The future for Africa’s trade with Europe: Factors affecting the long-term relevance of the European market for African exports
Sean Woolfrey and Poorva Karkare look at what the future holds for Africa’s trade with Europe. It analyses developments and trends in the EU market – paying specific attention to Europe’s push for more socially and environmentally sustainable practices – as well as increasing demand from emerging markets and African initiatives to boost intra-African trade.
The European Union (EU) and its member states seek to use the attractiveness of the EU market to encourage developing country trade partners to adopt more socially and environmentally sustainable practices. However, such a strategy depends on the EU market continuing to be an important market for developing country exports. Recent developments and trends, both in the EU and globally, bring this into question.
We have analysed developments and trends affecting Africa’s exports to the EU, focusing on African exports as a subset of developing country exports. We looked in particular at developments and trends in the EU market, increasing demand from emerging markets and African initiatives to boost intra-African trade.
We find that the EU is likely to remain an important market for African exports, including for niche, higher-value products with potential for value addition and for promoting sustainability. Nonetheless, European measures to promote sustainability are a double-edged sword. While they promote sustainable outcomes, they also make exporting to the EU harder, especially for smaller firms. This provides a strong rationale for efforts to help small- and medium-sized enterprises in developing countries comply with European measures to promote sustainability.
We also find that while Africa’s trade with emerging markets is increasing, it does not provide significant opportunities to generate local value addition and promote sustainable outcomes, at least not yet. By contrast, boosting intra-African trade offers great potential for generating sustainable outcomes, particularly in terms of boosting local value addition and creating opportunities for Africa’s many small firms, and for its women.