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TRADE: Pending EU Agreements Put West Africa at Risk

David Cronin

BRUSSELS, May 25 2007 (IPS) - The European Union and West Africa could scarcely be more different in terms of wealth, yet a pending trade agreement risks making the disparity even greater.

Whereas the EU accounts for 30 percent of global gross domestic product, all five of the lowest ranking countries in the United Nations Human Development Index are in West Africa: Guinea-Bissau, Burkina Faso, Mali, Sierra Leone and Niger.

These gaps notwithstanding, the EU’s executive arm, the European Commission, has galled anti-poverty activists by seeking to negotiate a free trade deal – known as an Economic Partnership Agreement (EPA) – with West Africa that would require both sides to behave as if they were equals.

In April 2003, West Africa became the first region within the African, Caribbean and Pacific (ACP) bloc to agree that it would commence EPA negotiations with the EU. The West Africa region negotiating with the EU comprises the 15 countries of the Economic Community of West African States (ECOWAS), as well as Mauritania.

Four years later, the 16 countries within the region are being told by Brussels officials that they will face a serious vacuum if they do not sign an agreement by Dec. 31.

A waiver from World Trade Organisation (WTO) rules applying to current preferences for ACP exports to the EU will expire the following day.

EU officials involved in the negotiations have robustly defended a proposal where “substantially all trade” between the two sides would be liberalised.

Peter Mandelson, the European commissioner for trade, said May 22 that both Europe and the ACP will have to open their markets if they are to comply with WTO rules.

Many anti-poverty activists believe that placing the onus on West African countries to scrap taxes they levy on imports from the EU would be inimical to their development.

The United Nations Economic Commission for Africa has calculated that any windfalls arising from such liberalisation will only benefit the European side. It estimates that the EU would see an increase of exports to the 15-strong ECOWAS worth nearly two billion dollars as a result of an EPA.

Just five countries – France, Britain, Germany, Italy and Belgium – would provide 80 percent of the goods involved.

On the other side, Ghana would face a loss in exports of 23 million dollars, Nigeria would lose 4.5 million dollars, Burkina Faso and Benin about three million dollars each and Ivory Coast nearly two million dollars, says the UN body.

Tetteh Hormeku of the Third World Network in Accra, Ghana, says the EU side has not shown any willingness to address the concerns raised about the likely impact of an EPA.

“The EU is using both sneaky and hypocritical tactics,” he told IPS. “It is deploying its overwhelming political weight to put pressure on governments to sign an agreement. This is in violation of the EU’s stated commitment to developing countries and the poorest of the poor. It is also in violation of its stated commitment to using the EPAs to help African countries develop.”

Although the EU has signalled that liberalisation of markets could be phased in over a 12 to 18-year period, there is a widespread feeling within West Africa that this would be insufficient.

The African Industrial Association recently complained that the EPAs would force Africa to become an “importation counter” as they would no longer be able to apply tariffs on goods from Europe.

No economy can be nurtured unless it is allowed to protect itself, its president Pierre Magne, based in the Ivorian capital Abidjan, said. This principle has been illustrated by the histories of the US, Europe, Japan and China.

“Africa has a lot to lose,” Magne explained. “The African regional blocs do not constitute open markets and regional integration very often remains virtual, something that is not true of the European market.”

A new study by the British fair trade organisation Traidcraft disputes an assertion by Mandelson that an EPA could provide a “fast-track” to greater regional integration within the ACP.

The study indicates that West Africa has made some steps towards integration by facilitating the free movement of people but contends that this progress can only lead to a genuine regional market if the countries concerned can liberalise trade with one another, without having to liberalise their trade with the EU at the same time.

Sophie Powell from Traidcraft says that the European Community took some four decades after its inception in 1957 to transform itself into a political and economic union.

“The EU allowed itself huge structural funds, enormous flexibility and lots of time to support its own regional integration, none of which it is proposing to allow in sufficient degree to African countries,” she added.

Internal documents seen by IPS indicate the EU has been inflexible with the West African side. In November last year, for example, the West Africans asked Brussels to extend the deadline for the talks beyond the end of 2007.

In response, they were told that failure to respect the deadline would see higher tariffs imposed on more than 1.3 billion dollars – or nearly 10 percent – of their exports to the EU.

Oxfam says the EU should offer an alternative to the EPAs, under which it would apply a modified version of its generalised system of preferences (known as GSP+) to the ACP countries. Currently, GSP+ has been offered to 15 countries, mainly in Latin America.

If the EU decided to impose tariffs on exports from West Africa to punish the regions for missing the Dec. 31 deadline, tariffs of about 27 percent would be placed on one-quarter of exports from Ghana and more than one-third of exports from Ivory Coast to the EU. Fisheries, horticulture and wood sectors would be most affected.

Oxfam has argued, though, that these exports need not suffer if the GSP+ scheme is used, as it would offer tariff-free access to the Union’s market for the three sectors concerned.

“The European Commission’s sombre scenario needs to be replaced with a more balanced one,” said Emily Jones from Oxfam. “With sufficient political will, the European Commission and EU member states could use the GSP+ to provide ACP countries with a high level of market access for their exports in ways that are compatible with WTO rules.”