Economic Partnership Agreements: West Africa seals a deal at the 11th hour
After 10 years of tough negotiations, on 24th January 2014, West African and European Commission (EC) negotiators reached a major breakthrough on what now will be the first regional economic partnership agreement (EPA) since 2007.
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This is no small achievement. Given the disparity of situations among West African countries, (some needing an EPA to preserve their preferential market access to the EU Cote d’Ivoire and Ghana), while others were not dependent on it. Failure to reach a regional agreement with the EU would have strained, and potentially threatened to disrupt, the integration process of West Africa.
It is significant given the divergence of views between Europe and ECOWAS. By putting their differences in perspective and focusing on the ultimate goals, the parties have shown the necessary flexibility to reach a politically, as well as economically, important agreement.
What’s in it?
Comprise has been reached by both parties on a number of thorny issues that had blocked previous rounds of negotiations. For the first time in over 10 years, the EC has agreed on a flexible interpretation of the threshold required to liberalise substantially all trade, in order to be compatible with the rules of the WTO. Recognizing the special characteristics of West Africa, a deal was struck at 75% of trade to be liberalized over the next 20 years, rather the EU request for 80% over 15 years. Such flexible and pragmatic approach has played a key role in unlocking the negotiations.
West Africa also had to compromise to reach an agreement, notably by accepting the controversial Most Favoured Nation Treatment clause (though the clause contains some exceptions), and on export subsides – which are expected to be removed. The non-execution clause has not been included.
Regarding the financing of development, the amount agreed under the EPA Development Programme (PAPED) remains at 6.5 million euros for the period 2015-19, and there is no explicit commitment to provide “additional resources”. This was to be expected, given the financial situation of most European countries and the constraints on their development budgets. This is falling 8.5 million euros short of the West African estimates. The EU (Commission, member states and financial institutions) best endeavor commitment to seek solutions to finance the gaps are the only additional comfort West African have been able to obtain.
It seems that both the EU and West Africa (Nigeria and Senegal included) can finally go home and claim victory. Countries with the biggest interests (Cote d’Ivoire and Ghana) have been able to maintain their market access to the EU while preserving regional unity and coherence with the current regional integration agenda. Good for West Africa. The European Commission has been able to reach a new EPA deal, at last, which vindicates some of its instance on the merits of an agreement. Its flexibility on market access, a key aspect of the ECOWAS-EU EPA, has also proved vital. More importantly, by concluding a deal, the EU and ECOWAS have avoided a serious political and economic fallback which would have inevitably followed from a collapse of the talks.
What’s the way forward?
The agreement reached by the senior officials will have to be officially sealed, apparently in a meeting early February in Brussels by the Chief negotiators, to be endorsed at the ECOWAS Head of States Summit end of February.
What it means for the rest of Africa remains uncertain, though. African Union Heads of States are gathering in Addis Ababa today to discuss continental priorities. As it sets out to refine the contours of its Agenda 2063, in which economic development is the central pillar, the African Union will have to add to its long list of challenges innovative ways of coming to grips with the diversity of regional initiatives and their consistency with the continental agenda.
EPAs are also on their agenda, as they are expected to give a signal of African Unity as the joint Africa-EU Summit looms in the horizon. The coherence of regional integration at the pan-African level, and among regions, remains an issue. To which extend issues agreed in West Africa could have a positive impact on other regions remains to be seen. Will the EU exhibit additional flexibility towards other regions as well, and if so, in which areas? Can a deal be reached in other regions? One would hope so, and the ECOWAS-EU EPA is a positive signal. But this will continue to require flexible approaches by all parties, and a continued political commitment at the highest level to overcome differences. The Africa-EU Summit should also offer such an opportunity.
The views expressed here are those of the authors, and may not necessarily represent those of ECDPM.