Download European Parliament Committee on International Trade and

European Parliament
Committee on International Trade and Subcommittee on Human Rights
Hearing of 14 July 2015
Human rights conditionalities in the context of
regional trade agreements with African countries
From the claimed primacy of human rights in the EPAs
to the actual primacy of the EU exporters' interests
Jacques Berthelot, Solidarité (France)
Given the limited time, I will focus on the West Africa's Economic Partnership
Agreement (EPA) and do not challenge the EU's claim to condition its
commitments to the respect of human rights. This conditionality has been in all the
EU free trade agreements for more than 30 years but has never been respected.
The EU has even granted the GSP+ (Generalised System of Preferences +)' status
to Pakistan, world champion of the violation of women's rights and had granted it
to Honduras, world champion of the per capita rate of assassinations, of which no
count was taken to sign the FTA in 2012, or Colombia with the violations of
human rights by the paramilitary. At least the USA have excluded from the just
renewed AGOA on 29 June, 10 countries for their violation of human rights
(Erythrea, Sudan, South-Sudan, Congo Kinshasa, Gambia, Equatorial Guinea,
Somalia, Swaziland, Zimbabwe, Central Africa Republic). Incidentally the new
AGOA claims to "Address unfair practices by the European Union that condition
African access to the European market on signing imbalanced and substandard
trade agreements".
The only question is that the EPA, by reducing drastically the fiscal revenues of
West Africa's States, would reduce their budgets on education, health, small
farmers, environment protection, and the number of boat people drowned in the
Mediterranean would explode. All the more that West Africa is already facing a
triple challenge: demographic, on global warming and food deficit. Said otherwise
it is first the EU which, through the EPA, would violate the human rights in West
Africa and more broadly in ACP countries. I will highlight 4 main reasons why
implementing the EPA would worsen the human rights in West Africa.
1) The huge loss of customs duties
Focusing on Nigeria, the methodology and findings of the World Bank's study of
2014 quoted by Ms. Gallina the 23 June are flawed. To say that the loss of
customs duties would be limited to 0.8% of budget revenues is not serious with a
fixed production over 20 years, which is absurd as the West African population
would increase by 67% from 2015 to 2035 and that of Nigeria by 69%. West
Africa's population would equal that of the EU in March 2031 and will exceed it
by 55%, at 814 million, in 2050.
The World Bank neither calculates the customs duties losses due to trade diversion
in favor of imports from the EU nor the losses on the value added tax on imports.
The South Centre has redone the calculations that solidarité has completed on the
basis of imports in 2014. Annual losses for West Africa would jump from €1.3
billion in 2020 to €3.3 billion in 2035, with a cumulative loss of €45.6 billion in
2035 with a fixed population but of €58 billion given the population increase, of
which the least developed countries (LDCs) would account for €21 billion in 2035
with a fixed population and €26 billion taking into account its increase.
Faced with these huge losses, the EU compensatory aid foreseen in Article 60 of
the EPA is even more unrealistic that Jean-Pierre Halkin of the DG DEVCO
confirmed the 23 June that there would not be any additional support for the EPA
but only a retargeting of the €6.5 billion from the EU budget, the 11th EDF
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(European Development Fund) and EIB (European Investment Bank)'s loans. The
enormity of losses makes also unrealistic a compensatory rise in internal taxation.
The end result would be sharp declines in public spending for education, health
and agriculture, the more so as the Agreement on Trade Facilitation will force to
devote large resources to port infrastructures that would make imported products
more competitive.
2) The EPA would increase poverty, particularly of farmers
The World Bank study of 2014 on Nigeria anticipating a 0.3% increase in
consumer gains is also unrealistic. This would come from lower prices of imported
products from the EU, especially food products, which will reduce the price of
local cereals, tubers and milk and impoverish the majority of farmers and
ranchers, who account for 61% of the population. The more so as, contrary to what
said Ms Gallina and Mr Sow the 23 June, 34% of food products are not excluded
from liberalization in West Africa, of which cereals excluding rice and milk
powder for which the import duty would drop from 5% to 0 already in 2020. Now
69% of Nigerians live below the poverty line of $1 a day and 80% are in rural
areas. And the EU exports of cereals, meat and dairy to West Africa benefited in
2013 of €449 million in subsidies. The EU claims that it is no longer using any
export subsidy, forgetting that the WTO Appellate Body has ruled four times – in
2001 and 2002 for Canadian dairy products and in 2005 for US Cotton and EU
Sugar – that domestic subsidies, including decoupled ones, to exported products
have a dumping effect.
