Bishop of Winchester on lifting people out of poverty through fairer trade agreements

The welfare of the east African nations is of particular importance to me. I was born in Tanzania and spent some of my teenage years in Kenya. In the 1990s, I was the principal of a small college in Nairobi—indeed, we still keep a home situated on an old coffee farm near Thika. Through this previous experience and from regular visits, I have observed the finely balanced life which Kenyan agricultural workers live. Smallholdings are a significant element in the agricultural sector of Kenya. Many city dwellers also have a smallholding upcountry. A severe drought might mean the end of their children’s education. It may also result in families being unable to afford even the most basic medicines or in workers having to resort to desperate means of generating income to support their families.

The economic partnership agreements that we discuss today may have as much of an impact on the livelihoods of east African smallholders as a bumper harvest or a deadly drought. We have heard from the noble Lord, Lord Chidgey, a sample of the difficulties caused by EPAs. I want to highlight two issues which could specifically affect the smallholder in Africa.

First, while the tailor-made free trade agreements between the EU and African countries seem on paper to indicate a real determination to encourage development in Africa, they could actually manifest in a very different way when countries such as France, with a vast agricultural surplus, are able to export enormous amounts of produce into African economies. This could be an effective death sentence for African smallholder co-operatives: local farmers’ markets supplied by smallholders cannot respond to bulk imports. How could a farmer, even one in a co-operative with a combined holding of some hundreds or thousands of acres, compete with shipping container after shipping container full of mass-produced, genetically-modified produce arriving from Europe? We have all enjoyed Kenyan beans and flowers, but these are the products of large-scale farming enterprises; reversing the process will hit the smallholder and further weaken existing co-operative farming arrangements.

The second problem I wish to highlight is one of government spending. Due to the difficulties of income taxation in several African countries where a large proportion of the population does not pay tax, one of the main ways that a Government fund public services, infrastructure and defence is through tariff revenues. The problem becomes all too obvious. To abolish tariffs in countries such as Kenya, with all its well-developed horticultural trade, through revised arrangements under the economic partnership agreements, would effectively slash substantial amounts of potential government revenue, meaning less money for hospitals, schools and roads. These are the very services smallholders require in order to make a contribution to the development of African countries.

Imagine these two effects combined; the result could be devastating to developing economies. Large numbers of smallholders would come under new pressures as they fail to compete with European markets; meanwhile the Government begin austerity measures in response to a fall-off in revenue. This is different from a trade dispute between two highly developed economic trading blocs. It is not TTIP, or Schengen arrangements within the well-developed EU market. Large multinationals will not suffer the consequences of a poorly negotiated trade deal. Neither will European citizens. It will be poor African farmers who will bear the brunt of the EPAs if the right course of action is not taken.

Much of what Paul Collier spoke of in his book The Bottom Billion has been acknowledged. New international trade arrangements are needed, accompanied by good governance and international law. Yet 5 billion or even 6 billion of us are still on track to improve our prosperity while the final billion have been left behind. There are many things which need improving if trade, rather than aid, is to be the basis for the relationships between developed and developing countries, but the last thing we want is to encourage instability and insecurity in economies where good governance is truly needed.

In the Church, partnership means working together as one towards the common good. From what I understand of EPAs, they are not quite the kind of partnerships that are envisaged. I will be reassured if we keep in mind the reality of life for the bottom billion and seek to establish partnerships that will lift people out of poverty on the basis of fairer trade agreements.

(via Parliament.uk)

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The Minister of State, Department for International Development (Lord Bates) (Con) [extract]:..the UK is committed to ensuring developing countries can reduce poverty through trading opportunities. The right reverend Prelate the Bishop of Winchester spoke about the importance of education and economic development. We would say the combination of those two elements is the surest possible route out of poverty…

…we must of course be mindful of the different stages of development that our partners face, a point made by the noble Lord, Lord Collins. That is why the EPAs allow 12 to 20 years for the gradual and controlled removal of our African partners’ tariffs, a point that the right reverend Prelate the Bishop of Winchester was particularly concerned about, and rightly so. These are not directly comparable; they are asymmetric, with a bias to development from the poorest countries.