Let the Buyer Beware

On Thursday I was in London at the Trade Justice Movement’s rally outside the Embassy of Germany (who currently hold the European Unions’s rotating presidency), followed by visits to each EU embassy, in my case Cyprus. The issue at hand was these fairly obscure, and, you would think, relatively mundane things called Economic Parnership Agreements (EPAs). For those of you not well-versed in international tradfe, EPAs, are essentially bilateral trade deals between the EU as a collective, and individual foreign countries.

As you all probably know,at the core of the EU is economic cooperation between its member countries, which, most of us agree, has on the whole been a pretty good thing. In light of this big, scary globalized super-competitive economy, it certainly makes sense for countries to be bargaining collectively, rather than individually. Because the EU is such a lucrative market for, for example, Chinese textiles or Nigerian cotton, many countries would give their right arm to do a deal to get access to it in a way which they might not if, for example, they were to sign a deal with Wales alone.

The EU is well aware of its strong hand, no more so than when dealing with developing countries, themselves somewhat less enviable position. Woe betide any developing countries which follow our example and band together, of course- in WTO-speak, that’s called price fixing and is strictly prohibited. So all in all, think of EPAs as a bit of a divide-and-rule tactic; they tend to be used as an alternative to more multilateral avenues such as the WTO, where developing countries have had a nasty habit of sticking up for one another in recent years.

And so what do to with all that power? Well, us Europeans have a dirty little secret, the kind of secret which we try to bury below all kinds of sanctimonious language about human rights and democracy, but which is still a bit of an open secret on the world stage. We really like to run other people’s countries. Been doing it for years, centuries even. And so, being Europeans, we simply can’t resist using EPAs as an opportunity to build in all kinds of nifty extra clauses which interfere with the running of the countries we deal with. We can, for example, require the privatization of state owned goods and services (such as water, electricity and even, in some cases education and healthcare), the ending subsidies for certain industries, and and pretty much anything else we’d like to add. A bit like a the highwayman who humiliates you by making you dance in the middle of the road in your undies, just before making off with your handbag.

f the guys in Brussels decide that they’d like everybody in Zambia to wear polka dotted t-shirts on the first Wednesday of every month in return for the right to sell Zambian peanuts within the EU, then who is Zambia to argue? The same principle applies to selling off government owned assets such as the water supply and other public utilities to private (and, funnily enough, often European) ownership.

In the UK, everyone remembers, and some still live with, the kind of upheaval which resulted when British Rail, BT, British Gas etc were all privatised, when certain subsidies and benefits have been changed and when other major changes to the British economy have taken place. Imagine similar changes being demanded of a developing country, and it’s understandable that before committing to some of this stuff, Zambia and others would like the opportunity to work out exactly what the impact of these changes will be.

So how long is Zambia getting to consider the impact of their EPA on their economy? Well, here’s the punch line. They’ve got until next month to sign on the dotted line, or they’ll face penalties which include massive cuts in aid. In other words, they’re damned if they do, damned if they don’t. Damned if they sign up to a trade deal which is so clearly rigged in the EU’s favour, forcing them into major changes to their own economies in which they’ve had no say or time to consider. Damned if they don’t, for the simple reason that if they don’t sign, aid gets cut and they may have lost a rare chance to get badly needed access to foreign markets.

Of course, this is nothing new, tactics have just slightly changed. A few years ago, everybody was pinning their hopes on doing much the same thing through the World Trade Organization, on a multilateral basis. When, thanks partly to bickering between the EU and US, and partly due to pressure from campaigners worldwide, those talks stalled, the EU has therefore been forced to change tack. The new strategy is to make these deals on a bilateral basis, using the clout of the EU to pick off the developing countries one by one.

If this was a gangster movie, you’d at least be impressed by their sheer audacity, resourcefulness and lack of scruples, and after all this, nobody should doubt the EU’s commitment to securing rock-bottom prices for the British consumer. Of course everyone loves scrambling for cheap underpants at Primark, but the question is, at what price?