Paths to Development through Trade: EU-Led Trade Liberalization vs. South-South Cooperation

Historical background

Since its inception in 1957, the member states of the European Economic Community (EEC) have been actively expanding their trade with the more dependent states in the Global South through consecutive treaties.1 The signing of the Cariforum-European Community Economic Partnership Agreement between the EU and the Caribbean States in 2007, is the latest in a long list of treaties promoted by the European Community2 as a means of securing market access for its goods and services within the growing markets of the developing world.

In April 1976 the Lomé Convention came into force and set the new foundations on which the European Community would conduct its development and aid assistance policies with countries of the African, Caribbean, and Pacific (ACP) regions. Lomé replaced the Yaoundé agreement of 1963, which was the first official accord between the newly established European Economic Community (EEC – the predecessor to the European Community) and its members’ former African colonies. The Yaoundé agreement was the result of a stipulation made by France, to the other European countries, on the signing in 1957 of the Treaty of Rome, which created the EEC. France, wanting to retain its influence in Francophone Africa, mandated that the Treaty of Rome must allow for future closer trade relations between EEC members and their former colonial dependent states.3 This requirement ensured that the former colonial powers within the original six-member EEC could keep close ties with the economically dependent states in which they retained substantial investments. The Germans and the Dutch, with no substantial colonial ties to Africa, were not willing to commit the EEC to an agreement that would exclude the African states that lacked a colonial history with the Community’s members, which at this time did not include Britain; this disagreement led to a two-year negotiation process, which concluded in 1963 with the EEC signing an agreement in Yaoundé, Cameroon, granting all African states the right to a special trade association with the Community.4

At the treaty’s outset all that was offered to the African states was preferential tariffs, but the agreement was later broadened to include larger import quotas into the EEC, greater development aid, price supports for African tropical products, and establishment rights for EEC companies operating in Africa. It also led to the EEC signing two association agreements with Commonwealth African States: the Lagos Treaty with Nigeria in 1965 and the Arusha agreement with Kenya, Tanzania, and Uganda in 1969.5

In January 1973, the first Treaty of Accession came into force, bringing the United Kingdom (UK), Ireland, and Denmark into the EEC. The accession of the UK provided the twenty British Commonwealth Nations of Africa, the Caribbean, and the Pacific the opportunity to enter a special trade relationship with the newly enlarged EEC. Outlined in Protocol 22 within the Accession Treaty were three options made available to these Commonwealth countries and later extended to non-associated states.6 The options consisted of first, an association agreement similar to Yaoundé. Second, a more traditional agreement to enhance trade between the regions, and third a more specific type of convention that would consist of reciprocal rights and obligations with regard to trade relations.7 The inclusion of the Commonwealth states in the Association raised the fears amongst existing African Yaoundé members that the expansion “might dilute their benefits” by reducing the funds for aid in the European Development Fund (EDF) available to Association members and potentially reducing market access for exports into the EEC.8

In addition, a major point of contention often mentioned by Yaoundé countries, which the Commonwealth states also took exception to, was the requirement of reverse trade preferences, providing EEC members access into African markets. This policy went against the generally recognized principle – “in Part IV of the General Agreement on Tariffs and Trade (GATT) – that the developed countries not expect reciprocity in trade negotiations with less developed countries.”9 The Commonwealth States also took exception to the EEC associating aid from the EDF for accepting a Yaoundé-type agreement, and the requirement of informing the EC of their development plans, which they saw as a violation of their sovereignty. These provisions within Yaoundé were seen as perpetuating the neo-colonial relationship between EEC states and the countries of Africa. In January 1973 the Commonwealth states rejected all three options offered to them by Protocol 22 of the Accession Treaty. This set the stage for talks in Lomé, Togo, on a new agreement. During the negotiation process Yaoundé and Commonwealth states formed the larger ACP negotiating bloc in order to have a stronger position from which to reach a deal with the EEC. They also gained support from the Organization for African Unity (OAU) and the United Nations Economic Commission for Africa (UNECA).10

