As well as the EU’s role in economic and social devastation in Africa, minority ethnic groups in Europe bear the brunt of EU austerity argues Kwesi Adabunu
I wish to argue in this article that, it is in the long term interests of African-Caribbeans living in the UK to vote for Britain to leave the European Union (EU). The main thrust of my argument is that the EU is an imperialist project which is actively and unashamedly extracting the resources and exploiting the labour of the people of Africa and the Caribbean through trade and other means.
The article also argues that far from ensuring the rights of freedom of movement into and around Europe, EU immigration policy is racist and in particular aimed at excluding African people from the European continent, despite the EU’s role in the economic and social devastation on the African continent.
This article focuses on one particular issue to demonstrate this point. This issue is the Economic Partnership Agreement (EPA) – a free trade agreement – that the EU has pressurised some African, Caribbean and Pacific (ACP) states to sign. This agreement has profound and long term implications for the welfare of Africans and Caribbean people living not only in Africa and the Caribbean but also in Britain.
What are Economic Partnership Agreements?
Economic Partnership Agreements (EPAs) are trade agreements ostensibly meant to safeguard the “preferential access” to EU markets that the countries of Africa, the Caribbean and the Pacific (ACP) were granted under the Lome Convention of 1975 (a Trade Agreement). The Lome Convention was based on the principle of “non-reciprocity”. This principle meant that, for example, Africa was not obliged to grant Europe “reciprocal access” to African markets in return for Africa’s “preferential access” to Europe’s market.
Another important aspect of the principle of non-reciprocity is that of “competitive advantage”. What this means is that, for example, cocoa beans from Ghana entering the European market, were subject to lower tariffs than say cocoa beans from Brazil. Hence, cocoa farmers from Ghana had a “competitive advantage” over cocoa farmers from Brazil.
Like most things in life we have to go behind the surface in order to understand the meaning of this “preferential access” for Europe. This is because the EU presents “preferential access” as if it is doing a favour to its former colonies. In reality, Europe was in need of secure sources of raw materials to consolidate its industrialisation and to perpetuate the international division of labour whereby its former colonies remained producers of raw materials (with no value added) for the European market. This meant that the former colonies of Europe were locked into a trade relationship with Europe which undermined any prospects for developing manufacturing industries which were the basis for Europe’s own development.
Now, let us fast forward from the Lome Convention of 1975 to the era of globalisation. The Lome Convention was replaced by the Cotonou Agreement of 2000. Why? The answer in one word is “Globalisation” or to be precise imperialism. With the advent of globalisation and the World Trade Organisation (WTO), non-reciprocal trade agreements became open to challenge in the WTO because they were seen as discriminating against other developing countries. The Cotonou Agreement of 2000, sought to solve this problem. How? By stipulating that by 2008, all ACP countries should have in place WTO-compatible trade agreements to be known as Economic Partnership Agreements. WTO compatibility basically means ACP countries should open their markets to competition.
The EPA negotiations have been protracted because the ACP countries have been resisting the diktat of the EU which is seeking to impose its trade agenda on the ACP countries without regard for the developmental challenges facing the ACP countries such as high unemployment and poverty. To date, only 36 of the original 76 ACP countries have initialised or signed an EPA. Hence, the EU is threatening to deny access to the EU market for ACP countries that do not accept an EPA.
What are the key features of EPAs?
- Liberalisation of markets, meaning the opening up of the markets of ACP countries for the dumping of subsidised goods and services from Europe.
Elimination of tariffs on goods. About 90% of tariffs on all trade will be eliminated over a ten year period meaning ACP countries will lose tariffs on EU imports into their countries.
- Liberalisation of investments, government procurement, intellectual property and capital accounts of ACP countries. This means the deregulation of these strategic economic sectors leaving the governments of the ACP countries unable to regulate them.
- “Aid For Trade” meaning the EU will provide money to the ACP to compensate them for the “adjustment costs” of liberalisation.
- Asymmetrical “Negotiations” – The EU has been negotiating the EPAs as one powerful trading bloc for the benefit of their large corporations whilst the ACP countries are fragmented and small and hence the negotiations if one should call them that are asymmetrical. In fact what is actually taking place is a diktat by EU and not any meaningful negotiations.
