That ECOWAS position on Economic Partnership Agreement, EPA

One significant thing that took place at the ECOWAS ordinary summit in February 7, Ouagadougou, Burkina Faso, was that member-states decided to speak with one voice concerning the Economic Partnership Agreement, EPA, proposed by the European Union, EU. And for good reason, it seems. However, it should be reasonable to try to understand what the EPA is and what ECOWAS stands to benefit if the regional body agrees or disagrees to establish an economic pact with the EU.

In very loose terms and on paper, the EPA wants to collaborate with ECOWAS because of the common gains that both inter-governmental bodies will gain from a free-trade-area with the EU within a 12-year period from 2008 to 2020; and the possibility of an enhanced access to the EU market. In addition, ECOWAS will be in a position to engage the EU in progressive and flexible liberalization of trade in goods and services, not to mention the simplicity and transparent rules for business and investment. Even though the proposed pact has not been signed, business booms between the EU and ECOWAS. On ground right now, at least from 2002, the EU exported agricultural products worth $2million, raw materials to the tune of $806million and manufactured goods worth $8,304 to the ECOWAS region. In the same vein, ECOWAS exported $2,902million agricultural products, $5231million worth raw materials and only $1,147million of manufactured goods. On the face of it, business relatively favours ECOWAS. However, what effects will an ECOWAS-EU economic union have on Nigeria and on the ECOWAS? Statistics reveal cetaris paribus that total imports from EU may increase by 20.8 percent for us and relatively modest increases for Benin, Cape Verde, Senegal and Togo. Simultaneously too, if there is flexible liberalization of trade in goods and services, and if there is free trade area within the EU for ECOWAS, speculations indicate that the regional body should expect a concomitant reduction in import duties for governments from Nigeria, with countries like Cape Verde bearing most of the brunt of it that drop.

However, there are other issues to consider. If the proposed ECOWAS-EPA union were to take off now, there can be no guarantee that when import duties are removed, individual countries within ECOWAS may want to lower prices of their commodities. In addition, internecine conflicts in West Africa make it hard to determine the growth rate of ECOWAS countries, even though there is likely to be an increase of productivity and higher inflow of foreign investment. Nevertheless, all of this flies in the face of the seeming advantages that accrue to the regional body in an ECOWAS-EPA union. The fear and skepticism ECOWAS has expressed concerning the EPA proposition may not be totally connected with the alleged fear of alleged Chinese incursions and domination of the West African market. It is more than that. First, the EU went about the process of getting ECOWAS into the deal much the same way early European traders in pre-colonial times did. Since the beginning of ECOWAS-EPA negotiations, the EU has conducted negotiations with nearly every spaghetti body within and outside ECOWAS, perhaps so to apply subtle pressure to bear on the region. But there is nothing essentially wrong with this kind of move; any conquistador worth his salt sends a party to recce the terrain before an onslaught. That move, for the EU, represents a need to prepare the groundwork for the proposed partnership for it to be properly spelt out. But this is what has been the bane. ECOWAS say that it wants the terms of the union in black and white, in a manner of speaking. They say they want to know what ‘free’ trade means – they want to know why fish from Sierra Leone cannot enter the EU, but that from the EU can enter Sierra Leone. They say they will not sign any agreements because they do not understand certain grey areas of the proposed partnership. They, quite unlike their ancestors who signed away their lands to Europeans for guns and mirrors, want to know why only goods and not services from ECOWAS may enter the EU. They want to know why the ECOWAS-EPA economic union cannot be a union of equals if both are supposed to have an interest to protect.

Before the Ouagadougou ordinary summit, there had been a first and second round of negotiations between ECOWAS and the EU. The topics that the four meetings of senior officials and nine meetings of experts dwelt on were some of these questions. Of particular attention were eight thematic questions: custom union, free trade, competition and intellectual property, investment, agriculture and non-agricultural products. But the EU interestingly, has been unable to get ECOWAS to hop into its economic union. Instead, it proposed to sign a ‘goods only’ agreement buttressed with what it called a ‘two-stage EPA’. That would mean that even though the EU refuses to grant a two-year extension that the ECOWAS has asked for to be able to study the terms and preconditions for the economic union, countries that want to, can still conduct businesses with the EU on the basis of a ‘goods’ only arrangement. To this end, Ghana and Cote d’Ivoire agreed based on ‘bilateral interim agreements’.

But it must be pointed out that despite the Ghana, Cote d’Ivoire bilateral interim agreement’ with the EU, the ECOWAS has done well to have spoken with one voice. This important step greatly gives great fillip to regional integration. Whether or not the EU will succeed in the divide and rule tactic it has started by giving significant amounts in aid to specific ECOWAS countries, later on is immaterial for now. What is very important is that because both parties stand to gain or lose from an economic union that has preconditions and conditionality, it is crucial for both parties to sit at the drawing board and properly spell things out, if not for anything, so that Africa will not go through another ordeal of economic slavery.

Another level of argument is the gauntlet thrown by Vaclav Klaus, Czech President who was guest lecturer at the Anyiam Osigwe-Onyekwere lecture series at the Institute of International Affairs, NIIA, November 27, 2007. According to Klaus, ‘what is essential is the free, not fair trade, because fair trade means protectionism in disguise. Who should define what ‘fair’ is? To expect that politicians and bureaucrats are better and fairer than markets is a myth. As a politician and bureaucrat, I don’t have the slightest ambition to play games with rules of trade, with only a minimum of regulation. Free trade is not only about elimination of tariffs, quotas and contingents. The export subsidies of developed countries are even more important, because the less developed countries do not have the financial resources to do the same’, he said at that lecture. From this, it should not be too difficult to deduce that if ECOWAS did not exercise the kind of circumspection that it did at the Ouagadougou session, it may just be preparing the stage for another Berlin conference in the distant future reminiscent of the Berlin Conference of 1884-85.

British Overseas NGOs for Development, BOND, in its website says that the ‘replacement of the Lomé regime with free trade areas is a massive risk for the Africa, Caribbean Pacific, ACP, but the EU has nothing to lose. ACP countries are unlikely to gain better access to the European market but will see their local industries put under severe strain by competition from cheap European imports, often subsidized and of poor quality. The European Commission’s own impact assessment notes that, ‘EPAs could lead to the collapse of the manufacturing sector in West Africa’.