The long and contentious negotiations led to the signing of the first Lomé Convention (Lomé I) on February 28, 1975 between the nine EEC members and the twenty-seven ACP countries. Today, ACP countries total seventy-nine, which include forty-eight African, sixteen Caribbean, and fifteen Pacific states. The agreement was shaped by the desire of ACP countries to secure better trade conditions and aid for their development goals and that of European states to create a more stable pricing system for a range of commodities in an unstable export market environment. Lomé I came into force in April 1976. It established general principles of trade which, by the more liberalized trade standards subsequently dictated by the World Trade Organization (WTO – founded in 1995), would be seen as overly restrictive to the free flow of goods and capital. The founding principles put forward by Lomé I were as follows:

  • non-reciprocal preferences for most exports from ACP countries to the EEC;
  • equality between partners, and respect for sovereignty, mutual interests and interdependence;
  • the right of each state to determine its own policies;
  • security of relations based on the achievements of the cooperation system.
  • Introduction of the STABEX system (to compensate ACP countries for the shortfall in export earnings due to fluctuation in the prices or supply of commodities).11

These principles went beyond the reach of the newly revised Yaoundé II (1971) agreement, not only by adopting standards of non-reciprocity and thus providing ACP countries greater access to EEC markets, but also in redefining the rules of origin and creating a special protocol for the trade of sugar, beef, rum and bananas, allowing 96% of ACP agricultural exports to enter EEC markets duty and quota free.12 Lomé was renegotiated three times before its eventual replacement. Lomé II, signed in 1979, expired in 1985; it did not initiate any major changes. However, it introduced the SYSMIN system, which similarly to STABEX gave funds to ACP members to offset export shortfalls, but in this case exclusively for the mining industry.  Lomé III, signed in 1984, expired in 1990; it shifted the Convention’s focus from industrial development to self-reliant development and food security. Lomé IV, signed in 1989, was replaced by the Cotonou Agreement in 2000; this final version of the Lomé Treaty put a great deal of significance on the promotion of democracy, human rights, and good governance in the ACP member states.13

In order to put the EU’s current rhetoric regarding the benefits of the newly signed Cariforum-EC Economic Partnership Agreement (EPA) into perspective, it is instructive to examine the relative effectiveness of these past agreements vis-à-vis the development aspirations of the EC for the ACP member states. In Part IV of the Treaty of Rome, “Association of the Overseas Countries and Territories”, states:

The Member States agree to associate with the Community the non-European countries and territories which have special relations with Belgium, Denmark, France, Italy, the Netherlands and the United Kingdom… The purpose of association shall be to promote the economic and social development of the countries and territories and to establish close economic relations between them and the Community as a whole. In accordance with the principles set out in the Preamble to this Treaty, association shall serve primarily to further the interests and prosperity of the inhabitants of these countries and territories in order to lead them to the economic, social and cultural development to which they aspire.14

These aspirations complemented those of the ACP and served to garner support for future Associations that the European states would pursue.

The following overview of the overall economic and trade performance of the ACP members, in regard to the Yaoundé and Lomé conventions, must be seen in the context of the global changes since their inception – further integration of European states, and the demands and constraints placed on states by the liberalization of international markets.

In a Green Paper (a consultative document) published in 1996, the European Commission conducted a broad evaluation of the relations between the EU and ACP countries and concluded that “(i)n the last two years, the economic situation has improved appreciably in a growing number of ACP countries.” The Commission goes on to acknowledge the poor development performance of ACP countries over the preceding three decades, particularly in sub-Saharan Africa. The Commission further conceded that there is “no shortage of indicators to support this assertion,”15 offering the following examples:

  • Per capita GDP in sub-Saharan Africa grew by an average of only 0.4% a year between 1960 and 1992, compared with 2.3% for developing countries as a whole.
  • Sub-Saharan Africa began to lose its market share internationally in the 1970s and continued to do so throughout the 1980s, up to 1993.
  • Caribbean countries…GNP growth has been poor (even if one excludes Haiti), averaging 1% since 1990, and there is considerable poverty.
  • The eight Pacific ACP States…As islands, with very small-scale economies, the eight countries are highly vulnerable to external influences: they are heavily dependent on trade and vulnerable to natural disasters such as cyclones.16

