Three land-locked countries, Botswana, Lesotho and Swaziland who are members of the South African Customs Union (SACU) recently signed an economic partnership agreement with the European Union (EU) without taking into their confidence fellow members of SACU, Southern African Development Conference (SADC) and Community of East and Southern African Countries (COMESA). The EU is known to twist the arms of and browbeat some poor countries into signing these Economic Partnership Agreements (EPA’s). However it doesn’t seem that these three SADC countries were intimidated into signing the agreements.
The President of Botswana, Mr. Ian Khama, recently defied the African Union resolution and announced that he would hand in Sudan President Omar al-Bashir to the International Criminal Court (ICC). This is certainly personal view of the President of Botswana and not that of the government of Botswana, since the matter was not even tabled in the Botswana Parliament.
It is also not far-fetched that he was responsible for entering into an economic partnership agreement with the EU without a debate in his country’s parliament. Swaziland is also under despotic rule and as such the decision was made by the absolute monarch. Lesotho is politically unstable and its Prime Minister cannot claim he is popular because, very recently, he survived an assassination plot and a coup. Therefore, it can be concluded that the move by these countries to sign an EPA with the whole continent of Europe does not enjoy popular support in those countries.
There was a regional meeting of East and Southern African (ESA) countries in Victoria Falls, Zimbabwe, in June, to iron out some sticking points in the EPA’s and to come up with a common position in the interest of economic unity and cohesion in these regions. However, Botswana, Lesotho and Swaziland undermined this progressive African solidarity effort.
Officials of the East and Southern African countries were prepared to sign the EPA’s and already discussing the dates of such a ceremony even though there were outstanding contentious issues in the interim EPA’s. However, Botswana, Lesotho and Swaziland undermined this progressive African solidarity effort.
Contentious issues involve far reaching commitments on tariffs reductions, the freezing of export taxes that East and Southern African countries have been using, the requirement that ESA countries should not increase duties on products from the EU beyond what they have been applying (standstill clause), substantially liberalizing all trade, bilateral safeguards (for infant industry protection). All these issues are still under negotiations. Where would revenue come from when tariffs are reduced and export taxes frozen when there is such high rate of unemployment? Liberalization is a fancy word for opening one’s markets to the rapacious multinational corporations of EU countries when European countries and the United States themselves practice protectionism and subsidize their farmers and deny African countries access to their markets.
European countries have insisted that the first priority should be the signature of the interim EPA. Their main interest is in market access which they may achieve in interim EPA’s. This limits the scope of focusing on the real issues of interest to ESA countries that requires attention before signing. ESA countries were advised to resist the pressure of rushing to sign the interim EPA when it is clear that they will be mortgaging national and public assets to the European Community.
Africa remains a marginal player in world trade (6% in 1980 and 3% in 2008) since the continent’s trade structure still lacks diversity in terms of production and exports. As such, negotiations to ‘liberalize’ their economies will be a futile and possibly suicidal exercise until certain prerequisites are met and instituted within their economies. The emphasis on trade liberalization alone as a means to stimulating growth and development is misplaced.
The United Nations Conference on Trade and Development put forward as prerequisites on addressing the structural constraints in ESA countries the following:
- Increased public investment in research and development, rural infrastructure including roads, health and education;
- Overhauling the basic productive infrastructure to make production more reliable. Power generation, water supply and telecommunications are three key areas that need attention. In addition, building a competitive manufacturing sector will require strengthening of the support infrastructure needs for exporting, including roads, railways and port facilities; and
- Encouraging cross-border trade infrastructure.
The manufacturing sector in Africa will not grow to a competitive level if it is limited to small domestic markets. The trio, Botswana, Lesotho and Swaziland ignored these important advices by the Southern and Eastern African Trade Information and Negotiations Institute, a reputable institute in Africa and the world at large.
By Sam Ditshego