The consequences of the EPA for agriculture in developing areas are being underestimated. The stated objective of the Agreements is to foster the development of regional markets for farm goods with the understanding that local production needing protection will get it, and that investments will allow local supply to meet local demand. The agreements will be in effect until 2020, and current calls for a transition period only underline the fact that the stakes here are long-term ones.
Europe is facing a historic turning point in its relations with developing countries as it negotiates new trade deals with the countries of Africa, the Caribbean and the Pacific (the ACP group of States). This new initiative represents a chance to build a new basis for European solidarity with developing areas at time when World Trade Organization (WTO) talks have broken down. ACP countries are longtime partners of Europe and include the majority of Least Developed Countries (LDC) and certainly the major share of the world’s poorest farm populations, many of whom live not far from Europe’s doorstep in Africa. Nonetheless the impact of ongoing trade negotiations and the far-reaching effects of the rules these talks will establish are underestimated.
The Economic Partnership Agreements (EPA) constitute the commercial chapter of the Cotonou Agreement. This Agreement was reached in 2000 and took effect in 2003 after ratification, thereby supplanting the Lomé Agreement established in 1975. The EPA are conceived as the overall trade regulating mechanism between the EU and ACP countries for the next several decades, beginning in 2008. The rules of the OMC force the EU to abandon favored-nation deals signed in 1975 to be replaced by free trade agreements.
Unfortunately the economies of ACP nations today are not in any shape to benefit from exposure to international markets, and in particular they could not survive the onslaught of low-priced imports. There is a real risk that fragile ACP economies, based essentially on primary goods exports, would be destroyed by trade. In this scenario, local agriculture would fail while State funds would dry up.
The worst case, however, may be avoidable. There is a way to put the need for new agreements to good use. The Lomé Agreement was not purely advantageous for the ACP countries, creating as it did a dependence on exports to the detriment of local markets. This was accentuated by the absence of regional markets and the inability of weak States to establish full-fledged domestic markets.
Looking ahead the EU proposition calls for the creation of six economic zones in the regions of West Africa, Central Africa, East Africa, Southern Africa, the Caribbean and the Pacific, which would constitute common markets with common external tariffs. The EU for its part would grant tariff-free unconditional access to its market by all products from all EPA signatory nations by extending the "Everything but Arms" initiative (EBA). Perhaps the most important feature is that EPAs can be asymetric, which is allowable under WTO stipulations. In this way, ACP countries could protect vulnerable local goods such as grains or animal products.
What it is coming down to is a choice between two paths. One choice would favor low-cost food imports keeping consumers happy but sacrificing local farmers, who would be forced to migrate to cities or abroad. This is the vicious circle that feeds poverty. By contrast the other choice would set in motion a positive cycle by which indigenous agriculture is protected and sustained while real regional agricultural markets are set up. Most ACP regions could meet regional food needs from a technical standpoint, if markets were protected and an active policy of investment in agriculture were pursued, as India and China have done.
These States, however, could not sustain the level of investment necessary by themselves. But the EU, for its part, does have the means for this. Clearly other actors besides the public sector at State or EU levels will need to be mobilized, but this should not be insurmountable, especially given the new generation of farmers who are ready and willing to be responsible partners.
What conditions need to obtain in order for agriculture in ACP countries to flourish ? What goods need to be protected ? What sort of transition periods will be need to help farmers on one hand and ensure short-term coverage of food needs on the other hand ? How can public policy at the national and regional level be best coordinated with private investment ? How can European aid to development be mobilized and what new forms should this aid take in order to be effective ? Combining political, economic and social aspects, these questions and their answers will have a direct impact on the lives of 700 million people including 450 million farmers. The goal is to give them the chance to support themselves with their labor and provide their family a stable outlook for a positive, rural future.
What is at stake for Europe is a chance to give its partners, who are for the most part also its neighbors, a reasonable hope for prosperity.