The lack of economic success of the ACP countries can be attributed to multiple causes which include a colonial legacy that did a great deal of damage to the social fabric of these states. Nonetheless, it must also be stated that attempts at economic adjustment and reforms introduced in the 1980s, which forced ACP states to reduce public sector spending, curtailed the effectiveness of the economic and social foundations of the state. As a consequence the Commission argued that only “later did the IMF and World Bank in particular” along with the EU as a whole see “the need to make government institutions work better.”17 In all, the three previous decades under the Yaoundé and Lomé conventions did little to reduce poverty in ACP countries. All the talk as to the benefits of more trade in reality resulted in “a continued deterioration of the relative ACP position in the EC markets.”18

In the post-Cold War world and with the changing character of an integrating EU, coupled with the realization that the Lomé trade preferences had done little to increase export growth or diversify the economies of ACP countries, the EU started to question the rationale of continuing the agreement. In addition, the United States petitioned the WTO to investigate the trade preferences of the EU-ACP agreement. The WTO, in 1996, ruled against the EU, proclaiming that Lomé ran counter to international trade rules and should be discontinued. Lomé was eventually replaced in 2000 by the Cotonou Agreement, which was named for the city of Cotonou in Benin, where the negotiations were held. Cotonou, like its predecessor, is centered on sustainable development, poverty eradication and the gradual integration of the ACP countries into the global economy.19

The Cotonou Agreement bases the relationship between the EU and ACP countries on three major pillars, which include a political dimension, development aid and trade assistance. The agreement is set for a twenty-year period from 2000-2020 divided into five-year periods in which revisions are undertaken with respect to current international trade conditions. The fundamental principles that underpin this agreement are outlined in Article 2:

equality of the partners and ownership of the development strategies: for the purposes of implementing the objectives of the partnership, the ACP States shall determine the development strategies for their economies and societies in all sovereignty…

participation: apart from central government as the main partner, the partnership shall be open to different kinds of other actors in order to encourage the integration of all sections of society, including the private sector and civil society organisations, into the mainstream of political, economic and social life;

the pivotal role of dialogue and the fulfillment of mutual obligations: the obligations assumed by the Parties in the framework of their dialogue shall be central to their partnership and cooperation relations;

differentiation and regionalisation: cooperation arrangements and priorities shall vary according to a partner’s level of development, its needs, its performance and its long term development strategy. Particular emphasis shall be placed on the regional dimension. Special treatment shall be given to the least developed countries. The vulnerability of landlocked and island countries shall be taken into account.20

The addition of the political dimension to the agreement has made the principles of good governance and human rights integral for ACP countries seeking development aid from the EU. However, it is the area of trade itself that comprises the most significant aspect of the agreement. Having been required by the WTO to end the special preferences to ACP countries under Lomé, the EU attained a temporary waiver to continue its trade preferences under Cotonou. The rationale for attaining the waiver was to give the EU and ACP countries time to negotiate new trading agreements. These Economic Partnership Agreements (EPAs) did not violate WTO rules by favoring one group of trading partners over another. The EU and ACPs were given until 31 December 2007 to implement the EPAs. If the EPAs were not implemented by the expiration date the EU would not be allowed to extend the waiver, and on January 1, 2008, it would have to cancel the Cotonou Preferences.

The EPA negotiations were complex and difficult, because unlike in the case of the non-reciprocal trade preferences that characterized the Lomé Agreements, the EU was looking to establish reciprocal trade access into ACP countries for its products in order “to further its own aggressive market access strategy.”21 The supposed initial goal of these talks was to conclude EPAs “that would promote ‘poverty reduction, sustainable development and the gradual integration of ACP countries into the world economy’, and which would bolster regional economic integration.”22 By allowing the Cotonou Preferences to expire and follow the rules of the WTO, the EU made a major shift to a more neoliberal development policy.23

The EU is currently in the process of implementing EPAs which have been criticized as requiring too much trade liberalization from the developing countries, opening up their vulnerable markets to a flood of EU products and services.24 The EU was widely criticized for its approach to these negotiations when it used “the expiration of the WTO waiver to coerce ACP countries into accepting free trade agreements (FTAs).”25 At issue was that if an FTA or EPA was not signed, least developed countries (LDCs) would be able to use Everything But Arms (EBAs) agreements to continue getting duty-free access to export their products to the EU. However, non-LDCs such as Côte d’Ivoire and Nigeria would have to revert to the Generalized System of Preferences (GSPs), which would negatively impact some of their export sectors.  However, more than half of ACPs refused to sign a deal “because they faced immediate costs: hundreds of thousands of jobs in their major export sectors, including horticulture, bananas, and tuna, were put at risk.”26 Today, the EU has several interim EPAs with countries such as Côte d’Ivoire, Cameroon, Mozambique and others but, has been able to sign only one full regional EPA, the Cariforum-EC EPA, finalized with the Caribbean states on October 15, 2008.

