's trade and development agenda.
"EPAs must address people's priorities and seek to restore the dignity of the people of Africa, particularly the vulnerable and excluded," said Muyoyeta.
From the regional integration perspective, EPAs have presented greater challenges to Africa's efforts towards achieving strong and effective regional economic groups because the EPAs are seen as an additional layer of complexity to the already unstable and fragile regional blocs existing within the continent.
Several African countries, including Zambia, are facing the complexity of multiple memberships to more than one regional economic bloc and as such the EPA configurations only served to cause more confusion and complexity to the regional integration agenda.
Fair trade campaigners say if EPAs were genuinely promoting regional integration as proponents (EU and some ACP government officials) claim to be, achievement of regional integration process should have been a prerequisite to EPA negotiations and conclusion.
The signing of EPAs by individual countries or specific sub groupings within ESA, SADC or ECOWAS will establish multiple and different trade regimes that would eventually undermine current regional integration agendas.
And Liser, in an interview last week, said the challenges facing Zambia were not different from what other countries were going through.
"But there are things that the Zambian government can do and mainly is to address supply side constraints since it is like a door is open for products to come in but goods cannot enter because they are insufficiently produced in required quantities or cannot meet standards necessary in the US market, so Zambia should also bring down the cost of doing business and as a landlocked country transport costs need to be addressed," Liser said. "Even in the area of telecommunications some people cannot access information through their mobile phones and if you are an investor and failing to communicate with your company back at home then you start thinking…oh let us invest elsewhere in the region since the cost of phone service is also high."
Despite the US government offering duty free and quota free market access in exporting over 600 goods to that market under the Africa Growth and Opportunities Act (AGOA), Zambia is among the countries that are still struggling to reap maximum benefits from the opportunity.
AGOA was structured to encourage value added products onto the US market since value addition to raw materials is aimed at creating jobs and attracting investors.
But only four vegetable products out of 10 which Zambia requested for a pest risk assessment had been approved by the US government's department of agriculture for export into that market under AGOA.
And despite the full risk assessment that was conducted, Zambia has not exported anything to the US market.
Liser suggested that government should also work in partnership with the private sector if desirable results were to be attained.
"It is not governments that need trade, it is the private sector which wants business through trading opportunities and as governments we need to establish the right environment where the business community will be confident to operate in," Liser said. "So Zambia shouldn't backslide on some of the important things that have been attained in areas of governance and fighting corruption but also these need to be strengthened because business thrives in an environment where the rule of law is followed."
She said the annual AGOA eligibility process was now underway and various legislative proposals were being considered that might affect AGOA.
And Liser said least developed countries (LDCs) such as Zambia should take action and embrace reforms that will help prepare the countries for post-Doha Round since elimination of subsidies by the US government and other developed nations alone will not solve the problems faced by poor countries.
Commenting on the forthcoming World Trade Organisation (WTO) seventh ministerial forum in Switzerland, Liser said the meeting would offer an opportunity for people to come together and conclude the Doha Round that would benefit all countries, especially African ones.
"If African countries can add value and not only exporting commodities, we are hoping Africa will push for an ambitious outcome in the Doha Round that can result in value addition and reduction exportation of commodities and we are committed to reduce subsidies and other big players should also do the same," said Liser. "Eliminating subsidies alone will not solve all problems faced by LDCs and I strongly suggest LCDs should make reforms in reducing cost of doing business and position themselves to take full advantage of the Doha round, elimination of subsidies, market access and they should prepare for a post-Doha environment where everybody will be competitive and trading freely. Actually it will be very important for LDCs to take action and not just wait for action from our side."
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