2001
The Cotonou Agreement
Tetteh Hormeku; Kingsley Ofei-Nkansah
Third World Network-Africa
The Cotonou Agreement between the European Union (EU) and the African, Caribbean and Pacific (ACP) countries will impede efforts at strengthening South-South economic collaboration. In the particular case of Africa it will decisively undermine the strategy for continent-wide collaboration for economic development and leave the decades old Africa in place. Despite a large dose of rhetoric about food security, the Agreement, successor to the Lomé Convention, is likely to reinforce the structural impediments to food security in the ACP countries.
Two
broad elements of the ACP-EU agreement signed in February 2000 are key to
long-term efforts to integrate economic development of ACP countries. The first
concerns the new framework of economic interaction between ACP countries and
Europe; the second relates to
provisions on the terms of access of European investors, businesses and products
to ACP economies. If enacted by the ACP, these stipulations will remove the
policy instruments these countries have put in place for a balanced development
of their economies both individually and in relation to each other.
New framework regroups
countries, separates weakest
Under
part three of the new agreement, the parties agree to start negotiations in the
year 2002 for the purposes of what is called "economic partnership
agreements" (EPAs) to come into effect by 2008. From then on, in its
dealings with Europe, the ACP group as it exists will cease to have any
importance as far as trade relations with Europe is concerned.
The
Lomé Agreement was a general trade and aid agreement applicable to all
participating ACP countries. Under the post-Lomé IV regime, Europe will be
establishing differential relationships with these countries. Three broad
country categories are envisaged: (a)
least developed country (LDC) members of the ACP group; (b) non-LDC who feel
able and ready to enter into EPA regime, and (c) and non-LDCs who do not feel
able/ready to enter into the EPA regime.
Each
category will entail a different trade relationship with EU. The LDCs, which are
supposed to the poorest of the poor, will continue to enjoy non-reciprocal trade
preferences for their products in the EU markets. In addition, the agreement
commits the parties to a process that, by 2005, will allow duty-free access in
EU markets for essentially all products from the LDCs. The EU vigorously
defended the phrase, “essentially all”, as opposed to “all” products.
This phrase represents a formula by which the EU can keep out ACP products that
compete with EU products. These products may, however, be in areas where ACP
countries need access to EU markets the most.
For
non-LDC countries that are not able to enter into a partnership agreement with
the EU, the EU will, after assessing their situation in the year 2004, provide
them with a "new framework for trade, which is equivalent" to what
they have now, but in full conformity with the rules of the World Trade
Organisation (WTO). This means, basically, that such countries will lose the
specific preferential status they had under the Lomé Conventions. Whatever
preferential access remains will be that which the EU grants generally to all
developing countries.
Non-LDCs
that are willing and able to enter into the EPA regime will then do so.
The main content of these relationships will be the reciprocal removal of
barriers to trade between the parties. That is to say, each party—the EU and
the respective ACP economy—will grant equivalent access in their respective
markets to products from the other party.
Countries
in the three categories do not necessarily have to negotiate with the EU as a
group. This applies particularly to the non-LDCs. Countries can decide
individually whether or not they are willing and able to enter into EPAs or
other forms of equivalent arrangements. But even for those who do want to enter
into an agreement, it is doubtful whether the agreement will be based on their
own developmental needs relevant to their own stage of development.
Implications for African
integration
African
countries are by far the biggest bloc in the 71-country ACP grouping. The
implications of the Cotonou Agreement for the continent's integration agenda are
sharply illustrative.
The
process to date of African efforts at economic integration, whether at the
continental or regional levels, has drawn its rationale from the particular
weaknesses inherent in their economies. Most of these economies are too small to
be viable on their own. Of equal importance, the internal production,
distribution, and other structures of these economies are unrelated to each
other. This internal fragmentation is replicated at the continental level, where
most countries export similar agricultural crops to (typically European)
markets.
Therefore,
the concern with economic integration, as elaborated for instance in the Lagos
Plan of Action (LPA) and later the Abuja Treaty, is to relate these economies to
each other to widen the markets for products and also to link raw materials,
capital and other factors of production to each other. Equally important is to
ensure an equitable balance so that some countries, especially the small ones,
do not lose out.
