EPAs lead to:
- Significant declines in government revenue due to the elimination of import taxes on goods produced in the European Union; this is likely to result in less budget funding for social and human development.
- Closures of local manufacturing ventures, especially small and medium-sized enterprises (SMEs) due to competition from cheap subsidised imports.
- Delivery of basic social services (the provision of health, education and other social services) to non-national private sector operators under the promotion of the privatisation of public services; in turn this is likely to lead to reduced access to these services for lower income groups.
- Declines in inter-regional trade due to ‘trade diversion’; countries lose their markets in neighbouring countries.
- Opening up to European competition for all government tenders; local companies which gain their income from government contracts will have to compete with EU companies.
- Repatriation of profits gained by EU companies to Europe (rather than re-invested within the region) due to ‘investment protection’ clauses.
- Dumping of cheap EU agricultural surpluses (e.g., dairy products, cereals, beef) which threatens the small-scale farming sector; in turn, this is likely to lead to the collapse of rural economies and rural out-migration.
- Losses and collapse of local retail sectors in both goods and services because of entry into the local market of European operators.
- Capital flight from the country because of investment measures that prohibit restrictions on the repatriation of profits.
- Dispossession of indigenous land owners and lost livelihoods to give way to operations of European tourism, mining and other investors.
Adapted from: Nancy Kachingwe (February 2006) ‘Between a rock and a hard place – Africa faces no-win situation in trade deal with Europe’, Southern and Eastern African Trade Information and Negotiations Institute (SEATINI) bulletin.