Consequences of the EPAs for ACP countries
What are the consequences of the EPAs for ACP countries? Let us take them in turn in the order outlined above:
Liberalisation of markets
The EU presents the liberalisation of markets as something mutually beneficial to the EU and ACP countries. Nothing could be further from the truth. Taking Ghana as an example, even if the EU opens up 100% of its market, this is worth less than 1% of the value of Ghana’s exports to the EU. The reality is that African firms for example, do not have the capacity to export more goods to the European market to derive any benefits. Some of the negative consequences of market liberalisation for ACP countries include:
a) The already weak domestic manufacturing and other productive sectors of the ACP countries will collapse because of the opening of their markets to subsidised goods from the EU. Millions of people will be out of work.
b) Localagricultural production and local agricultural enterprises in the ACP countries will be wiped out due to the dumping of subsidised EU food on their markets. With the enlargement of the EU to 28 member states, the volume of this dumping will increase. Already the importation of subsidised frozen chicken is having a devastating effect on local poultry production in Ghana and Uganda. Women are the worst affected when agriculture production collapses.
The former President of Tanzania commented that: “We cannot continue to export a narrow range of (largely primary) products and import a broad range of finished goods on our way to development. The hard work of industrialization and food production must be done”. TheEU is however, busy undermining the meagre efforts at industrialisation and food production of the ACP countries.
Liberalisation of investments, government procurement, intellectual property and capital accounts
The liberalisation of these key sectors of the economies of the ACP countries, means that European investors and corporations could enter and operate in the economies of the ACP countries with their governments unable to regulate their activities. Even WTO rules do not permit this level of deregulation of a country’s economy. Developing countries fought hard to exclude the deregulation of these issues from the WTO rules and yet the EU, through the EPAs is introducing them through the back door. Why? Because growth has stagnated in Europe and EU is desperately looking further afield for new areas of investment and profits for its corporations.
The liberalisation of investments, government procurement, intellectual property and capital accounts of the ACP countries, means that EU investors and businesses, would cherry pick the most lucrative aspects of these sectors, privatise them and extract rent without giving a damn about the negative effective on vital local services such as health, education, communications and transport. In addition, the ACP countries would lose control over the flow of capital out of their countries due to the deregulation of capital accounts.
Loss of revenue from trade taxes
ACP countries depend heavily on the revenues they get from tariffs on imported goods. With the EPAs, the ACP countries would lose this important source of revenue because of the elimination of tariffs on imports from the EU. This loss of revenue would be far greater than the revenue the ACP countries will lose if their exports were excluded from the EU market. This is because currently, the volume of exports from the EU to ACP countries is far more than that of the volume of exports of ACP countries into Europe. With the expansion of the EU to 28 member states, the volume of tariff-free exports from the EU to the ACP countries is going to increase further. In other words, the ACP countries with their weak production base are not competitive enough to derive benefits from the opening up of the European market whilst simultaneously opening up their markets.
Aid For Trade
The EU has proposed to provide Aid to the ACP countries to compensate them for the “adjustment costs” of liberalisation. What are these “adjustment costs” and what is being adjusted to? In ordinary language it means the EU is aware of the profound and long term economic and social devastation (read more unemployment and poverty), that the EPAs are going to wreck on the people of the ACP countries. But the EU is “kind enough” to compensate them with Aid so they can adjust to chronic unemployment and poverty. It needs to be borne in mind that when the manufacturing base of an under-developed country is devastated, it is extremely difficult to rebuild it and this change may well be irreversible.
The promised EU Aid is in the form of financial and technical assistance. With regards to financial assistance the EU has promised to provide 2 billion Euros from the European Development Fund (EDF) to help ACP countries with the costs of adjusting to the EPAs. Some estimates put the actual figures at 700 million Euros to be distributed among 71 ACP countries and some Latin American countries.
Putting aside for a moment this paltry sum of money, what is significant is that, the EU is using Aid as a lever to compel ACP to accept EPAs. Most of these countries are dependent of EU Aid, and are therefore vulnerable to the machinations of the EU. “Aid for Trade” should indeed read, Aid for long term economic and social devastation for ACP countries and a smile all the way to the bank for the EU.
EU technical assistance does not fare any better because it is European consultancy and research firms who would be contracted to provide this assistance. In other words, the so called Aid will go back to the EU in the form of fees to European consultancy and research firms. It is hard to find words to describe this relationship but cynicism comes very close. The EU is in effect, bribing the political elite of ACP countries to sell their countries down the drain for a pittance.