Given
the obvious difficulty of bringing such diverse economies and traditions
together, it is understandable that the strategy of the LPA and Abuja treaty is
to encourage the existing regional economic groupings such as the Economic
Community of West African States (ECOWAS) and the Southern African Development
Community (SADC) to serve as the building blocks for the gradual achievement of
continent-wide co-ordination of African economies.
Europe has different
priorities
The
European Union has different priorities. African economies have always served a
particular function for Europe, as sources of raw materials and markets for
their products. Today, European policy-makers no longer need the broad grouping
of African (as well as Caribbean and Pacific) countries to meet these needs.
In
part, this is because Europe is no longer dependent on African raw materials. In
part, the sustained collapse of most African economies means that income levels
in most of these countries do not make them effective markets for Europe's
industrial goods. Europe's target markets are the so-called high-performing
economies, in and outside Africa, and for these it is in competition with other
industrial countries such as the United States and Japan.
The
proposed free trade agreements with these selected economies address its
competitive need to secure these target markets (with the added advantage of
dispensing with the administrative and financial burden of the former bigger
groupings). Barely a month after concluding the new partnership agreement with
the African, Caribbean and Pacific (ACP) countries in February 2000, the
European Union concluded a free trade agreement with Mexico, a country which is
already part of a free trade area with the United States and Canada.
Not
only will these arrangements reinforce the distinctions in economic fortune
among African countries, as the less successful economies are hived from the
more successful and encouraged to deal with Europe, their main market, in
separate ways. The whole point of economic co-operation arrangements, which
group stronger and weaker economies together so that they may reinforce each
other in the removal of structural imbalances, is reversed.
In
addition, for the more successful countries, the nature of the
trade-relationship envisaged—reciprocal free trade—is one that cannot be
available to other African countries. Thus a privileged relationship is
established between the EU and the successful African economies, which isolates
the more successful economies from the less successful ones.
Finally,
the new Cotonou Agreement encourages the African countries to form themselves
into groupings other than the existing, more or less geographically
"natural" ones, for their dealings with the EU. In the run up to the
negotiations, there was already support in EU documentation for the
strengthening of the Economic and Monetary Union of West Africa (UEMOA) at the
expense of ECOWAS.
Apart
from the fragmentation of existing African economic organisations, the new
agreement between EU and the ACP undermines the prospects of regional
integration in another way. This relates to provisions by which the parties will
seek to regulate the access to, and operations of, economic agents—e.g.
investors—in each other's economies. Key among these rules are those relating
to intellectual property protection, competition policy, and rights for the
protection of foreign investors.
Inconsistent with African
positions on WTO rules
As
far as intellectual property is concerned, the provisions of the new agreement
commit the parties to full compliance with the rules of the Trade Related
Intellectual Property Rights (TRIPs) agreement
of the World Trade Organisation.
This
is in stark contrast to the demands of most of the South. Ever since that WTO
agreement was signed, developing country governments have been protesting
against its unfair terms, which entrench the monopoly of transnational
corporations over technology, undermine measures to promote the transfer and
adaptation of technology by developing countries to suit their needs, and open
up traditional knowledge about medicine and other areas to piracy by European
and other Western corporations. In fact, at the time of the negotiations for the
new partnership agreements, African countries have tabled the most comprehensive
proposals for the review of the TRIPs in the WTO, with the support of most other
developing countries.
With
regard to competition policy, the provisions appear to be concerned with
preventing market abuse. Yet the language referring to “market access” and
“business-friendly environment” suggests that Europeans are pursuing here
the same aim they have been pursuing in the context of the WTO without much
success. They want to commit ACP governments to giving the same, and in some
cases better, access to European companies than to their own national companies,
especially in strategic areas such as privatisation of state enterprises.
