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GREAT insights Magazine

EPA Update April 2014

April 2014

Roquefeuil, Q. de. 2014. EPA update. GREAT Insights, Volume 3, Issue 4. April 2014.

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West Africa 

Nigeria blocks EPA endorsement at ECOWAS Heads of State and Government Summit

According to several news reports and persons present at the 44th Economic Community of West African States (ECOWAS) Ordinary Session of Heads of State and Government, Nigeria has refused to validate the agreement reached between the European Union (EU) and West African negotiators in January until some of its concerns were taken into account.

This comes as a surprise since the Ministerial Monitoring Committee (MMC), which Nigeria is a part of, had validated the outcome of the negotiations earlier in February. The MMC is tasked with following EPA negotiations in the region. So far, however, Nigerian officials had remained publically silent on the outcome of the Dakar negotiating round where the European and West African negotiators had found what was presented at the time as a mutually satisfactory solution.

Nigeria represents over 60% of regional GDP and more than half of the region’s population. The relative silence of the government until now had cast a doubt as to whether it was truly on board with the Dakar compromise. A report circulated by the National Association of Nigerian Trade (NANTS), according to which the Nigerian Minister for Trade had expressed doubts with regards to the EPA at one of their public forums, added another measure of doubt ahead of the Summit.

Groups such as NANTS, which have for a long time been opposed to the EPA, had strongly criticised the outcome of the Dakar negotiating session in previous weeks. They highlight the fiscal impact and competitive pressures that the Nigerian productive sector would face if it went ahead with an EPA. 

Nigeria, by far the most industrialised country in the region, has long been seen as reluctant to conclude an EPA. Its significant productive capacities means that it has relatively strong defensive interest in the negotiations. Its trade policy stance is also regarded as generally more protective than other ECOWAS countries, particularly compared with Francophone Member States. It had decided not to enter into an “Interim” agreement with the EU in 2007, unlike its neighbours Ghana and Ivory Coast. The Nigerian cocoa industry has been negatively affected by this choice, but the Nigerian government remained unswayed. 

The list of issues raised by Nigeria at the meeting, of which GREAT has seen a copy, is far reaching and European officials do not seem willing to reopen decade-long negotiations. Nevertheless officials from the region were apparently confident that Nigeria’s concerns could be addressed relatively quickly. 

According to sources present at the meeting, other countries and the President of the ECOWAS Commission tried to convince Nigeria of the necessity of following through with the technical compromises found earlier in Dakar. A failure to do so could tempt Ghana and Ivory Coast to implement their interim EPAs, concluded in 2007. Such an outcome would compromise already fragile efforts to form a customs union and integrate national markets. 

The Summit’s communiqué mentions that Chief negotiators of the region are to establish a committee in order to examine Nigeria’s concerns (1). This committee will include representatives from Ghana, Cote d’ivoire, Nigeria and Senegal. 

EU and EAC inching closer to an agreement

In their latest negotiating session, the EU and the East African Community (EAC) have managed to strike out important sticking points in their bilateral talks. The Most Favoured Nation (MFN) clause, Rules of Origin (RoOs), and finally some parts of the agriculture chapter seem to have been resolved at technical level.

The MFN clause has reportedly been settled, using language reducing the automatic nature of the extension of concessions and placing the burden of proof on the European Commission (EC). Most importantly, the agreement now privileges a “case by case” approach. GREAT does not know if “major trading partners” have been defined, as was the case in West Africa, or if the “case by case approach” has been sufficient to assuage the EAC’s concerns.

Rules of Origins are now finalised, including remaining product-specific rules. The principles of asymmetry and cumulation, which had been controversial in the past, are also resolved.

On agriculture, the idea of holding a comprehensive dialogue on the sector has been retained – but it is not clear whether the issue of subsidies has been settled on entirely. The EC had announced that it would stop using export subsidies on exports with EPA signatories as their destination – but the EAC might seek further commitments. One has to recall that the EAC had linked the issue of export taxes to the agricultural subsidies.

Remaining high profile issues are export taxes, relations with the Cotonou agreement (the non-execution clause), EU domestic support in agriculture, good governance on tax matters, and the “Turkey clause”. These are expected to be hammered out during a ministerial meeting to take place in May.

SADC negotiations moving forward

Talks between the EU and the SADC EPA group are moving forward, with the issue of agricultural market access being almost resolved. This topic had been the subject of back and forth discussion between the EU and South Africa, with the EU considering offers from South Africa as insufficient.

Additionally, GREAT has learned that the infant industry provisions, allowing SACU states and Mozambique to temporarily increase duties to their original MFN rates, have been settled. This is to be seen in conjunction with the transitional safeguards accorded to so-called BLNS countries (Botswana, Lesotho, Namibia and Swaziland). An additional safeguard for specific agricultural products is currently under negotiation.

Remaining issues such as export taxes and sustainable development remain on the table. Positions on export taxes in particular are still entrenched. 

A round of talks between senior officials took place before the EU-Africa Summit in Brussels, and an additional set of consultations were conducted on the sidelines of the Summit. GREAT has not been able to gather information on the content of these discussions.

Quentin de Roquefeuil is a Policy Officer at ECDPM.

This article was published in GREAT Insights Volume 3, Issue 4 (April 2014)

Footnote

1. See http://www.elombah.com/index.php/reports/21563-forty-fourth-ordinary-session-of-the-authority-of-ecowas-heads-of-state-and-government 

Economic Transformation and TradeTrade Policy and Economic Partnership AgreementsEconomic Community Of West African States (ECOWAS)Economic Partnership Agreements (EPAs)NigeriaWest Africa