Global Europe

To understand the EU’s approach in seeking a set of treaties that, by all measurements, require far more domestic market liberalization from developing countries than demanded by the WTO, one needs to analyze the EU’s overall share of world trade and access to domestic markets of developing countries. In October 2006 the European Commission revealed its strategic vision in a report titled Global Europe: Competing in the World. The report outlines the EC’s view that in order “to deliver growth and jobs” in Europe, markets within the Union must be further liberalized. However, this internal liberalization “must be complemented with an external agenda for creating opportunity in a globalised economy”, which includes their “trade and other external policies.”27 Though this document is bold and direct in its statement of the EU’s goals with regard to trade liberalization, a more candid confidential draft version dated 28 June 2006, leaked to the public, titled “Draft Communication on External aspects of Competitiveness”, was produced by the Directorate General for Trade of the Commission (DG- Trade).

The document states bluntly that in order to stay ahead of international competition “it is essential to adopt a dynamic approach that looks at the position of EU firms in a globalizing international economy.” In addition, the EU must promote “activism abroad” and “should be resolutely outward looking.” According to DG Trade,28 securing the competitive edge of the EU via this “activism abroad” must address non-tariff barriers to EU trade. First, the document argues, “it is useless to get tariff reductions if the market remains closed by e.g. sanitary and phytosanitary (SPS) requirements, public procurement regulations, excessive customs controls or if exports are unprofitable due to specific norms to be adopted.” Second, “EU producers need a better access to raw material inputs in order to compete on a fair basis.” Third, “we need to further strengthen the presence of EU companies in third countries through a permanent establishment. A ‘physical’ presence in a foreign country consolidates the image of the firm, and that of the country of origin; adds predictability to the flow of trade, not relying on local importers.” This third quote is quite revealing because the EU has actively rejected the criticism that the EPAs it seeks to sign with ACP countries harm the capacity building of local industry and hinder South-South regional integration. Lastly, the EU “should open public procurement markets abroad. This is an area of enormous untapped potential for EU exporters. EU companies are world leaders in many areas such as transport equipment, public works and utilities.”29

This aggressive posture from the EU results from the realization that its overall economic output has “increased by 40% over the last two decades” due to the high quality and brand name recognition of the region’s products and services in comparison to those of its competitors such as the US and Japan. Nonetheless, the EU recognizes that it must be able to continue this overall performance if it is going to be able to stay competitive. In other words, it is the ability to maintain and increase access to additional markets for its industries that is the true objective behind its “activism abroad” in the form of EPAs with ACP countries, and not the desire to contribute “to the reduction and eventual eradication of poverty through the establishment of a trade partnership”30 and the development of regional integration as is stated in the Cariforum-EC EPA.

Cariforum-EC EPA vs. South-South cooperation

The emergence of South-South Cooperation is a direct response by developing countries which seeks to offer an alternative to the dominance of Western countries in the realm of international development assistance. Specifically, South-South Cooperation is a rejoinder to the conditionality, in the guise of free market reforms, which Western lending institutions such as the EU impose on developing countries seeking development or temporary financing assistance. Cooperation between countries of the South has led to alternative financing institutions such as the Bank of the South, a lending institution established in 2009 by Brazil, Paraguay, Uruguay, Ecuador, Bolivia, Argentina and Venezuela to provide funding to countries in the region for infrastructure and social development projects. Other projects include the Caribbean Single Market and Economy (CSME), an effort by the Caribbean Community (CARICOM) states to establish a single market among its members in order to foster sustained economic growth and build capabilities of their industries. The establishment of these regional institutions and partnerships is vital to the efforts of developing countries to develop their industries and infrastructure to a level that would allow them to compete with the larger establish multinational industrial and financial institutions of Western countries.

