EPAs pose a threat to food sovereignty

Agriculture

Millennium Development Goal 1: Eradicate extreme poverty and hunger

 

 

The number of undernourished people in Africa increased from 165 million in 1990 to 209 million in 2006. Most African states obtain poor scores on the Global Hunger Index[1] and will not be able to reach the Millennium Development Goal to halve the number of people suffering from hunger by 2015. Economic Partnership Agreements (EPAs) risk to worsen the situation in spite of article 3.3 of the EU directive for the negotiation of EPAs with ACP countries and regions stating that “[t]he agreement shall include provisions aimed at fostering food security in accordance with WTO rules".

 

The threats are related to the inability of domestic production in Africa to compete with EU agricultural imports, the potential restrictions on African governments to address import surges that could undermine local food production, and the limitations on the freedom of ACP countries to use tariff policy and market regulation more generally to promote the domestic supply of staple foods.

 

The potential negative impacts of greater trade liberalisation on smallholder farmers in the ACP countries, especially given unfair competition with highly subsidized EU production, was raised among others on a number of occasions by the former UN Special Rapporteur on the right to food, Jean Ziegler. He also queried whether eliminating tariffs on EU imports might jeopardize government funding for social programmes and thereby threaten governments’ ability to meet their obligations in terms of economic, social and cultural rights, including the right to food[2].

 

Elimination of tariffs and food sovereignty

 

Lower or no tariffs on imported goods[3] will encourage greater imports, leading to pressures for local food producers who might lose their livelihoods without finding other forms of employment. This is particularly relevant given that the large majority of Africans are still employed in the agricultural sector.[4]

 

African countries have been able to exempt some agricultural products from tariff liberalisation in the EPA negotiations. These products will therefore not face competition from European products entering the local markets duty-free. However, the remaining agricultural products will face the competition from European goods, which could force the local producers out of the market.

 

The tariffs currently applied by African countries take into account that importing some agricultural products is more important than others for their country. In Cameroon, for example, tariffs on imported foodstuffs generally range from 20-30%, but are specifically lowered to 5% for milk powder and broken rice imports which suggests that the government had particular policy objectives in mind when setting these tariffs. The same pattern is evident in Ghana where most tariffs on food imports range from 10-20% but are specifically lowered to 5% for milk powder and wheat meal.

 

All EPAs include a standstill provision which stipulates that no new customs duties shall be introduced on trade with the EU, nor those already applied increased, once the agreement has come into force. The main effect of this provision is to add a discipline to prevent EPA states from also raising tariffs on products not scheduled for liberalisation. In some agreements (SADC[5], Caribbean and Pacific) this discipline does not apply because the standstill clause only applies to products subject to liberalisation.

 

Agrifood exports have fallen as a share of total ACP exports to the EU from 27% of the total basket to 16% between 1996/97 and 2006/07. There has been a gradual diversification of ACP export destinations away from the EU, with the EU’s share falling from 55% to 46% over this period. Partly because of this, the ACP share in total EU imports fell from 15% to 13% during this period. As for imports, the EU accounts for 26% of ACP agrifood imports. These make up around 10% of all ACP imports from the EU, and account for 8% of total EU agrifood exports.

 

Dangerous provisions in EPAs

 

EPAs also contain provisions on border measures which some fear may restrict the ability of ACP countries to ensure food sovereignty in the future. Norms limiting the use of quantitative restrictions, export taxes and safeguards will reduce the policy space available to ACP governments. There are subtle, but potentially important, differences in the commitments undertaken by countries in each region.

 

All EPAs contain provisions dealing with the ‘prohibition of quantitative restrictions’, which require African countries to eliminate, as soon as the agreement comes into force, all quantitative restrictions on imports and exports. This will prevent some ACP countries from pursuing currently successful agricultural development and food sovereignty policies.

 

Namibia for example has a scheme of market regulation for specifically-defined ‘controlled products’, which involves a reference price mechanism backed up by import controls through import licensing administered by the Namibian Agronomic Board. Whole-grain (white) maize, wheat, pearl millet (mahangu) and their milled products are controlled crops in Namibia and subject to seasonal import restrictions under which no import licences are issued until all domestic production has been sold. Normally, the import of wheat flour into Namibia is prohibited although imports may be permitted, depending on market conditions. The restriction is aimed at promoting the domestic processing industry.

 

The World Trade Organisation (WTO) foresees a limited number of specific cases where exemptions from the general prohibition on quantitative restrictions are possible. Most EPAs (ESA[6], West Africa, Central Africa, Caribbieans and Pacific) do not allow for even these limited exemptions. The EAC[7] Agreement permits the use of temporary export restrictions to address a critical shortage of foodstuffs or other essential products, while only the SADC Agreement incorporates the full range of WTO exemptions. Signatories of the other Agreements no longer have the right to impose temporary export restrictions on exports to the EU as part of a measure to help keep the domestic price of foodstuffs below the world price level during a price spike such as occurred in 2007-08.

 

All EPAs also prohibit the introduction of new or increased export taxes on trade with the EU. Therefore this policy tool can no longer be used to stimulate value added processing in ways which expand income earning opportunities in rural areas, or protect domestic food supplies in periods of high world food prices.

 

Some Agreements list exceptional circumstances where the EPA States may introduce, after consultation with the EU, temporary export taxes or charges on a limited number of products where justified by specific needs. However, it would be very difficult and time-consuming to make use of these  measures, as the prior consent of the EU is needed and an effective case has to be made to obtain the consent. Furthermore, the measures would have to be limited in time.

 

As the use of export taxes is not formally disciplined under WTO agreements, ACP countries have gone beyond their WTO obligations by accepting a provision which prevents them from introducing new or increasing existing export taxes on their exports to the EU.

 

Conclusions

 

EPAs contain a series of provisions which pose a threat to the food sovereignty of African countries. They will be forced to open parts of their markets to international competition putting local producers at risk. A greater dependency on international markets for food also means that African countries will rely on volatile and uncertain imports for a significant proportion of a country’s food supplies. To make things worse, African countries have accepted provisions which will no longer allow them to take advantage of those few safeguards provided by the WTO to protect their own endangered food sovereignty. By putting Africa's food sovereignty at risk, EPAs also make it even more difficult to attain the MDG 1 objective of halving hunger by 2015.

 

 

Thomas Lazzeri

 



[1] http://www.ifpri.org/publication/2011-global-hunger-index

[2] United Nations Human Rights Council, 2008. Report of the Special Rapporteur on the right to food, Jean Ziegler

[3] Tariffs are the duties, which have to be paid when goods are imported.

[4] Matthews, A., 2010, Economic Partnership Agreements and Food Security.

[5] SADC: Southern African Development Community

[6] ESA: Eastern and Southern Africa

[7] EAC: East African Community

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