EPA, a veritable Hobson’s choice, Mr Mandelson

E. Ablorh-Odjidja, Ghanadot

September 30, 2007

The economic Partnership Agreement (EPA) between the EU and Third World countries is to take effect beginning 2008. With it, The EU hopes to create trade reciprocity with developing nations.

Reciprocity is the word used, but in reality, the phrase "Hobson's Choice" will be a better description for the proposal. 

Invariably, in a "Hobson's Choice” situation the recipient of the proposed has no choice at all.  That choice has already been reduced to one by the proponent.   

The sad part of the proposal is the trick has already been played under colonialism.  Mr. Mandelson is, therefore, actually on an arm-twisting tour in an attempt to get Third World recipients to accept what has already been successfully tested and proven useful for Europeans under colonialism.

By the EPA agreement, rich European countries can sell more of their manufactured goods to partnership countries (poor countries), while the latter countries get access for raw materials exports to Europe.

Though touted as a new trade arrangement to end poverty in the Third World, this EPA arrangement will not.  If anything, it will help cement the poverty in place.

The "reciprocity" nomenclature raised in the proposal brings into question the value of what developing countries of the Third World get in return.

For answer, Third World countries can look at the supposed European partners and their agricultural sector support under the EPA umbrella.   The imbalance in trade is there and already established.   

The EU subsidizes heavily her farmers to produce cheaply some agricultural products that can easily be produced by Third World partners. 

Not only do they produce massively farm products like corn, wheat, tomatoes and cotton, but their other industries have such dominance that Africa cannot match.

Economically, Africa has no match for what is produced on the farms in Europe or what comes from European factories.  As such, it is impossible for true reciprocity to take place between the two worlds without some concessions first.

The EPA grants none.  Stated bluntly, the two worlds are not on equal footing at either end of the trading sphere.  So, what decides how the trade game is played?

One cannot trade bananas for tractors or lifesaving pharmaceuticals for cocoa beans and claim he is on equal footing with his trading partner, especially when in the relationship he is designated by circumstances as a price taker and not the maker.

But this is how the game has been played for ages, the old game of colonial reciprocity.  And the EPA seeks to revisit it!

It is demanding that Third World countries, mostly former European colonies, sign this EPA agreement or perish by the end of January 2008.

As reported in Ghanadot.com, on Sept. 19, Mr Peter Mandelson, the EU Trade Commissioner, “warned that there would be no legal basis for the extension of existing preferential trade terms between the EU and the 78 African, Caribbean and Pacific countries if the two sides do not initial new Economic Partnership Agreements (EPA) before the end of 2007.”

The threat in Mr. Mendelson statement was real; except, the developing nations are not rushing to the table with pens ready.

On September 27, 2007, Mr. Mendelson was ready to repeat his warning in an on-line BBC publication that said “former European colonies ..could miss out if they do not sign up to new trade deals” and that “those who relied on exports of goods such as bananas and fish faced a risk to their livelihoods.”

The cruel message was directed at a constituency of exporters in the Third World for whom non-compliance with EPA agreement would hurt most.  

The intent, obviously of course, was meant to prod these constituencies to put political pressure on their governments at home; the very governments in the Third World the EU was pretending to be negotiating with in good faith.

The EU unethical hand is everywhere in the media, pushing and prodding and can no longer be concealed.

Since 2001, Third World governments have been demanding, in exchange for a fair trade deal, for the EU to lower trade barriers and remove subsidies paid to farmers, some say to the tune of some $300 billion a year.

But as evidenced by the EPA proposal their effort has been to no avail.  Instead, through the EPA the EU has revealed a more zeal in her unwillingness to end lush subsidies to her rich farmers.

Truth be told, ending farm subsidies in Europe would boost agricultural production and help end poverty faster in the Third World than anything the EPA has to offer. Rather, it aims to exploit the Third World in order to enrich Europe as was done in the colonial days.

In the so-called good colonial days of old, there were no barriers to the flow of trade.  There were seamless exports of finished goods to markets in dependent colonies in return for raw materials from the colonies to Europe; a complete market integration with the colonial master in charge as a forced condition of colonialism. 

This old system is what the EU seeks to replicate, a trick labeled as “comparative advantage” under the EPA.  And as of the old, Europe will hold the advantage at both export and import ends. 

In the true sense of a “comparative advantage,” Africa would have been dominant in agriculture.  But here is Europe subsidizing heavily her farmers, thereby nullifying the advantage.  Then, hypocritically, she comes to seek a trade arrangement that further seals the advantages that she has historically had.

The EPA would open the door in Third World countries for the EU to flood their markets with cheap finished products from their modern factories, including canned agricultural products.  Meanwhile, the door to Europe will be open to raw materials for the Third World, the pricing for which Europe already controls.  If this system cleverly labeled as "comparative advantage" is not an imbalance, then I don’t know what is.

Good old Hobson could not have improved on the inherent audacity of this EPA arrangement.  But it shouldn’t take much to figure out who wins.  The colonial dependency, disturbed by the granting of independence, is about to be reinstated under a different name, EPA.

Threat from Mr. Mandelson aside, if only Africa could have a common market, it could then say to him that “any imposition of tariff by Europe on our products would result in an imposition of same on all of yours.” 

Africa has other options for other markets, like India, Chinese, Japan, American and others who decide to play fair.

E. Ablorh-Odjidja, Publisher www.ghanadot.com, Washington, DC, September 30, 2007.
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