The initialing of the Cariforum-EC EPA in December 2007 represents the mise au point of the EU’s Global Europe strategy. The agreement was signed in October 2008 and provisionally applied from December 2008. The two parties to the agreement are the EC (since December 2009 and the coming into force of the Lisbon Treaty, the EU) and the 15 ACP member states from the Caribbean region. It was completed to replace the Cotonou Agreement, which has governed trade relations between the two parties since 2000. The Agreement has not yet entered into force “because neither all EU nor all CARIFORUM member states have completed the procedures of ratification and notification as required by article 243 of CF EC EPA.”31 This legally binding treaty has no defined expiration date, promotes full integration into the world economic system, enforces “national treatment” rules preventing the Caribbean states from discriminating between local and foreign firms in trade practices, and establishes intergovernmental institutions that may supersede state sovereignty and undermine the region’s efforts to establish the CSME, which is essential to building their collective economic bargaining power internationally.32

EPAs have been roundly criticized as simply the imposition of unfair free market “reforms” by the EU on ACP countries, measures that bring unfair competition to ACP domestic markets, impede their sovereignty with respect to governance issues, hurt poverty alleviation through local industry development, and hinder regional integration efforts among these countries. These criticisms have been aggressively denied by the EU. In the EU’s opinion, while these agreements are “ambitious” on their part, they are pursued in a “balanced and just” manner to “liberalise international trade further, opening markets in which European companies can compete and providing new opportunities for growth and development.”33 If we are to understand the EU’s argument, we are being asked to believe that aggressively liberalizing ACP countries’ domestic markets will not only enable these states to increase their internal domestic capacity but will also enhance their regional markets, bringing about long term sustainable development.  However, as we have seen from the historical analysis of EU-ACP trade and development agreements, even under the non-reciprocal preferences of Lomé, which allowed 99.2% of ACP exports to enter duty-free and quota-free34 into European markets, the development benefits did not materialize.

The non-reciprocal preferences meant that for more than two decades ACP countries were allowed to freely export their products to EU markets and simultaneously protect their internal markets from EU competition. As the EC’s analysis in its 1996 Green Paper demonstrated, this generous trade policy had little to no positive effects on alleviating poverty, or on fostering development and regional integration in these regions. Nevertheless, we are now asked to believe that reversing this trend and allowing EU firms full access into ACP domestic economies will be the deus ex machina to the development and regional woes of ACP countries. This is after it has been revealed in the draft strategy paper that the EU is more concerned with establishing a “physical” presence in a foreign country for its firms so as to not rely on any “local importer.” This particular argument in favor of further liberalization has been repeated ad nauseam by free trade advocates in the majority of developed countries, and not just by the EU. The problem for these free trade supporters is that thirty-plus years of these policies within the countries where they have been applied has demonstrated great disparity between the predicted outcomes promoted by supporters and the observed results on the ground.

An example of this disparity is provided by liberal market supporters such as David Dollar and Aart Kraay, who claim that in looking at the high rate of growth in China, India, and South-East Asia, specifically Vietnam, we see a decline in overall inequality.35 But a quick analysis of that statement shows that the East Asia & Pacific region has seen its share of world output grow from 9% in 1995 to 14% in 2006, while South Asia went from 4% to 6%. The Latin America and Caribbean regions saw a decline in their share of world output from 9% to 8% and Sub-Saharan Africa saw no growth at all in its 2% share.36 These numbers are more questionable when we look more deeply at the individual countries. Liberalization promoters like to point out that if we take a global perspective of the effects of these policies we see positive outcomes. But again all of the positive outcomes of these policies come from the disproportionate growth we see in a small number of countries, principally China and India, that have had an uneven share of the world economic output, thus skewing the results in comparison to the less developed countries in other regions. It is this exact point that economist James K. Galbraith makes regarding Dollar and Kraay’s argument.