Asymmetrical “Negotiations” and the Global Europe Strategy:
One has to understand the context in which the EPAs has been crafted and foisted on the ACP countries in order to appreciate the objectives of the EU and the implications of the EPAs for the people of the ACP countries. Though the EU is powerful, it is vulnerable to the loss of its markets to emerging countries like Brazil, China, India, Russia and South Africa – the BRICS. To meet this challenge, the EU, led by the then Trade Commissioner, Peter Mandelson, developed its “Global Europe Strategy”. This strategy is driven by a little known secretariat in Brussels called the “Business Europe”. The objectives of the Global Europe Strategy include: a)“Adopt an open and offensive policy on international investment” and b) “Open new markets through bilateral trade and economic agreements”.
Adopting “…an open and offensive policy on international investments”, should be translated as the export of capital to seek ever greater returns for European corporations and banks. The export of capital is one of the key characteristics of imperialism. What is often lost sight of, is that there is also the export of capital from the ACP countries to the Europe in the form of the returns on the investments made by European corporations and banks in the ACP countries. Hence the EU’s export of capital and the opening up of new markets through trade (EPAs) makes its project, an imperialist project.
There is no moment or sustained period during which the 500 years relationship between Europe and the ACP countries has been beneficial to the working people of the ACP countries. Had that been the case, in the case, poverty will be not be rampant in the ACP countries, and a contributing factor to the so-called migrant crises that Europe is facing now. “So-called” because what we are witnessing is really a crisis of world-wide capitalism which manifests as a migrant crisis.
The Migrant Crisis
The EU has made it abundantly clear that its raison d’etre is the promotion and implementation of austerity in Europe. The brutal manner in which the EU dealt with Greece, against the wishes of the Greek people expressed in a referendum, attests to the democratic deficit at the heart of the EU.
For Europe to benefit from the EPAs the ACP countries will have to implement austerity policies to ensure the transfer of resources from the ACP countries to Europe. Millions of people will be thrown out of jobs which will exacerbate poverty in the ACP countries. It should not be hard to imagine why people in this dire situation will want to seek a better life in Europe.
Viewed from this perspective the distinction between refugees and economic migrants becomes bogus. Austerity abroad pushes people to seek better lives. Having created economic, political and social mayhem on the African continent, the EU is disgracefully turning Europe into a fortress to keep black people out. The EU is pursuing a military campaign in the Mediterranean, with the full backing of NATO, to intercept desperate migrants from Libya, send them back and destroy their boats.
The EU’s attempt to police the flow of migrants is simply futile if the push factors are not dealt with. In any case, the 1951 United Nations Convention on Refugees was enacted when most of the countries of the ACP countries were under colonial rule and had no say in it. The Convention was enacted to deal with the refugee crises in Europe in the aftermath of the Second World War. The world of 2016 is significantly different from that of 1951, and yet the European Establishment dogmatically clings to the 1951 definition of refugees.
The failure of the EU to deal with the migrant crises and it depiction of migrants as the problem, will increase racism and xenophobia in Europe. The rise of the far right political parties across Europe is partly a manifestation of this failure. Black and minority ethnic people across in Britain and across Europe will bear the brunt of this increased racism and xenophobia.
It is estimated that migrant workers worldwide remit about $500 billion annually to their countries of origin. This amount it twice the total “Development Aid” provided by developed countries to under-developed countries. The unemployment and poverty that would be unleashed by the EPAs in the ACP countries, could pressurise African-Caribbeans in the UK to remit more money at a time when they themselves are bearing the brunt of the austerity policies that the EU has unleased throughout Europe.
The austerity policies that the EU is implementing in Europe and seeking to implement in the ACP countries through EPAs, is a manifestation of the crisis of capitalism. African-Caribbeans and other minority ethnic people in Europe are bearing the brunt of this austerity. They need to join hands with the working people of the ACP countries in resisting austerity. But resistance is not enough. What is required is a dismantling of the collective imperialist EU project. Britain leaving the EU has the potential to throw the whole EU project into an existential crisis because other European countries are likely to follow suit. The working people of Europe would then be in a position to struggle against capitalism within their various states instead of struggling against the powerful collective capitalism of 28 states which is a much more daunting task. As Dennis Skinner succinctly put it : “My opposition from the very beginning has been on the lines that fighting capitalism state by state is hard enough. It’s even harder when you’re fighting it on the basis of eight states, 10 states and now 28.”
For the above reasons I urge African-Carribeans in the UK to join progressive forces in voting for Britain to leave the EU.