In
the case of investment protection, the provisions envisage among other things
that the parties will adopt "general principles on the protection and
promotion of investments, which will endorse the best results agreed in the
competent international fora or bilaterally." This basically refers to
adopting standards for the promotion and protection of foreign investment that
Europe has been promoting for multilateral adoption in the failed MAI and in the
WTO. Again, ACP governments have opposed such provisions, which, in the new
post-Lomé agreement, seek to entrench protections for European investors in ACP
countries. These provisions will remove the ability of ACP governments to use
trade and investment policies to adjust structural imbalances in their economies
and promote integrated development, at national and continental levels.
Food security
Food
security is a long-standing concern of most ACP countries. The new ACP-EU
Partnership Agreement offers a large dose of rhetorical principle without
addressing the decades-old structural impediments to food security in the ACP
countries.
The
Partnership Agreement articulates laudable objectives of reducing and eventually
eradicating poverty that are consistent with the objectives of sustainable
development and the gradual integration of the ACP countries into the world
economy. By espousing the laudable principles of partnership and ownership of
development strategies, participation, dialogue and the fulfilment of mutual
obligations, the Agreement puts the responsibility for development squarely on
the ACP states.
The
principal strategy for promoting food security is the provision of export
refunds as contained in the Agreement's Article 54 on Food Security. This is
nothing more than a palliative and suggests a non-commitment to addressing the
realities of food insecurity on the ground.
Under
the Lomé IV Convention, STABEX and SYSMIN were principal instruments for export
revenue stabilisation. Notwithstanding their limitations, they were important
for ACP countries, which are heavily dependent on agricultural export earnings.
They have been dismantled under the new Agreement and replaced with a system
that seeks to provide financial support to ACP countries that experience dips in
foreign exchange earnings.
The
new system is less transparent and has weaker criteria for operationalisation.
Access to support would depend on the extent to which the dip in export revenue
bears a relationship to decline in agricultural export earnings. Besides,
compensation for the shortfall merely covers the nominal decline in the export
earnings without compensation for increases in the cost of needed imports. Even
before the conclusion of the Agreement, the European Parliament had expressed
its wish to revise STABEX and SYSMIN and give "greater priority for food
self-sufficiency as a key element in the selection of projects".
The
post Lomé Agreement provides for a wider range of investment support. This
could mean a dearth of investments for food production given the unfavourable
macro-economic environment for food production and the relatively lower returns
and risks associated with agriculture in general.
Discernible
hope for food security may lie in the Agreement's provision on gender. Given the
preponderance of women in food production in the ACP countries, the Agreement
seeks to improve food security by creating a framework for enhanced access of
women to productive resources such as land and credit. This is, however,
inconsistent with massive infrastructural support for ACP agriculture that
favours male-dominated cash crop production for exports. Besides, adjustment
support for diversification has so far meant diversification into the production
and export of more cash crops and primary commodities, thus leaving the ACP
states to import manufactured products and food for domestic consumption.
ACP
states are mostly dependent on the production and export of primary products for
the sustenance of their economies. The majority of people, particularly women,
lives and works in rural areas with subsistence food production as their main
means of livelihood. ACP dependence on primary commodity export for over 50% of
foreign exchange earnings has historically been its bane, given the wide
fluctuations in the revenue generation of these commodities. Besides, there is
the inherent and growing imbalance in the terms of trade between the primary
commodities of the ACP states and imported manufactured products. Food imports
have doubled in the last three decades, yet foreign exchange earnings have
declined. This puts into question a food security strategy that seeks to meet
domestic food needs by earning hard currency through exports.
There
can be no meaningful progress toward food security in the ACP countries as long
as northern partners hold on to a Common Agricultural Policy (CAP) that employs
expensive and wasteful protectionist instruments and mechanisms that are
detrimental to agricultural and food production in the ACP countries.
Farm subsidies in Europe
depress food production in South
The
reiteration of commitment to WTO obligations in the new agreement means a
commitment to an Agreement on Agriculture (AOA) that weighs heavily against food
security in the ACP countries. The current AOA allows developed countries to
provide a multiplicity of domestic support and export subsidies that depress
food production in the South. Meanwhile developing countries' domestic support
for small farmers has systematically been dismantled by the World bank/IMF over
the last two decades. They are now in practice debarred from applying support
measures even in relation to food production. For countries whose foreign
exchange situation grows worse by the year this restriction stands in sharp
opposition to the quest for food security. Another iniquity that cries out in
this context is that subsidies prohibited in developing countries are largely
prevalent in the EU.