It is extraordinary that India, China, and Vietnam should be offered as three of the five major examples of globalizing success stories. India’s relative success began in the 1980s, partly because strict capital controls and long-term official development assistance helped protect it from the debt crisis that occurred in Latin America and elsewhere. China grew at first on the strength of agricultural reform and then through a program of industrialization financed mainly by internal savings; it has to this day not liberalized its capital account. Vietnam and China remain under the control of their communist parties; these are not “Washington consensus” countries by any means.37

As stated by Galbraith, it is the countries that have not allowed full unrestricted access to their domestic markets that have managed to grow their economies and are now considered the future source of continuing growth in the world market. Regardless of the documented failure of the liberalization leads to development and prosperity mantra, the EU is pushing this questionable ideological trade policy on a set of countries ill-equipped to handle its effects. As more than one analyst has noted, “The EPA itself is replete with development rhetoric, and references to the development objectives of the Agreement.”38 However, the lofty language on the benefits to development found in the Cariforum-EC EPA does not measure up to close scrutiny. The Office of Trade Negotiations (OTN) previously called the Caribbean Regional Negotiating Machinery (CRNM) provided the following breakdown of trade liberalization of the Cariforum-EC EPA:

For table, please click HERE

By adding together the first four figures of the total for CARICOM (the bottom row), it can be calculated that over 80% of EU imports to the Caribbean states will be liberalized within 15 years of the signing of the agreement. “This heavy front-loading of the liberalization schedule should have been reversed, especially given the very large disparities in competitiveness between the CF [Cariforum] and the EU.”39 This front-loaded schedule will have several effects, amongst which it will allow the EU’s largest Multi-National Corporations (MNCs) to compete against smaller local firms in the Caribbean region, and reduce local government revenue due to reduction or elimination of tariffs. In addition, the EPA commitment to ‘National treatment’ requires that EU firms operating in the Caribbean be treated in a similar manner to local firms. This means that the Caribbean States are not allowed to impose any preferential treatment to support their local firms in terms of laws, requirements and regulations, though they are not restricted in providing domestic subsidies.

Yet how are the Caribbean states able to compete in terms of subsidies? “In 2006, Europe spent €50bn on support to its farmers”40 in the form of subsidies, an amount that at current rate of exchange with the US dollar almost equals the total GDP of the Caribbean region in 2006 of $89.5 billion.41 Overall ‘National treatment’ deprives Caribbean governments of a means of fostering the growth of national firms and regional production integration via preferential government purchases, tax incentives, subsidies etc.42 Moreover, the EPA calls for liberalization in the services sectors such as postal services, education and healthcare, requiring rules that go beyond the WTO’s General Agreement on Trade in Services (GATS). Specifically, “Cariforum countries will liberalize access to EU firms and service providers in 75% of their service sectors for the More Developed Countries of the region and 65% in the Less Developed Countries.”43 In general, the liberalization of local Caribbean economies greatly hinders the ability of these countries to build their infrastructure and production capacity, which is a necessary step to being able to compete on the global markets.

In 2007, Heads of Government in the Caribbean approved the Caricom Development Vision report, which outlined a framework for regional development and set a timetable for the completion of the Caricom Single Market and Economy by 2015. Regional integration lies at the core of the Caribbean’s development aspirations over the next five to ten years, but “there are a number of features of [the EPA] that are distinctly anti-integration.”44 The EPA sets up a governance structure led by the Joint Cariforum-EC Council, the main body with the power to make binding decisions on all Parties related to the Agreement, which gives the Joint Council greater authority than any other organ of the CARICOM.45 The Council’s influence gives the EU the ability to exert more pressure on the weaker Caribbean members by the virtue of its control over development assistance.46 In addition, the EPA has preempted the CSME in several policy areas it has yet to consider, gaining commitment on issues such as financial services, investment, public procurement, e-commerce, intellectual property and the environment.47 Moreover, the EPA’s Revision Clause is broad and focuses on extending the scope of the Agreement in the future, leaving the Caribbean States vulnerable to more liberalization requirements from the EU.48 Also, with regard to provision on the Rules of Origin, the EU has placed narrow limits on the extent to which third party materials and services can be included in products to be exported to its market. Lastly, the implementation cost of the Agreement will create a large financial burden for CARICOM states. In his comprehensive report, An Assessment of the Overall Implementation and Adjustment Costs for the ACP Countries of Economic Partnership Agreements with the EU (2005), Chris Milner School of Economics estimated the “overall cost of EPA adjustment for all ACP regions to be about €9 billion with the Cariforum-EC EPA costing €924 million.49 The amount programmed for the Cariforum Regional Indicative Programme for 2008-2013 under the 10th European Development Fund is €165 million. Of this, €33 million is earmarked for EPA Implementation. This is no more than 4% of the total EPA adjustment and implementation costs estimated in the Milner Report.50