On the other hand Ms Gallina did not mention the Nigerian researchers' study of
April 2014, requested by the EU Commission, on the basis also of the EPA text,
concluding to a very negative impact, with a 5% fall in budget revenues, a 15%
rise in unemployment and a 2% fall in GDP. Now the 2 studies of the World Bank
and Nigerian researchers were made before the collapse of oil prices and the IMF
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anticipates now a 60% collapse in oil revenues in 2015, greatly reducing public
investment and growth. Coupled with the rise in military spending to fight Boko
Haram – which will recruit more with the rise in poverty – this can only reduce
spending on health, education and agriculture, undermining human rights.
3) The WTO rules respect better human rights that the EPAs
If the end of EU trade preferences for ACPs is due to the complaint of Latin
American producers of "dollar bananas" at the WTO, the "banana war" was buried
by the Agreement of 19 December 2009 at the WTO, the EU duties on bananas
being reduced to €114 in 2017 and even to €75 in 2020 after the 2012 bilateral
agreements with 6 countries of Central America and with Colombia and Peru,
joined by Ecuador in 2014.These countries would no longer oppose a WTO
waiver to return to Lomé's trade preferences, based on the large disparity in living
standards between West Africa's countries and the EU, the more so as she got a
waiver for Moldova since 2008, although its per capita GDP is much higher. The
EU could also support the request by the African Union that West Africa be
recognized as a "large LDC" because 12 of its 16 states are LDCs and as the
average indicator for the 16 States respect those of LDCs.
Demanding that West Africa reduces its duties on 80% of EU exports not only
contradicts its decision "Everything But Arms" of 2001 but also all WTO
agreements that do not require reciprocal trade for LDCs. The EPAs should
therefore deduct from the 80% of market opening the LDCs' share of imports from
the EU, which, for 2012, would make an opening rate of 39% for West Africa and
30% for East Africa.
The ACP countries should not conclude the EPAs before finalizing the Doha
Round on the basis of the agricultural modalities of 6 December 2008 because the
safeguards (Special Products and the Special Sagfeguard Mechanism) are much
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higher than in the EPA. And the EU should support the ECOWAS' request to
become a full WTO member and get bound tariffs at the weighted average bound
tariffs of its members, so as to negotiate at the WTO on their behalf.
Finally the multiplication of EU bilateral free trade agreements would increase the
preference erosion for West Africa on the EU market.
4°) Why then impose the EPA? Because of the European firms' pressures on
the West Africa States
We cannot minimize the pressures made by major European corporations on West
Africa's States to impose the EPA. The Compagnie Fruitière, which owns and
exports most bananas and pineapples from Ivory Coast and Ghana lobbied to not
pay the GSP duties on exports of 2014 if the EPA is not implemented. The
Mimran Group, owner of the Great Mills of Abidjan and Dakar, got that the 5%
duty of the ECOWAS' common external tariff on cereals (excluding rice) be
eliminated from 2020. The Bolloré group, which rules most of the port
infrastructures in the Gulf of Guinea is involved in the export of 65% of cocoa
from Ivory Coast.
In total, there are €164 million of GSP duties that exporters of Ivory Coast, Ghana
and Nigeria intend to avoid if the EPA is not implemented, on the basis of their
exports of 2014. These GSP duties represent only 4.4% of the losses of duties on
West African imports from the EU if the EPA is implemented, which explains the
request of West Africa's civil society that the 16 West Africa's States get together
to reimburse these €164 million to the exporters of the 3 States, a contribution
limited to 2.2% of their extra-West Africa's imports.
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