By Sylvester Bagooro, TWN-Africa
Outline of Presentation Introduction Paralysis of the WTO From Multilateralism to the Proliferation of FTAs The Rise of Mega-regionals The incoherence, Uncertainty and Africa What kind response is needed Key Message
Introduction Today we are confronted with Mega-Regional Free Trade agreements such as the TTIP, TPP etc in the trade landscape With some indicating that these are due to the dwindling relevance of the Multilateral space So we need to interrogate the whole development and evolution of these agreements and situate them in relation to Africa’s context & developmental priorities
Dwindling fortunes Multilateralism-power configuration 3 main factors: Evolving Power Re-Configuration and Imperial ‘Over -reach ’ Reconfiguration of power relations within the multilateral trade structure and activities, increasingly expressed (although not necessarily institutionalised) in the Multilateral Trading System. This power re-configuration made clear by the rise of the BRICS with China playing a systemically significant role on global trade. This systemic shift strengthened pre-existing resistance of developing countries in reaction to rather too aggressive and brazen big power unilateralism (Seattle, Cancun etc) which both thwarted or stalled important imperial agendas while positioning ‘Development’ as a marker in the MTS, i.e. Doha “Development” Round Big powers’ response with parallel track New Trade Strategies – Bilateral FTAs and MTS reinforcing each other – e.g. Singapore Issues
The Relentless Search for FTAs The Rise of the BRICS and the paralysis from the Multilateral space pushed these developed countries (EU and US) into an arena of relentless search for trade instruments that could serve their interest. Hence the proliferation of regional free agreements: EU-South Korea FTAs, EU-ACP. In the Case of the EPAs the EU became much more aggressive with issues of export taxes and other WTO-plus issues due primary the new scramble for Africa Another dimension of these developments is the threat of FRAGMENTATION within and amongst South-South blocs, examples
FTAs continued The engagement on the EPAs has not been smooth for the EU. Resistance faced by ACP regions especially pushed the EU into desperation For instance the language in the EU Raw material shows how fierce and desperate the EU is the face of great competition from other partners.
Scramble for Africa & Fragmenting Development Africa is the most endangered by this fragmentation. Thus, emerging countries are also pursuing strategies towards resource-rich countries with the apparent aim of securing privileged access to raw materials. For example, China and India have substantially increased their economic engagement with Africa in recent years; in the case of China this includes major infrastructure projects and active involvement in exploration and extraction activities in countries such as Zambia (copper), Democratic Republic of Congo (copper, cobalt), South Africa (iron ore), Zimbabwe (platinum) and Gabon, Equatorial Guinea and Cameroon (timber)…. More directly, ACP, Africa Group and RECs fragmentation in EPAs. Mirrored by ‘fragmentation tendencies’ around ‘single issues’ in WTO e.g. LDC package, Cotton & other ‘low hanging fruit’, NAMA, latterly Public Procurement in Food Stocks, all express this in one way or another.
The Rise of Mega-Regionals These trends & threats elevated by the rise of mega-regionals such as the TTIP ( US and EU ), TPP ( between 12 Pacific Rim countries ) on the global scene In the WTO: ‘Development Round’, Single Undertaking, Re - introduction of specific plurilateral areas as norm-setters like 21 st century issues must also be seen as an accompaniment to this new phase Trade policy makers and trade justice campaigners alike have reacted to these mega-regionals a landmark development that will exert preeminent norm-setting influence on international trade frameworks. Given that highly unequal power relations characterise the international trade landscape, this could further erode the already-vulnerable positions of regions like Africa in their dealings with the EU or the US.
Rise of Mega-Regionals In the case of the EU there is a telling track record of leveraging new trade instruments to retroactively redefine relations with Africa. Thus, the EU’s adoption of her Global Europe strategy in 2006 radically altered the EPAs negotiations, whose modalities and fundamental frameworks had already been established almost half a decade earlier.
What’s in the Mega-regionals? Some stylized Highlights…. These mega regionals are mainly about investment rules, intellectual property, services, investor state dispute MRTA like the TPP has sweeping investment chapter that extends transnational companies ability to challenge public policies related to health, the environment It includes the controversial investor-state dispute settlement (ISDS) mechanism that allows corporations to sue a state if a new regulation hampers their expected profits or investment potentials.
Stylized Fact on Mega cont’d For instance TPP has sweeping investment chapter that extends transnational companies ability to challenge public policies related to health, the environment It includes the controversial investor-state dispute settlement (ISDS) mechanism that allows corporations to sue a state if a new regulation hampers their expected profits or investment potentials. It is strengthening the monopolistic control of TNCS
MegaRegionals & New Contestations Some analysts welcome the unprecedented scope of these mega-regionals as a potential universal good because the extension of known and predictable trade regulations can benefit the weak and strong alike. As such the new norms that might be set by these Mega regionals will provide clearer road maps for weaker countries and regions like Africa to negotiate and benefit from the international trade arena
Contentions On the other hand Mega-Regionals extension of trade liberalisation and deregulation is precisely what is fuelling increasing opposition to it in the EU and the US and in other regions which are not party to the agreement. For such, trade deregulation actually is the removal of regulations that promote labour rights, provide environmental safeguards; uphold the public interest generally and the welfare of the poor specifically; replacing these with commodification, competitive profiteering and the overall primacy of markets and supremacy of those that already dominate them. In this sense, it is all but inevitable that the poorest and weakest regions in the world such as Africa would be confronted with unprecedented threats that stem from the transnational corporations (TNCs) and governments armed with these new powers
Missing links What seems to be missing is a rigorous synthesis of the interrelationship between: comprehensive analysis of the actual content of these mega regionals and its specific direct and indirect implication for Africa trade structure; the presence of other competing frameworks including those that pertain as much to the geo-political as to the political economy. It also appears to gloss over or disregard appreciation of changing and unfolding global and regional economic contexts. and, within this, the socio-economic and other interest groups who, used not to pay attention to trade policy issues and might be newly exercised or engaged by the extension of these mega- regionals-like dimensions into the trade agreements such as the EPAs or via other channels.
Unknown Terrain/solution In the context of the discussions on the CFTA and Africa’s development it highlights uncertain situations which have profound impact on Africa’s development But this calls for innovation and strategic unified responses to fragmentation and paralysis of development goals. Here, home grown frameworks like CFTA and their associated Trade & Development priorities and policies can begin to influence important re-orientations To the degree such clarity is attained, how it enables generalized, inter-linked alternatives in response to Global Crises, Inequality & Austerity also might generate new opportunities for International Alliances
Summary- key messages Mega Regionals are a threat – as we have seen in WTO agenda But provoke contestation & uncertainty – explicit exclusion of China in TPP, China’s response with its new specific and systemic initiatives & interventions e.g. BRICs Bank, Asia Infrastructure Initiative in the first instance; new Silk Road Economic Belt & 21 st Century Maritime Silk Road as more global strategic frameworks In this context, what perspectives for global Trade Justice movement? What does CFTA offer for re- orienting Africa’s Trade & Development Agenda and for coherence in the face of intensifying fragmentation and the new threats somewhat expressed by the dramatic rise of Mega Regionals?
Summary-key message interlinking & integrating analysis, narratives, and struggles for alternatives in Finance and other Service issues etc Aim at strengthen resistance, sharpen orientation & rebuild network capacities & effectiveness
B&R(OBOR): the Silk Road Economic Belt and the 21 st -Century Maritime Silk Road
End of Presentation • Thanks for your attention
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