• by Benjamin W. Mkapa
• Monday, April 16, 2012
• Inter Press Service

We live now in a fast-changing world. The paradigm of globalisation and free trade is being questioned. It is now being asked whether state capitalism might be the next model of the day: capitalism guided by the strong hand of the state. As this debate continues, the reality is that the markets of Africa’s major trading partners —the U.S. and EU— are stagnant or even shrinking. On the other hand, our markets are growing, as are the markets of the emerging developing economies, writes Benjamin W. Mkapa, former President of Tanzania and Chairperson of the South Centre.

In September 2011, the European Commission proposed to remove 16 African countries from the European Union (EU) Market Access Regulation 1528/2007. At the end of 2007, this regulation allowed those African countries that had initialed or signed an Economic Partnership Agreement (EPA) to enjoy duty-free access to the EU market as they continued to move towards signing and ratification. This regulation provided the necessary cover for our countries as we continued to negotiate the difficult issues with the EU: for example, export taxes, the level of liberalisation, and development assistance.

The EU's insistence on the elimination of tariffs for 80 percent of trade, restrictions on the use of export taxes and quantitative restrictions, and the standstill clause would undermine Africa's efforts to industrialise and its ability to move up the industrial value chain. As a result, Africa would remain a perpetual supplier of raw materials.

As for the effect on food security and rural livelihoods, the EU has not indicated any willingness to abolish its agricultural subsidies, which constitute major unfair competition against African producers of milk, poultry, pork, beef, cereals, etc.

Regarding the effect on regional trade and integration, regional markets provide the best opportunity for Africa to diversify and develop. If African countries in EPAs have to liberalise 80 percent of trade, Africa's regional markets risk being taken over by EU products. The opportunity to increase intra-African trade, diversity and industrialisation will be significantly reduced.

* Benjamin W. Mkapa is the former President of Tanzania and Chairperson of the South Centre (http://www.southcentre.org ).

© Inter Press Service (2012) — All Rights Reserved. Original source: Inter Press Service

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