Tuesday, January 29, 2008

''Trade Capacity Is Worse Despite Preferential Access''

by Pilirani Semu-Banda

LILONGWE, Jan 28 (IPS) - Malawians still await the details of the impending economic partnership agreement (EPA) which their government is entering into with the European Union (EU).

Ten of the country’s most influential non-governmental (NGOs) have embarked on various initiatives to signal their grave concern about the implications of the EPA for Malawi.

The EPAs are a new set of deals aimed at creating a free trade area (FTA) between the EU and African, Caribbean and Pacific countries.

In April last year, five organisations wrote to EU president Angela Merkel arguing that the EPAs will not allow Malawi and other poor countries to protect their domestic industries with tariffs and other means.

In their latest statement, the NGOs feel ‘‘compelled to challenge the government in court for violating people’s rights’’ if Malawi goes ahead with the signing of the EPA.

The organisations are: the Malawi Economic Justice Network, ActionAid Malawi, Malawi Health Equity Network, Maphunziro Foundation, Manerela, the Institute for Policy Interaction, Centre for Human Rights and Rehabilitation, National Smallholders Farmers Association of Malawi, Youth and Children Shield, and the Joint Oxfam Programme in Malawi.

By signing the EPAs, the government of Malawi will be ‘‘tying the citizens into 25 years of acrimony’’, said the organisations.

The EPAs have been formulated in such a way that they will not benefit the people of Malawi nor add value to their ability to end poverty, said the organisations.

‘‘We alert the general public and civil society in Malawi not to fall for the intimidating and pressurising tactics that are being used by the EU to convince us that these EPAs are good for us,’’ the organisations declared.

According to the organisations, Malawi would need a capital injection of ‘‘a whooping 5.7 billion euros’’ to take care of supply-side constraints and other adjustment costs for the country to benefit from the proposed EPA trading framework.

‘‘Without such an injection, Malawi would remain the way it is -- with full exposure to the shocks that take place in the commodity market from time to time.’’

The NGOs pointed out that Malawi was party to the Lome’ convention, a trade arrangement that gave preferential treatment to ACP countries’s products between 1975 and 2000. However, during this period ‘‘our exports to the EU dwindled and supply-side constraints remain an issue for our industries.

‘‘What has changed to make us believe that these next 25 years with EPAs will be any different?’’ the NGOs asked.

Another contentious issue is that Malawi has been asked to liberalise 80 percent of all trade with the EU. The NGOs see it as an erosion of policy and developmental space.

The NGOs regard Malawi as a small and emerging economy with a lot of potential. History shows that for the EU to have reached its current scale of economic muscle it used a combination of policies aimed at boosting local production and protecting local industries against unfair foreign competition, said the organisations.

Malawi’s parliamentary committee on trade last month approved the signing of the interim framework agreement of the EPA. The temporary deal is aimed at averting disruption of trade between African countries and the EU, following the expiry of the Cotonou Agreement at the end of last year.

The signing of the EPA was initially slated for the end of last year but ministers from the Eastern and Southern Africa (ESA) region, of which Malawi is part, said at the ESA-European Commission ministerial negotiating meeting in Brussels in November last year that it was not practical to do so.

In the meantime it has transpired that Malawi was due to sign an EPA on its own, leading the NGOs to say that Malawians are being misinformed as Malawi is not signing as part of a bloc of countries, as was originally envisaged.

The EPA will therefore put Malawi in direct competition with the EU at a time when Malawians are hopeful of rebuilding the jobs, industries and livelihoods that had been destroyed through that other imposed scheme, the World Bank’s structural adjustment programmes, according to the NGOs.

The government has not said much on the issue. Secretary for Trade Newby Kumwembe only said that the government was weighing up the options of the trade agreement before signing it.

‘‘We need to look at all outstanding issues and make a decision. We also need to look at how our products will be affected if we do not sign this deal,’’ said Kumwembe. (END/2008)