Conclusion

The EU from the start of the negotiation process has used very aggressive tactics to force ACP countries to agree to EPAs and other Free Trade Agreements that encompass reciprocal trade rules and support the ‘Singapore issues’, which include the more sensitive trade areas such as public procurement, investment, competition policy and intellectual property, all of which were roundly rejected by developing countries within the WTO Doha Development Round negotiations. These issues were not included in the trade rounds, precisely because they are the areas that developing countries consider the most crucial for development, poverty reduction and fostering a strong base for future regional integration.

The implications for the Caribbean states and other ACP regions are nothing short of grave. The EU’s “activism abroad” policy is endangering developing countries’ ability to build a viable infrastructure, establish firms that are able to compete internationally and integrate regional production networks that are essential for achieving their development goals. South-South Cooperation within this environment will be undermined by the interests of Western countries if ACP countries do not stand together in order to speak with a collective voice and contest the domination of the international economic system by the EU and other Western powers.

Notes

1. Macki Sissoko, Louis Osuji, and William Cheng, “Impacts of the Yaoundé and Lomé Conventions on EC-ACP Trade,” African Economic &Business Review,  Vol 1, No.1, Spring 1998, 6-24
http://www.theaebr.com/v1n1sp1998sissoko.pdf

2. In 1967, the European Coal and Steel Community (ECSC), created in 1951 by the Treaty of Paris, and the European Atomic Energy Community and European Economic Community, created in 1957 by the Treaties of Rome, were united into the European Community. The European Community acted as the central governing body, managing economic and social relations between the signatory nations, until the signing of the Treaty on European Union, in Maastricht, February 1992. Going forward, the European Community became one of the three pillars of the European Union, which included the European Communities, Common Foreign and Security Policy and Police and Judicial Cooperation in Criminal Matters. In December 2009, when the Lisbon Treaty came into force, establishing the European Union as a legal entity the three-pillar structure ceased to exist.

3. JoannaMoss,  The Lomé Conventions and Their Implications for the United States (Boulder, CO: Westview Press, 1982), 1.

4. Ibid., 5.

5. Ibid., 5-9.

6. Sissoko et al., “Impacts of the Yaoundé and Lomé Conventions” (note 1).

7. Moss, The Lomé Conventions, 15.

8. Marjorie Lister, The European Community and the Developing World (Brookfield, VT: Avebury, 1988).

9. Moss, The Lomé Conventions, 16-17.

10. Ibid., 17.

11. The Cotonou Agreement and Non State Actors Basics http://www.fes-tanzania.org/documents.php Stabex and Sysmin are European Commission compensatory finance schemes intended to stabilize ACP countries’ export earnings.  Stabex is a general scheme, while Sysmin covers mining products.

12. Sissoko et al., “Impacts of the Yaoundé and Lomé Conventions.”

13. European Commission, “Europa Aid Development and Cooperation”,
http://ec.europa.eu/europeaid/where/acp/overview/lome-convention/lomeitoiv_en.htm#2

14. Treaty of Rome (as amended and consolidated), Part IV, Article 131,
http://eur-lex.europa.eu/en/treaties/dat/12002E/htm/12002E.html

15. European Commission, Directorate-General VIII/1 Green Paper on relations between the European Union and the ACP countries on the eve of the 21st century, Challenges and options for a new partnership Brussels, 20 November 1996
http://training.itcilo.it/actrav_cdrom1/english/global/blokit/green2.htm

16. Ibid.

17. Ibid

18. Sissoko et al., “Impacts of the Yaoundé and Lomé Conventions.”

19. Justice Nwobike, “The Application of Human Rights in African Caribbean,”  German Law Journal, Vol. 6,.No.1, 2005, 1381-1406, http://www.germanlawjournal.com/index.php?pageID=11&artID=640

20. Partnership Agreement ACP-EC. Signed in Cotonou on 23 June 2000, revised in Luxembourg on 25 June 2005, European Union Publications Office, 2006 ,
http://www.europarl.europa.eu/intcoop/acp/03_01/pdf/cotonou_2006_en.pdf, 6-7

