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to do so would indicate that the state was dysfunctional and would justify the European Union withdrawing its support. Thus, the respect for national sovereignty that once took the form of an almost boundless trust in the recipient governments is evolving into an approach guided by considerations of efficiency. So the Commission would take over the role of sovereign ACP governments in designing policy? More than that – it would insist on an agenda that it knew would radically transform economic, social and political life in ACP countries and that was likely to provoke the downfall of governments that implemented it: As far as the ACP States are concerned, the necessary changes and reforms will not be made without a radical transformation of political and social structures. EU support measures for economic policies and institutional reforms may have major political repercussions on these countries. “What does one do if the EU and the other multilateral and bilateral donors that wish to dictate economic policy are wrong and the policies that are being suggested create only social upheaval and not the economic good that is promised?” (Grynberg, 1997) What were ‘sovereign’ ACP governments meant to do if people revolted against this agenda? Hold firm, if they wanted to keep receiving aid from the European Union: Experience of past cooperation has furthermore shown that this [EU] support is appropriate only when certain conditions – primarily political – are met. Strengthening the political dialogue is now a condition of increased effectiveness of all ACP/EU cooperation: a stronger political relationship which allows essential issues such as good governance, democratisation and human rights to be tackled in a less formalistic, franker and hence more efficient manner now seems to be absolutely necessary if Europe wishes to give its cooperation policy a greater chance of success. But this whole approach is a denial of democracy! The Green Paper conceded that there was a tension between neoliberalism and democracy, because ‘the short term social cost may disappoint voters’. When governments are faced with political and social instability and persistent difficulties in implementing economic policies, they find it difficult to stay on track. But the dual process of economic and political transformation must still proceed. The ‘incentive-based’ approach to aid means that ‘performance criteria for political and economic life would come into play alongside social and economic indicators and levels of poverty’. ‘Selectiveness’ of aid should reflect not only countries’ needs but also their ‘institutional and policy choices’. In other words, governments that stand firm should be rewarded. How could the European Union reconcile that approach with respect for state sovereignty? Because it only pays lip service to sovereignty. The Green Paper treats the nation state as the major obstacle to be overcome by narrowing the ACP governments’ policy space and removing their discretion. It even suggested the EU, along with other donors, should consider ‘giving more strategic backing’ to securing political change that limits the role of the state, including orchestrating support ‘on the ground’ to overcome the resistance of élites. Isn’t that a valid consideration in ACP countries that are governed by corrupt élites? There is a world of difference between empowering the mass of people in ACP countries to determine their own political and economic future, and former colonial powers imposing a self-interested economic policy agenda through indirect economic rule. Who would take responsibility when the Europeans’ plan for the ACP went wrong? Tetteh Hormeku from Third World Network Africa remarks on how the European Union claimed the right to dictate the agenda, but disavowed any responsibility for the consequences: Lomé was unrealistic, but not for the reasons advanced by the Paper. It was unrealistic because it expected countries to diversify, etc. within a framework through which … Europe sought to retain these countries as providers of raw materials and overseas markets. Now it sought to ‘rectify’ those failures to meet its changed strategic interests, with no responsibility for the new failures that will result. 18 A People’s Guide To The Pacific’s Economic Partnership Agreement
6 Clearing a Path for Free Trade What did the European Union want to put in place of the Lomé trade preferences? The Green Paper said the way to strengthen the participation of ACP countries in the global economy was to embrace two-way (reciprocal) free trade. Opening their markets and allowing unrestricted foreign investment offered the ACP greater opportunities for growth than continuing to rely on non-reciprocal tariff preferences. So ACP countries would be better off by giving Europe’s exporters access to their markets? This is the standard argument used to support free trade. Competition from European products would force ACP economies to restructure, become more efficient and focus on their ‘comparative advantage’, so they could then compete in the global economy. Many products would become cheaper for consumers and producers who relied on imported inputs. The value of Lomé preferences was eroding anyway, because the European Union was giving preferences to non-APEC countries through other trade agreements. The Green Paper also claimed that trade preferences had failed to deliver meaningful gains to ACP countries, at least in recent years. Is it true that Lomé’s trade preferences were