Trade Extraversion in LAO

Trade Extraversion in LAO

Bayart wrote that “the leading actors in sub-Saharan societies have tended to compensate for their difficulties in the autonomization of their power... by deliberate recourse to the strategies of extraversion, mobilizing resources derived from their (possibly unequal) relationship with the external environment” (Bayart, 2000, 218- 219). Theoretically, for the purpose of this research, Bayart’s extraversion theory shifts the critical gaze to domestic ruling elites. Furthermore, extraversion is clearly a theory of political rationality in LAO societies because it separates the interests of ruling elites from those of the state and society at large, and posits that the principal political objective of ruling elites is to obtain and retain power, with external relations manipulated to this end. But on its own, Bayart’s theory of extraversion lacks a complete theoretical system. For example, Bayart seems to have contended that extraversion occurs only in Africa (Bayart, 2010, 51), without providing an explanation for this phenomenon. Why is extraversion unique to Africa? Clearly, questions of the nature of states and ruling elites in Africa are at the core of extraversion theory. The LAO framework provides a complete understanding of the nature of states in Africa: as coalitions of elites who seek to retain their position. Differentiating this type of state from others will enhance the theory of extraversion.

But to return to our line of research, the theoretical language of extraversion describes the relationship between domestic ruling elites in West Africa and the EU trade system in relation to minimum economic performance. A clear example of Bayart’s extraversion theory (vis-à-vis minimum economic performance) is the trade system between France and its African colonies in the last stage of the colonial period, from 1955 to 1961. During a commodity crisis in 1956, domestic ruling elites in French West Africa pleaded with France to pay higher prices for their raw materials to prevent a political crisis (Campbell, 1978, 71). The ruling position of the domestic ruling elites was to some extent based on the exportation of colonial raw materials; in Côte d’Ivoire, for example, the ruling coalition emerged from the cultivation of cocoa and coffee (Boone, 2007, 73; Losch, 1994, 25; Marshall-Fratani, 2006, 16). As a result, their negotiation for price support for these products amounted to negotiation to secure their own survival. From 1956 to the end of the decade, the world-market price for coffee declined by almost 50 percent, as observed in a report by the World Bank; however, Côte d’Ivoire and other West African countries were shielded from this price drop (World Bank, 1963, 10). France also stepped in to subsidize the price of cocoa (from 1958), bananas and pineapples into independence. The failure to achieve minimum economic performance, a local-power problem, was thus solved with recourse to trade extraversion.⁵

Whilst Bayart’s extraversion theory explains elites’ recourse to foreign assistance to solve domestic problems, he also unintentionally provided a theory of the absence of economic change in Africa: the political origins of economic change are activated for problem-solving. The late-colonial process of extraversion mentioned above is important because price support was not extended to Guinea from 1958 (a country neighboring Côte d’Ivoire, with a similar export portfolio), creating challenges for the ruling elites (under Ahmed Sékou Touré). Guinea diversified completely away from cocoa, coffee and bananas as a strategy for political survival (World Bank, 1966). Bayart’s extraversion is important to analysis of the EU’s trade with West African countries because it helps to illuminate the role played by ruling elites in determining the form and content of the trade system. Given the role of domestic ruling elites in the negotiation and outcomes of the EEC-devised trade systems (especially the Yaoundé and Lomé Conventions), the appropriate starting point for studying the EU trade system, according to Marcussen and Torp, is 1955, when a reduction in commodity prices prompted ruling elites to negotiate price support with France (Marcussen and Torp, 1982, 50). At independence, most political elites in the former French colonies sought to secure the continuation of the price support – which guaranteed the minimum economic performance (Campbell, 1978, 84).

The first EEC trade system was a means for ruling elites to negotiate the continuation of trade extraversion by protecting existing economic systems. In the Yaoundé Convention (1963), therefore, West African ruling elites in former French colonies argued for the preservation of French price support and market advantages (Marcussen and Torp, 1982, 49). The EEC agreed to continue providing price support and to extend the French market advantages, but used this leverage to install its own policy preferences in West African countries in the form of reciprocal free trade between the regions.

After the Yaoundé Convention, at the entry-points to the EU trade relationship in 1975 and 2000, West African ruling elites negotiated to preserve the existing level of minimum economic performance through several mechanisms, the most obvious of which was a system of price support (EEC, 1963; 1975). The continuation of the trade systems perpetuated a static production function in certain products. The Yaoundé Convention (1963) provided price support and market preferences for existing export systems in West Africa, which happened to be colonial specialization systems. Export products that were otherwise uncompetitive in the global market – such as pineapples and bananas – were protected in the EEC market. This effective protection lasted through the commodity crisis of the 1960s until 1975, when the Yaoundé Convention was replaced. On entering the Lomé Convention, ruling elites were again interested in a trade system that would “provide insurance against the insecurities of the marketplace” (Ravenhill, 1985, 3) in order to protect their countries’ existing export products, which happened to be the products protected under the Yaoundé Convention. The Lomé Convention thus institutionalized a price-support scheme for the same products that had received informal price support under Yaoundé trade provisions, and provided a quota and guaranteed market for uncompetitive products such as bananas and pineapples. These products were protected until the end of the Lomé Convention.

By 2007, when the Lomé Convention was replaced, a number of export systems in West Africa were totally dependent on market advantages from the EU and had never been competitive in the global market (bananas and pineapples, for example). The EPA, which replaced the Lomé, was negotiated and signed specifically to perpetuate the Lomé market advantages. Although the trade systems diverged in their provisions (Yaoundé was reciprocal while Lomé was non-reciprocal), from the African perspective the trade systems performed the same function of guaranteeing the existing economic system against the reality of market fluctuations and threats to political elites. One practical effect of this static system of extraversion was the extension of outdated products that are susceptible to diminishing returns and in which diversification ought to occur regardless of price signals. The societal effect of continued production in such products (child trafficking, for example, in the case of cocoa, due to the increasing factor requirement in a post-forest era) is an extended outcome of the EU trade system.

In studying the EU-devised trade system, I argue that the absence of change or diversification in West African economic systems, which has been highlighted as a puzzle in several studies (Whitfield, 2011; African Development Bank, 2000, 165; Van de Walle, 2009; De Vries et al., 2015), can be explained by the interaction between the EU trade system and West African elites’ strategies for survival, which end up protecting the minimum level of economic performance. This submission is tested with reference to the 1960-1975 period (during the Yaoundé era), when some West African countries were not aligned with the trade system. Countries that were not associated with the trade system experienced crises that threatened elites’ political survival, and diversification strategies were formulated accordingly. This framework is applied to the trade systems both separately and chronologically.