Prolonged and contentious trade negotiations between the European Union and different regions of Africa have been put back into the spotlight in recent months. Despite negotiating Economic Partnership Agreements, or EPAs, with the EU, several key African states have failed to sign them. Britain’s referendum on leaving the EU last June has added an extra dimension of uncertainty to the situation.
This threatens to derail years of trade talks between Europe and Africa, which changed significantly with the signing of the Cotonou Agreement in 2000 between the EU and the African, Caribbean and Pacific Group of States, or ACP countries. Before that deal, African states had enjoyed unilateral trade preferences with the EU. Cotonou reflected a significant rethinking of this trade and aid dynamic. A World Trade Organization waiver that was secured until the end of 2007 enabled the EU and ACP countries time to negotiate a new WTO-compatible trade relationship governed by a series of interregional EPAs.
The EPA negotiations began way back in 2002 with what eventually became seven subregions within this broader group of countries. The EU’s vision for the EPAs reflected its belief in the ability of reciprocal free trade agreements and regional integration to boost African development. But across the continent, a number of business groups, civil society organizations and trade unions have challenged these assumptions and mounted a concerted campaign against the EPAs. Much of the concern within Africa toward these agreements has focused on the limiting impact EPAs will have on government policy. Drawing on lessons from East Asia, many African opponents of the trade deals believe that they will ensure a continuation of the historical pattern of dependent trade links between Africa and Europe. In so doing, they will both limit the potential for boosting trade within Africa, while also restricting the range of policy options available to support African industrialization.
As it has done repeatedly throughout the EPA negotiations, the EU recently sought to impose a deadline on talks in order to convince skeptical African states to sign up. The negotiations, however, are complicated by the fact that different EPA regions have a mix of what the United Nations calls “least-developed countries”—those ranking last in the world on a mix of income per capita, human asset index and economic vulnerability index—and more developed ones. This is significant in terms of the EU’s negotiating tactics because its “Everything but Arms” arrangement allows duty-free and quota-free trade access—with the exception of weapons—for least-developed countries. As a result, more-developed countries have the most to lose from the EPAs in terms of a withdrawal of preferential access to the European market.
The process of EU negotiations has seriously undermined African regional integration efforts.
What is the current state of play in the various EPA talks? In East Africa, the EU recently extended an original deadline of Oct. 1 for the withdrawal of Kenya’s preferential access to the European market. This was meant to allow Kenya, which has signed the EPA, sufficient time to ratify it. This situation has arisen because of Tanzania and Burundi’s refusal to sign the regional deal, which requires all member states of the East African Community (EAC) to be on board for it to take effect.
In West Africa, similar tensions have arisen over Nigeria’s opposition to signing the regional EPA. Both the Tanzanian and Nigerian governments have indicated that they are concerned that signing an EPA will undermine their ability to adopt government policies to support industrialization. In Nigeria, the Manufacturers Association of Nigeria has been particularly effective in lobbying against the EPA, arguing that it will harm the domestic industrial sector. As a result of this intransigence, the EU is reportedly now considering withdrawing Nigeria’s preferential access to the European market.
In Central Africa, meanwhile, Cameroon decided to unilaterally sign an EPA in September, which has upset its regional partners in the Economic and Monetary Community of Central Africa. All three cases highlight how the process of EPA negotiations has seriously undermined African regional integration efforts.
Although an EPA has been signed in Southern Africa, the existing regional organization there was fractured from the very outset of EU talks. Only six of the 15 member states of the Southern African Development Community (SADC) have signed the EPA—Botswana, Lesotho, Mozambique, Namibia, South Africa and Swaziland. Angola was involved in the negotiations but won’t join for now, while the other eight SADC countries were involved in different EPA negotiating groups.
African states face additional uncertainty over the terms of their trading relationship with Europe because of Brexit. In July this year, an EPA signing ceremony with the EAC was canceled when Tanzania announced that it was having second thoughts about the deal. In addition to their concerns over the developmental impact, Tanzanian officials suggested that the instability following Britain’s vote to leave the EU was part of the reason for their change of heart. Britain is Tanzania’s most significant trading partner in the EU, so it’s no surprise that Tanzanians have expressed concern over what their trade relationship will look like after Brexit. Tanzania also faces the more immediate spillover effects resulting from the potential downturn in the British economy.
All this has consequences not only for EU-Africa trade, but for free trade policies that have been forced to adjust to new economic and political realities. Ultimately, while progress in the Doha Round of multilateral trade talks at the WTO appears to have ground to a halt, bilateral and interregional trade agreements have become the focus of the world’s major trading powers. In the negotiation of the EPAs, African states have been able to employ the developmental rhetoric of the European Commission as a way to boost their own bargaining power. But it remains to be seen whether the EU will be able to eventually convince its African partners to both ratify the current EPAs at home and then begin negotiating toward the more comprehensive deals it had originally envisaged when the Cotonou Agreement was signed.