30 Jun 2014

Trade union of the poor versus club of the rich

Written by  Adekeye Adebajo

No. 302: Trade union of the poor versus club of the rich / Adekeye Adebajo / Business Day
30 June 2014

The 79-member African, Caribbean and Pacific (ACP) Group — to which South Africa belongs — recently celebrated its founding in Brussels. The group was established in 1975 with nonreciprocal access to the market of the then European Economic Community — now the 28-member European Union (EU). The Lomé Convention of 1975, which established the ACP-EU relationship, was about Europe's quest for a secure source of energy and minerals, following the "oil crisis" of two years earlier.

The accord has largely failed to diversify ACP exports and to promote industrialisation, amidst ferocious battles over sugar, rum, bananas and food mountains. By the early 1990s, ACP states were losing market share to Southeast Asian and Latin American exporters entering "Fortress Europe". More than half of ACP mono-crop economies remain among the poorest countries in the world, continuing to depend on the EU as an export market, even as the "club of the rich" remains in the throes of a serious financial crisis. The 2000 Cotonou Agreement safeguarded the ACP's nonreciprocity, but added a new clause on political dialogue.

The EU will, however, almost certainly pursue separate relationships with each of the ACP regions after the Cotonou Agreement expires in 2020. Brussels appears to be losing interest in the Caribbean and the Pacific, while Africa remains largely a source of economic and security interests in search of minerals and "mad mullahs". As the EU is still the ACP's main paymaster, it can afford to commit institutional infanticide. The review of Cotonou next year does not look promising for the ACP. Several eastern and central European EU states are determined to slash ACP funding, which some perceive to be competing with their own development needs.

The failure to include a clause protecting co-operation with the ACP in the EU's 2009 Lisbon Treaty, and the absence of the ACP from the structures of the European external service and its directorate-general of development and co-operation, are the clearest signs of the downgrading of this relationship. Brussels' political dialogue with ACP states is clearly a "dialogue of the deaf", conducted with multilateral bodies such as the African Union and individual states, but not within a structured ACP framework.

The economic partnership agreements (EPAs) which the EU has effectively tried, since 2007, to impose on ACP governments, have been particularly contentious. These accords have sought to eliminate Cotonou's previous nonreciprocity deal and to open vulnerable ACP markets to European goods within 15 years. Many ACP states — including 17 in Africa — have refused to sign even interim agreements. They fear financial losses from lost customs duties and the flooding of their markets by EU goods, with markets forced open in sensitive areas like public procurement, services, and intellectual property rights. Rather than promoting regional integration in Africa, EPAs have often had the opposite effect: nearly breaking up the 104-year old Southern African Customs Union and harming the Caribbean Community.

The EU has set a deadline of October this year for these agreements to be concluded. It will be critical that the EPAs are negotiated with genuine ACP input rather than through unilateral threats; and that financial support and more time be provided to allow ACP economies time to adjust. The EU's Common Agricultural Policy still provides €50bn a year to European farmers, and has been particularly harmful to ACP agricultural sectors in which 70% of the populations typically find employment.

So, what is to be done? First, ACP states should diversify their markets and partnerships, using South Africa to access the Brics (Brazil, Russia, India, China, and SA) grouping. Second, discussions on the future of the ACP must have greater legitimacy. They are currently conducted in the "Brussels bubble" — a fantastical world of duplicitous diplomats, development marabouts, and omniscient eurocrats — without properly consulting civil society and private sector actors across the ACP. Third, ACP states must share "best practices" and comparative lessons from EPA negotiations across their six regions. Fourth, ACP states should exchange support for the EU in multilateral bodies for greater trade concessions. Finally, the ACP secretariat should stop relying entirely on think-tanks based in Brussels and Maastricht, and have more faith in their own institutions.

If reforms are not urgently undertaken, the ACP could become extinct. With six years till the expiry of Cotonou, many are asking if this "trade union of the poor" has outlived its usefulness. There is an awful precedent in global governance institutions that the ACP should seek to avoid. On the eve of the Second World War 75 years ago, the League of Nations — the United Nations' precursor — died an untimely death. It was scarcely mourned, let alone given a decent burial.

Adebajo is executive director of the Centre for Conflict Resolution and co-editor of The EU and Africa

This article is part of a series of fortnightly columns written by Adekeye Adebajo for Business Day every other Monday.

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