EPA will cost poor countries nine billion dollars annually - Oxfam

Accra, April 21, GNA - Oxfam International, a UK-based charity organization, on Monday said the Economic Partnership Agreement (EPA) due to be signed between the European Union (EU) and the African/Caribbean and Pacific (ACP) countries this year, would cost ACP countries nine billion US dollars in tariffs alone if not overhauled.

"EPA has failed to deliver on development for ACP countries and unless the EU overhauls the free trade deals due to be finalized this year, it will do irrevocable damage to the development prospects of some the poorest countries in the world," Oxfam said in a 47 page report titled "Partnership or Power Play."

The report said "EPA will hurt the poor people and undermine development across the ACP countries if ACP Leaders go ahead and sign it this year."

The EPA proposed complete trade liberalization between the EU and ACP countries with no consideration for ACP countries' capability to compete fairly.

Already some ACP countries including Ghana had initialled an Interim EPA, under which about 80 per cent of exports from Ghana to the EU and from the EU to Ghana are supposed to go quota-free and duty free. Giving an overview of the report in a press conference at the ongoing UNCTAD XII conference in Accra, Ms Emily Jones, author of the Oxfam report, said the EPA would lead to a total annual loss of nine billion US dollars in tariffs to ACP countries and US$360 million annual tariff losses to Africa alone.

"Ghana and Cote d'Ivoire, which have signed the Interim EPA, stand the risk of losing at least US$83 million dollars a year in tariffs under that interim agreement," she said.

"Obviously six years of negotiations of the EPA has completely failed because the interests of ACP countries have totally been ignored," she said.

Ms. Jones said the EPA would exacerbate the way in which ACP countries were being integrated into the global economy if not stopped and push the 300 million peoples of the ACP countries into worse economic conditions that they faced now.

She argued that through the EPA, the EU sought to open up the economies of ACP countries up for heavily subsidized products from the EU, with very little commitments from the EU itself on how to assist the ACP countries to compete fairly.

She noted that whereas the ACP countries faced serious productions constraints in the products covered under the EPA, the EU on the other hand provided heavy subsidies to its local producers of goods covered under EPA, thereby giving EU producers unfair advantage over their ACP counterparts.

Ms Jones also noted that strict intellectual property rules proposed by the EU in the EPA would deepen the digital divide and challenge traditional farming methods, including seed saving, which was largely practised in the ACP countries. She therefore proposed that a fair deal for the ACP countries would be for the EU to open up its markets to all exports from the ACP countries without demanding reciprocation. "Such a move will give the developing countries the policy freedom to govern in the public interest and pursue regional integration on their own terms.

"It will assist the countries to become more competitive, generate decent jobs and access to new technologies," she said. Ms. Jones, therefore, called on the 25 ACP countries, which have initialled the Interim EPA to pull out saying that at this stage the agreement was not yet binding on them so they could pull out and re-group for a better deal.

Ms Elizabeth Tankeu, African Union Commissioner of Trade and Industry, noted that the Interim EPA signed by some African countries had completely "messed up" regional integration efforts in Africa. She explained that those African countries, which have signed the EPA Light, did so without recourse to the common interest of the regional blocs, saying that EPA was supposed to have been signed between the EU and regional groupings in Africa and not with individual countries.

"As things are now, what will we be ratifying this year given that some of our member countries are already accessing EPA Light," she asked.

Ms. Tankeu said the AU gave political backing to the demand for the EU to allow African States to build their local production capacities, national markets and establish thriving intra-trade links among themselves before opening up to the EU in the manner the EPA proposed "but they will simply not listen".

She said EU wanted just trade liberalization but Africa needed development before trade liberalization else the people of Africa would have no chance to rise from their poverty.

"We need cooperation based on favourable terms, not binding rules and regulations from giants like the EU - we need to be in charge of our trade and investment policies and we are ready to meet the leaders of the EU to debate the issues further till we reach a common ground," she said.