Implications of the European Union (EU)-African, Caribbean, and Pacific Partnership Agreements on Economic Nationalism: The Case of Zimbabwe

Implications of the European Union (EU)-African, Caribbean, and Pacific Partnership Agreements on Economic Nationalism: The Case of Zimbabwe

Jeffrey Kurebwa (Bindura University of Science Education, Zimbabwe) and Shamiso Yikoniko (Bindura University of Science Education, Zimbabwe)
DOI: 10.4018/978-1-5225-7561-0.ch008

Abstract

This chapter seeks to understand the EU-ACP trade relations under the economic partnership agreement (EPA) arrangement and its implications on economic nationalism of developing nations with specific reference to Zimbabwe. The research strongly leans on the view that EPAs have little or no economic benefit to the ACP. Even though the EU tagged the ensuing trade relationship with the ACP as partnership, in the real sense, it is more of paternalism. This is especially so as the EU dictates the terms and the pace of the negotiation, owns the incentives (in the form of aid and technical assistance), and either dispenses or withdraws it at will, depending on the “behavior” of the ACP countries. In order to benefit from EPAs, ACP countries must fund their own economies. ACP states should also address internal political challenges before committing to multiple economic fronts such as the EPAs.
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Introduction

The European Union (EU)’s trading relations with the seventy seven members of the African, Caribbean and Pacific (ACP) countries have historically been framed by a series of conventions. Some of the conventions granted unilateral preference to the ACP countries on the EU market using the Most Favoured Nation (MFN) principle which states that a nation will choose who it wants to offer trade preferences (Fontagné, Laborde, and Mitaritonna, 2008). Although the ACP countries are among the most vulnerable countries in the global trading system, the conventions nevertheless violated World Trade Organisation (WTO) rules as they established unfair discrimination between developing countries and therefore a change was required.

The pace of globalisation is increasing, with unprecedented flows of goods, services and people between countries and companies. Levels of overseas investment and foreign ownership have risen dramatically, alongside far-reaching changes in technology, production and corporate organisation. National economies and companies are becoming ever more interdependent, and emerging economies such as China and India are competing in world markets in a way that few could have imagined in the 20th century (Cooper, 2007).

For the purposes of negotiations, the seventy seven ACP countries have been grouped into six negotiation regions (West Africa, Central Africa, Eastern and Southern Africa, the Caribbean and the Pacific) based on existing regional integration institutions (Heron and Siles- Brügge, 2011). All these regions established Free Trade Areas (FTA) for goods between the EU and various ACP countries that are compatible with the provisions of Article XXIV of GATT. The objectives of this study are to assess the impact of EPAs in ACP economies, analyse the regional economic trade agreements for ACP countries under the EU-EPAs arrangement and to understand the benefits of EPAs to ACP countries.

ACP States have consistently noted that the European Union has not given adequate attention to the development chapters in the interim EPAs.42 Many ACP States have expressed reservations at the heavy pressure from the European Union to sign EPAs even while they may not represent the best interests of ACP countries. The EPAs were scheduled to be implemented by 1 January 2008. However, owing to lack of agreement in negotiations between the European Union and ACP, the EPAs were not concluded within the specified period and both parties decided to enter into “interim agreements” instead that conformed to WTO rules on trade in goods (European Commission, 2017).

EPAs were introduced to resolve non-reciprocity and the Generalised Scheme of Preference (GSP) were introduced to move the EU-ACP agreements forward after stalling over EPA’s. The GSP allows vulnerable developing countries to pay less or no duty on exports to the EU, giving them total access to the EU markets and contributing to their growth. After the collapse of the Doha Agreement in 2015 questions have been raised over the future of the EPAs, and multilateral cooperation to addressing global disparities in development and trade (Financial Times, December 21, 2015). Economic Partnership Agreements (EPAs) respond to the need for change: they take a new, more comprehensive approach, tackle all barriers to trade, mostly through re-enforcing regional integration and addressing supply-side constraints, and form secure, World Trade Organisations (WTO)-compatible trade arrangements.

Key Terms in this Chapter

Economic Nationalism: A set of practices to create, bolster and protect national economies in the context of world markets.

Globalization: Integration of economic activities across borders, so that nations become interdependent.

Agreement: A negotiated and typically legally binding arrangement between parties as to a course of action.

Paternalism: The interference of a state or an individual with another person against their will, and defended or motivate by a claim that the person interfered with will be better-off or protected from harm.

Negotiation: A discussion aimed at reaching an agreement.

Partnership: An agreement in which two or more individuals share the profits and liabilities of a business venture.

Neo-Liberalism: A modified form of liberalism tending to favor free-market capitalism.

Development: A discourse (a set of ideas) that actually shapes and frames reality and power relations.

Dependency: The state of being dependent.

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