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Q&A: Why Poorest African Countries Should Not Sign the EPAs

Isolda Agazzi interviews Dr EL HADJI DIOUF, expert on the economic partnership agreements (Part 2)

GENEVA, Apr 9 2010 (IPS) - It is a “million dollar question” why African least developed countries (LDCs) would enter into economic partnership agreements (EPAs) with the EU as what remains of especially their agricultural markets will be overrun with subsidised European produce.

Dr El Hadji Diouf made this statement in the second part of IPS’s interview with him on whether the EPA negotiations between West Africa and the EU should be suspended, as proposed by Ablassé Ouedraogo, former minister of foreign affairs of Burkina Faso and former deputy director of the World Trade Organisation (WTO).

Diouf is the manager for the EPAs and regionalism programme at the Geneva-based International Centre for Trade and Sustainable Development (ICTSD). ICTSD is a nongovernmental organisation (NGO) seeking to empower stakeholders in trade policy and influence the international trade system to advance sustainable development.

Q: When will the EPAs enter into force? A: The implementation period is one of the points of dispute. The EU wants to give Africa a 15 years deadline to implement accompanying measures and adapt to trade liberalisation. The WTO foresees 10 years but studies show that all regional agreements go beyond this date.

The bilateral free-trade agreement between the U.S. and Morocco had an implementation period of 24 years. On this basis, African countries want a 25 year deadline. But the EU stands firm on the 15 years, so the problem is not solved.

Q: What are these “accompanying measures”? A: They are key to sustainable development. West Africa already has the EPA programme for development (known by its French acronym PAPED). Governments maintain that, since trade liberalisation entails adjustment costs, the continuation of PAPED is a pre-condition for the signature of any EPA.

But the EU proposes 500 million euros and West Africa asks for nine billion. For the region, if there is no PAPED, there are no EPAs.

It’s understandable to link aid and conditionalities when the relationship is unilateral. This is why the EU has invoked a non-execution clause in the past to suspend its cooperation in case of democratic troubles in the beneficiary country or region.

But when a contract foresees obligations for both parties, it is very difficult to implement extra trade conditionalities. The EU is still advocating for a non-execution clause in the EPAs but that is unacceptable to West African countries.

Q: Ablassé Ouedraogo also says that Africa needs to be given enough time. A: Dec 31, 2007 was the deadline given by the WTO and it has been missed, except for a couple of interim EPAs. Yet, the timing of negotiations is very important. There can firstly be a minimal agreement on goods but Africa needs more time for services, intellectual property, government procurement, competition policy and investment.

These issues were successfully opposed by developing countries at the WTO but Africa could subsequently not resist the EU and they are on the agenda of the EPAs in a “rendezvous” clause. Obviously, the EU wants to go very fast but nothing obliges Africa to conclude an agreement by a given time.

From one year to the other, Africans make progress on different issues. One more article or one more conference can change a position. Why hurry up to sign an agreement that is going to commit the lives of future generations?

However, these deadlines don’t mean anything for the LDCs since they already have duty-free and quota-free market access to the EU with the “Everything but Arms” (preferential trade scheme).

Q: So what interest do LDCs have in signing the EPAs? A: This is the million dollar question I don’t have any answer to. LDCs don’t have any interest in signing the EPAs. Worse, these agreements jeopardise regional integration.

If Côte d’Ivoire and Ghana (two of the three non-LDCs in West Africa) open up their markets to European products, these will go to other countries too because of the regional free-trade agreement.

Currently, the interim EPAs with Côte d’Ivoire and Ghana are in force but not implemented because of a “gentleman’s agreement” not to jeopardise regional integration.

Some LDCs, like Burundi and Rwanda, have initialled interim EPAs, with the promise that less strict rules of origins would be applied to them. But promises were not kept and these countries will not get any additional benefit.

If there are no duties on industrial goods, consumers can get cheaper products and may be better off. But pan-Africanists like me believe that a country cannot develop by opening up its markets completely.

The example of tomatoes and onions shows that as soon as imported products start coming in, small and medium enterprises are squeezed out of business because, in addition to not paying duties, Europe keeps subsidising its agriculture.

African countries must decide what they want. I prefer minimal protection that will allow them to have performing industries in the coming years.