The Economic Partnership Agreements (EPAs): The EU Threats and Implications for Africa
Pressure is being mounted by the European Commission (EC) to force most or all the ACP countries to sign and ratify the Economic Partnership Agreements, better known by the acronym EPAs. So intense is the pressure that countries, including Ghana, are being hysterical. Opposition in almost every country in Africa is enormous. The EPAs have been described in various terms. Lawyer Akoto Ampaw has described it as a ‘gift from the Greeks’. Prof. S.K.B Asante had labelled it as ‘a Trojan Horse’.
The EPAs are intended to replace the Lome Conventions under which the 77 Africa, Caribbean, and Pacific (ACP) countries had non-reciprocal relationship with the European Economic Community (EEC), as the EU was then known. The replacement of the Lome Conventions was necessitated by the inception of the World Trade Organization (WTO) in January 1995. Rule based and member-driven, the WTO avoids discrimination, where market access is concerned. It is also concerned about enhancement of trade and development, through the lowering and/or avoidance of trade barriers, especially tariffs. An exception to this rule is given under Article XXIV, which allows for Free Trade Agreements among and between Free Trade Areas (eg. EU, NAFTA, MERCOSUR, ECOWAS, SADC, etc.). Negotiations for replacing Lome were to be completed by December 2007 for a new trade regime between ACP and the EU to start January 2008. The ACP-EU started the platform negotiations in Cotonou, with the Cotonou Partnership Agreements (CPA). There were several issues to deal with. In the first place the 77 ACP countries do not constitute a trade bloc and, therefore, could not be taken as a FTA.
The alternative was therefore to negotiate with existing blocs within the ACP. Here again, the blocs were not clearly defined, especially in Africa where some countries belonged to two or more different blocs. Thirdly, the countries and/or blocs were unprepared in terms of negotiating specialists and funds. And finally, there was the problem of what to do with the diverse economic classifications of the countries involved. For instance, out of the 47 countries in sub-Saharan Africa, 32 are classified as Least Developed Countries (LDCs), who do not need to sign any new agreements, because they are under some special dispensation (Everything-but-Arms –EBAs), under which they have a right to export everything except arms to the European markets. To obviate these bottlenecks, the EU craftily pushed a completely different agenda, through the following strategies: re-craft new blocs, assist in the preparation of specialists/negotiators; offer a cocktail of baits and threats to willing and/or acquiescent governments to sign the EPAs individually, etc. It was through this mechanism that some hysteria was created in 2007, with the threat of denying countries which fail to sign market access for their product on the EU market. Ghana and La Cote d’Ivoire rushed to initial the EPAs in 2007. They are yet to ratify the EPA. In 2014 the EU has again raised the flag of hysteria, amending MAR 1528/2007 (Market Access Regulation of 2007) and threatening to implement it by October 14, 2014. ECOWAS was almost ready to sign, when Nigeria raised issues with the text and allied problems. A technical team, including Ghana, has been set up to audit the process and advise on the implications for signing either collectively or individually.
Several commentaries have condemned the EPAs, in the form that we are being stampeded to sign. In the first place, nobody quarrels with replacing Lome in order to have WTO compatibility. But is the current structure of the EPAs the answer? As indicated above, Art. XXIV (the Exemption Clause) envisages three important considerations: Discrimination, Differentiation, and Development. So any FTA to FTA or FTA to a country arrangement must be seen in the light of these considerations. Are the EPAs giving us any discriminatory advantages? Are they giving us any differentiation? Are they going to assist in development? Your guess is as good as mine. First, the deliberate ploy by the EU to re-craft FTAs and the insipid desire to sign with well-to-do countries will effectively kill integration, especially in Africa. For instance, there is no FTA by name East and Southern Africa (ESA). This has been created by the EU (without South Africa). They want to sign with South Africa alone. In West Africa, they want to sign with Ghana, Nigeria, and Cote d’Ivoire separately; then with ECOWAS plus Mauritania (what it means!). Note that of the 15 countries making the ECOWAS, 12 are labelled LDCs, who, as we have indicated, need not sign anything, because they are under EBAs. If Ghana or any of the three non-LDC countries should sign the agreement, ECOWAS effectively dies! Besides, there are several well-researched opinions that several losses would be incurred by the ACP countries, if the EPAs were signed. Nigeria, The Gambia, and other countries in the Caribbean have undertaken studies, the result of which indicates that the losses to their countries would be enormous.
Specific to Ghana, the South Centre notes that tariff revenue losses in the interim will be around $403.6 million per year during the implementation period, and with a compounded import growth beyond the implementaion period, may have an accummulated loss of about $18.4 billion.
From the foregoing, it is clear that Africa, and indeed the ACP as a whole, must reject the EC proposal to amend MAR 1528/2007. We must also fight for a GSP reform which would grant African countries in regional groupings with LDCs the same market access as their regional partners. Further we must urge the EC to allow for greater flexibility in EPA negotiations to ensure that any final deal is development friendly and promotes regional integration. Indeed, the EPA negotiations should not be brought to a false end through an ultimatum, as is being done now. If it comes to that then it would seem that the EPAs are about making countries comply with EU trade strategy, whereas, on the contrary, the EPAs are meant to address and support the development challenges partner countries are facing. Both the EC and the ACP should find genuine alternatives to EPAs for countries that are not in a position to conclude EPAs. This means maintaining MAR 1528 and reforming the GSP so as to offer EBA for the whole of Sub-Saharan Africa in line with the EU Policy Coherence for Development (PCD) of 2009 and Art.21 of the Treaty on European Union (TEU) obligations.