ineffective? No. Where the margin of preference over the tariffs that were imposed on imports from other countries was large enough, ACP countries had established or maintained a place in the market. The problem arose when the European Union began lowering its tariffs to other countries and reduced the value of the preferences. The preferences for canned tuna into the European Union (and garments into Australia and New Zealand under SPARTECA) have been especially effective for the Pacific Islands. “It is immoral for the EU to misuse its economic strength to dictate clearly unfavourable terms to the ACP.” (International Development Committee, British House of Commons, 1998) Wasn’t there also a WTO ruling against the Lomé preferences? That wasn’t the Green Paper’s main argument for change back in 1996, but it has become critically important since then. The issue was whether the Lomé preferences to ACP banana producers were in breach of the General Agreement on Tariffs and Trade (GATT). The European Commission had been able to block any such findings under the old GATT dispute system, which gave it a power of veto. That veto was removed when the WTO was created in 1995. When it lost a challenge to the banana preferences under the WTO, the Commission said the whole Lomé regime had to go and be replaced by a new ‘WTO-compatible’ regime. It asked the WTO for a temporary ‘waiver’ for the Lomé arrangements until December 2007 - the deadline the European Commission insisted on during the negotiations for Cotonou. What alternatives to Lomé did the Commission put forward in the Green Paper? There were 4 options, all of which had to be made ‘WTO-compatible’. The Commission clearly favoured number 4: 1. The status quo – to retain the current one-way preferences for the longer term. That would require the European Commission to seek a further waiver from the WTO, if it had the political will to do so, and other WTO Members would demand concessions from the European Union in return. 2. General System of Preferences – this is a WTO-approved system that allows a ‘developed’ country (the EU) to grant preferences to ‘developing’ countries (ACP and non-ACP) on a non-discriminatory basis. The kind and extent of preferences it gives under GSP is discretionary and can be withdrawn unilaterally. 3. Uniform reciprocity – all ACP countries would give the EU the same treatment as the EU gives them. There would be no preferences and no special treatment for the poorest Least Developed Countries (LDCs), who are a majority in the ACP. This option would comply fully with the WTO rules and not need approval. 4. Differentiated reciprocity - different regional groupings within the ACP could strike their own deals with the European Union, reflecting varying degrees of special and differential treatment for ‘developing’ countries and LDCs. This would allow the European Commission to pick and choose which groups of countries it would negotiate with, on what terms and provide lots of scope to divide and rule. It would be possible for Least Developed Countries to opt out and rely on another arrangement, known as Everything But Arms, that allows tariff free entry to the European Union for most goods without requiring reciprocity. However, special treatment for any new grouping, such as small vulnerable island economies, would need WTO approval. A People’s Guide To The Pacific’s Economic Partnership Agreement 19
Page 1 and 2: A PEOPLE’S GUIDE TO THE PACIFIC
Page 3 and 4: Foreword One of the callings of the
Page 5 and 6: Table of Contents Foreword Preface
Page 7 and 8: Abbreviations ACP African, Caribbea
Page 9 and 10: Spirituality, family life, traditio
Page 11 and 12: The description of reciprocal trade
Page 13 and 14: 2 The Lomé Convention Did the same
Page 15 and 16: 3 African, Caribbean & Pacific Soli
Page 17: 5 Europe’s New Plan for the ACP W
Page 21 and 22: 8 The European Union’s Base Line
Page 23 and 24: 9 The ACP on the Back Foot When and
Page 25 and 26: compromise ‘good governance’ wa
Page 27 and 28: Is there another way of interpretin
Page 29 and 30: That sounds pretty watertight. It i
Page 31 and 32: 14 Capturing the ACP’S Services W
Page 33 and 34: 15 ‘New Issues’ through the Bac
Page 35 and 36: 17 Phase 1 Negotiations It sounds l
Page 37 and 38: 18 Unequal Partnership In Practice
Page 39 and 40: 19 Learning from Others’ Experien
Page 41 and 42: 20 Europe’s Quest for Legitimacy
Page 43 and 44: PART TWO The Pacific’s Regional E
Page 45 and 46: 21 The Pacific Negotiating Context
Page 47 and 48: 22 The Domino Effect of a Pacific E
Page 49 and 50: to establish probable coverage, con
Page 51 and 52: unskilled services workers into the
Page 53 and 54: sector acting ‘in their personal
Page 55 and 56: Is the Commission prepared to come
Page 57 and 58: 28 (No) Goods What might a Pacific
Page 59 and 60: will probably approve this, especia
Page 61 and 62: PART FOUR of Origin that have to be
Page 63 and 64: 32 Tourism What kind of tourism do
Page 65 and 66: contracts. They are usually paid th
Page 67 and 68: PART THREE Another Way Forward KEY
Page 69 and 70:
“Studies ‘confirm the absence o
Page 71 and 72:
“It is not true that ACP countrie
Page 73 and 74:
$ We strongly support the stand of
Page 75 and 76:
“The power of the churches’ spi
Page 77 and 78:
Appendix I: Regional Pacific ACP Ne
Page 79 and 80:
Appendix III: Pacific Island Forum
Page 81 and 82:
Appendix VI: Selected References Ac
Page 83 and 84:
Nalunga, Jane, ‘Eastern and South
Page 85:
A People’s Guide To The Pacific
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