European Shortsightedness: How Economic Partnership Agreements Are Hurting Africa
October 10, 2016
By Paul Schaffer, W’18
What are RECs?
African RECs are groupings of countries that strive for inter-African unity, through trade policy, political unions, and beyond. The four I will focus on for the purposes of this article are the Economic Community of West African States (ECOWAS), the Southern Africa Development Community (SADC), the Southern African Customs Union (SACU), and the Eastern Africa Community (EAC). The African Union (AU) recognizes each of these as an official African REC. The AU’s designation is important because RECs will play integral roles in Africa’s plans to achieve greater political and economic unity and cohesion in the decades to come.
The African Union plans to use RECs as stepping stones towards creating a continental customs union, free trade zone, and eventually monetary union and political federation. These goals are lofty and ambitious, but RECs break them down into manageable groupings. There are already some steps being made to integrate multiple RECs, such as the Tri-Partite Free Trade Area, comprised of the EAC, SADC, and the Common Market for Eastern and Southern Africa (COMESA), another REC. The Tri-Partite Free Trade Area will include 26 of the 54 nations in Africa and is a milestone for the continent .
What are EPAs?
European Economic Partnership Agreements are meant to replace a previous preferential trade program that was ruled to be in violation of WTO protocols. With the EPAs, Europe was no longer willing to simply offer African nations tariff-free access to their markets with nothing in return, their goal was to gain access to African markets as well.
African RECs looked like the most reasonable groupings of countries to work with in order to negotiate these EPAs. They were comprised of countries who where already looking to integrate their economies more fully, they were sanctioned by the African Union, and they were modeled after the European Union. Strangely, Europe disregarded or disrespected the RECs to get their EPAs: The West Africa EPA includes Mauritania and ECOWAS nations, and the SADC EPA only includes half of SADC. The only region’s that Europe respected was the EAC.
African nations are stalling the negotiations because they are worried that granting the Europeans access to their markets will destroy many of their nascent industries. In response to this, the EU has stated that any Less Developed Country (Kenya, Nigeria, Cote d’Ivoire, Ghana, etc.), which has not signed an EPA by October 2016 will lose its access to the European Market. Since Europe is such an important market to these nations, all but Nigeria have signed an EPA so far.
What’s the problem?
There are two key problems with how Europe has approached Economic Partnership Agreements in Africa. The first is negotiation tactics and the second, and arguably more important, is regional integration. In regards to negotiation style, Europe assumed the perhaps unsurprising role of domineering and shortsighted paternalist. They have used their disproportionate market power to push African nations to agree to EPAs in fear of the larger fallout of losing access to the European market, because Europe believes that free trade and free markets will bring African nations out of their economic stupor. Most African nations are not inherently protectionist. They are, however, looking to boost trade within Africa as a means of generating wealth within the continent.
That leads to the next problem with the EPAs: they obfuscate integration efforts. The SADC EPA only contains half of the actual Southern African Development Community. That Community is currently working towards creating a customs union, but with the EPA in place, it will be very difficult to make that a reality. This EPA also creates problems for SACU, the oldest customs union in Africa, because all members of the union are in the EPA, but not all members of the EPA are in SACU. A similar situation exists for West Africa, although that may be somewhat easier to get around, with Mauritania being the only non-ECOWAS member. If you look at the only REC that corresponds completely with an EPA, the East African Community, there are still problems because Kenya is the only Less Developed Country in the group. This meant that the other members of the EAC had no incentive to sign the EPA, so Kenya looked to either be stuck between signing the EPA and breaking up the EAC, or losing access to the European market but keeping the Community together. They had found a middle ground by convincing the other members of the community to sign out of goodwill, but in July 2016, Tanzania backed out and the problems have all come back to light .
What are the possible steps forward?
The first step Europe should take is to push the October deadline back a few years.  This will, one, give African nations more time to negotiate and come to terms with the deals and, two, allow proper time to see how Europe and Africa’s relationship with the United Kingdom turn out post-exit from the EU. The UK is, after all, an important nation within the EU for so many African nations. More importantly, this time will give African nations more time to integrate with each other. The AU’s goals are lofty, but a Continental Free Trade Agreement is in sight and each REC could conceivably make one or two meaningful steps towards integration in that time.
There is a time for free trade between African nations and Europe, but October 2016 looks to be, in every way, an inappropriate one.
David Luke, Zodwa Mabuza, The Tripartite Free Trade Area Agreement: A milestone for Africa’s regional integration process, web, International Centre for Trade and Sustainable Development, June 2015 [online]. Available: http://www.ictsd.org. [Accessed July 18, 2016].
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