21. Traidcraft, Economic Partnership Agreements: The EU’s New Trade Battleground, September 2003, http://www.ongd.lu/article.php3?id_article=375

22. Oxfam Briefing Paper, Partnership or Power play? April 2008, 2

23. Traidcraft, Economic Partnership Agreements.

24. Oxfam, Partnership or Power play?

25. Ibid.

26. Ibid.

27. European Commission, Directorate General of Trade, Global Europe: Competing in the World: A Contribution to the EU’s Growth and Jobs Strategy, October 2006,
http://trade.ec.europa.eu/doclib/docs/2006/october/tradoc_130376.pdf, 2

28. The European Commission is comprised of several departments and services. The departments are referred to as Directorates-General (DGs). The Directorate General for Trade (DG Trade) is responsible for implementing the European Union’s common trade policy.

29. European Commission, Directorate General for Trade, Draft Communication on External Aspects of Competitiveness, Brussels, 28 June 2006, Ref. 318/06.

30. Economic Partnership Agreement: CARIFORUM States and the European Community and its Member States, October 30, 2008,
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:289:0003:1955:EN:PDF, 1

31. Joyce van Genderen-Naar and Anthony Morgan, “The CARIFORUM–EC EPA: Where do we stand two years later?” December 2010 http://www.normangirvan.info/wp-content/uploads/2010/12/naar-morgan-epa-update-dec-2010.htm

32. Norman Girvan, The EPA: Fact vs. Fiction Issue 3, April 10 2008,
http://www.crnm.org/epa_fact_fiction3.htm and “Implications of the Cariforum-EC EPA”

33. European Commission, Global Europe (note 27).

34. Sissoko et al., “Impacts of the Yaoundé and Lomé Conventions.”

35. David Dollar and Aart Kraay, “Spreading the Wealth,” Foreign Affairs, Jan./Feb. 2002,
http://faculty.virginia.edu/usdiphis/readings/Dollar%20and%20Kraay,%20Spreading%20the%20Wealth.pdf

36. World Bank’s World Development Indicators data files — World output is measured in 2005 international dollars (GDP in purchasing power parity terms).

37. James K. Galbraith, “By the Numbers”, Foreign Affairs, July/August, 2002,
http://www.foreignaffairs.com/articles/58047/james-k-galbraith/by-the-numbers

38. Havelock R. Brewster, “The anti-development dimension of the European Community’s Economic Partnership Agreement for the Caribbean.” Paper presented at the Commonwealth Secretariat High Level Technical Meeting: “EPAs: The Way Forward for the ACP.” Cape Town, South Africa, 7-8 April, 2008,
http://www.normangirvan.info/the-anti-development-dimension-of-the-european-communitys-economic-partnership-agreement-for-caribbean-havelock-brewster/

39. Brewster, “The anti-development dimension.”

40. Oxfam, Partnership or Power Play?

41. IMF World Economic Outlook Database, April 2010

42. Norman Girvan, “Implications of the Cariforum-EC EPA,” 21 January 2008,
http://www.normangirvan.info/wp-content/uploads/2008/01/girvanimplicationsepa10jan.pdf

43. Ibid.

44. Brewster, “The anti-development dimension.”

45. Girvan, “Implications of the Cariforum-EC EPA.”

46. Ibid.

47. Brewster, “The anti-development dimension.”

48. Norman Girvan, “Caricom’s Single Develoment Vision and the EPA: ‘The Fork in the Road’,”  ILO/CCL Round Table, 23-25 June 2008, Power Point presentation available via http://www.normangirvan.info/category/epa-text-and-commentaries/norman-girvans-epa-papers/page/2/

49. Chris Milner, An Assessment of the Overall Implementation and Adjustment Costs for the ACP Countries of Economic Partnership Agreements with the EU. Report to the Commonwealth Secretariat. School of Economics, University of Nottingham, 2005,
http://www.acp-eu-trade.org/library/files/Milner_EN_011005_Commonwealth-Sec_Assessment-of-impl-and-adj-costs-of-EPAs.pdf

50. Girvan, “Caricom’s Single Develoment Vision and the EPA.”

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