Time to Renew EU Trade Agreements with Africa
Paul Collier and Kalypso Nicolaϊdis | Open Democracy | January 2008The African, Caribbean and Pacific (ACP) group of states have enjoyed a privileged access to the European market and benefited from Economic Partnership Agreements (EPAs) with the EU since the 1960s. However, these trade agreements have now expired and the guidelines of the World Trade Organization (WTO) make their renewal impossible.
These guidelines only allow trade preferences when they are either reciprocal (as they are inside the EU) or when they are provided to developing countries on a non-discriminatory basis. EPAs meet neither requirement and have, until recently, been covered by a WTO waiver.
The promotion of new EPAs between the EU and six new ACP regions has been the subject of intense controversy and led to tense discussions at the recent EU-African summit in Lisbon. Instead of drawing up a new agreement under time pressure, the forthcoming year should be used to stop, reconsider and find the best possible solution for both Africa and the EU. A new agreement should take the following two points into account:
- Many ACP countries suffer from a reputation of being politically instable and thereby risky environments for investment. They need a means of persuading the world that their future policies are genuine. This can be provided by the reciprocity requirement of EPAs. At the same time, African countries shouldn’t liberalize their markets too fast. The change should take place gradually so that businesses can slowly meet their local needs.
- The ACP countries urgently need improved market access to Europe. The existing regulation, in accordance with the Everything-But-Arms-Initiative of the EU (EBA), which guarantees free trade for exported goods from developing countries, is insufficient. Because it only concerns the poorest countries, the EBA excludes the important African economies like Ghana or Kenya. These, however, are exactly the kind of countries which could act as catalysts for trade in Africa.
Furthermore, the EU needs to avoid conditional add-ons to EPA deals. Deals should not be used as a means of persuading African governments to reluctantly accept policy change in return for aid. This will only undermine the new trade agreements and cause African governments to agree to changes they don’t believe in.
The summary above was prepared by Natasha Doff of the Atlantic Community editorial team from 'Europe, Africa and EPAs: opportunity or car-crash?', openDemocracy, January 7th 2008. Related Articles on Atlantic Community:
- Multilateral Aid Programs Are on the Line
- The Increasing Importance Of Africa in US Trade Relations
- New Dreams for Europe's Future
