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By Rick Rowden

Africans are insisting on actual economic development which is leaving European trade negotiators exasperated. Rick Rowden explains why their stand is historic and right. This article was published in The Mint (Issue 1, Spring 2017). In one of the most under-reported major stories coming out of Africa, the dominant idea that “free trade” is the best development strategy for poor countries is being given its most thorough trouncing in decades.

By rejecting proposed free trade deals with the European Union (EU), one of Africa’s largest oil producers, Nigeria, and one of the continent’s fastest growing economies, Tanzania, have poked the eye of the entire EU – not to mention Thatcher, Reagan, the Bretton Woods institutions and nearly every free market economist from New Delhi to New York. And yet this incredible story has received very little press coverage outside the continent.

Both countries have dug their heels in by consistently refusing to sign on to proposed deals known as Economic Partnership Agreements (EPAs) which have been in the works for well over a decade. Although most exporters from African countries already have preferential duty-free access into the EU market, the new EPAs would gradually give similar tariff-free access to EU exports into African markets.

While Nigeria has opposed the EPA for the Economic Community of West African States for many years, Tanzania’s new government under John Magafuli surprised many last summer with a last-minute decision to back away from the EPA for the East African Community (EAC) region.

Both countries have recently adopted ambitious plans for industrialisation. And the presidents, trade ministries and national manufacturing associations of both countries have all made it clear they are rejecting the EPAs with the EU explicitly because of concerns that the rules and restrictions within the proposed agreements would undermine their new industrialization strategies.

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Extract of the statement by Dr. Guillaume Long, Minister of Foreign Affairs and Human Mobility of Ecuador to the 34th Session of the Human Rights Council. 13 March 2017, Palais des Nations, Geneva, Switzerland.

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2017 began with alarming news: eight of the richest people on the planet have in their hands as much wealth as the poorest half of the world’s population, according to data provided by OXFAM. This growing gap between rich and poor is caused, in part, by an intricate network of tax havens to which the elites resort to avoid paying taxes.From Ecuador we have announced our commitment within the G77 to promote spaces for dialogue that will allow us to advance towards the creation of an intergovernmental tax body in the United Nations to end this perverse tax race to the bottom between states that undermines the guarantee of human rights.

 

We need to move forward together for a global agenda on tax justice. As many previous presidents of this council have said, tax revenue is the most predictable, stable and important source of income which states count on to ensure the protection of human rights.This is why, on February 19th, through a referendum, the Ecuadorean people decided that no public official, no politician elected through popular mandate should be allowed to have assets or money in tax havens. We have approved the Ethical Pact which seeks to ensure that those of us in public office are ethical and consistent. We believe the Ecuadorean people have given an historic example in the struggle for finance for development and against tax evasion, corruption and money laundering.

 

We have the responsibility to rethink the current financial system from the perspective of human rights. We cannot allow tax evasion, and the tools used to facilitate it, to continue propping up an unfair economic system, designed to enrich a small minority at the cost of the large majority. It is time to end these practices.Corporations and wealthy individuals who evade and avoid their tax obligations participate in denying the human rights of others, with every school that is not built, every medication that is not bought for lack of necessary resources on behalf of the State.