The
recent acceptance in principle of the multi-functionality of agriculture gives
added credence to the need to protect smallholdings and family household
farming. Meanwhile, the EU continues to promote the destruction of small farmers
at home and rural producers abroad through its massive export subsidies. This
injustice has been forcefully articulated by the Geneva-based International
Union of Food (IUF).
The
restrictive environment of the WTO goes beyond the AOA. The ACP-EU partnership
agreement commits the parties to adhere to international agreements on TRIPs.
This flies in the face of the far-reaching demands of countries of the South for
the reform of TRIPs. TRIPs threatens food security directly because it
effectively seeks to make rural producers dependent on multinational
corporations for seeds to grow food for their own consumption.
It
is from this perspective that we should view the otherwise laudable principle of
partnership based on mutual respect for sovereignty. Placing full responsibility
on the ACP countries for their own development is nothing more than an attempt
by the EU to disclaim responsibility that rests squarely on the EU.
The
unrealistic timeframe of eight years for dismantling the non-preferential trade
arrangements and moving toward WTO compatibility will also affect food security,
since it is impossible for the ACP countries to adjust to playing ball in the
globalised market in this period. The Economic Partnership Agreements (EPA)
envisaged for regionally integrated economies of the ACP at the end of that
timeframe also runs counter to food security concerns. ACP countries that depend
on primary agricultural production will derive minimum gains from regional
integration that is structured to meet the raw material needs of Europe.
Conclusion
Recognition
of the declining terms of trade and growing food insecurity associated with ever
worsening balance of payment difficulties has informed the quest for food
security. Some would rely on a strategy of increasing earnings to purchase food
at more competitive prices. This, however, ignores the fact that most of the
populations of the ACP countries are agrarian and produce largely for their own
subsistence. Nor does it recognise the ever more severe foreign exchange
constraints of ACP countries, meaning they cannot rely on a concept of food
security that is strategically linked to a reliance on cheaper food imports.
As
far back as November 1997, the first Summit of ACP Heads of States and
Government in Libreville, Gabon, noted in particular the need to "develop
food production so as to ensure food security for the populations". At the
first ACP Civil Society Organisation Forum in November 1999 in Douala, Cameroon,
there was an unequivocal declaration for food security as a priority issue in
ACP-EU development cooperation. The Douala Declaration underscored the threat of
recurrent hunger and famine, particularly among women, children, ethnic minority
and other marginalised groups. It called for policies that promote domestic food
production in particular. It also called for the promotion of coherent
agricultural policies within the post Lomé and WTO frameworks, emphasising in
particular food production, which is the mainstay of marginalised rural poor.
There
are still those who envisage favourable outcomes for food security given the
available space for elaborating compendium of texts to the Agreement and the
much-touted provisions for the participation of labour organisations, civil
society organisations (CSOs) and other non-state actors. The fact that the EU
managed to bulldoze its objectives throughout the negotiations, however, is
evidence of the inherent imbalance in the so-called partnership and a pointer to
the high likelihood of EU railroading issues to its advantage. This ominous
likelihood should be seen in the context of an EU that is under pressure from
within to reform CAP.
The
enhanced positions for the participation of civil society organisations as
partners in the implementation of the Post-Lomé IV Agreement offers hope only
to the extent that civil society organisations redefine their participatory role
in favour of policy advocacy and build credible alliances between civil society
organisations in ACP and EU countries. CSOs should see their role as removing
distortions and imbalances that are structurally detrimental to production,
especially of food for domestic consumption, in the ACP countries.
This
advocacy role should seek to remove protectionist measures within the framework
of CAP to the extent that those measures depress domestic food production in ACP
countries. It should also seek real commitment to diversification away from
primary commodity production. It is the redefinition and reinforcement of CSO
roles as partners that could help reduce the integrity gap between the new
agreement and the real structural impediments to economic development in ACP
countries.
|
