The impact of Economic Partnership Agreements on the development of African value chains
The Economic Partnership Agreements (EPAs) concluded by the European Union (EU) with regional blocs of African countries (and certain individual African countries) are supposed to do more than just boost trade between the EU and African countries. They are meant to promote sustainable development and poverty reduction, including through supporting regional integration processes in Africa, promoting the gradual integration of African economies into global markets and enhancing African countries’ ability to leverage trade opportunities for economic growth. Given the internationalisation of production processes, with 70% of global trade involving intermediate goods or services, increased participation in regional and global value chains has become a crucial part of African countries’ economic transformation and sustainable development strategies. It is therefore relevant to consider how EPAs might affect the ability of African producers and services providers to integrate into such value chains.
The Economic Partnership Agreements (EPAs) negotiated between the EU and regional blocs of African countries are meant to promote the gradual integration of African economies into global markets, including by supporting African businesses to increase their participation in regional and global value chains.
However, these EPAs do not significantly alter market access conditions relevant to many African producers and services providers and are thus unlikely to have major direct impacts, either positive or negative, on their prospects for participating in regional and global value chains.
EPAs could have beneficial indirect impacts on African producers and service providers by encouraging investment and by facilitating support to interventions and initiatives that boost the capacity of African businesses to participate in regional and global trade, but such support will not automatically materialise through the conclusion of EPAs.
There is thus a need for development partners and other actors to complement EPA implementation with support for value chain development initiatives and awareness-raising and capacity building to ensure African businesses can take advantage of EPA-related opportunities, and for the establishment and use of effective mechanisms to monitor EPA impacts.