With EPAs, not all countries are equal
Obstacles that prevent Nigeria from signing EPAs agreement
Nigeria and a few other countries have refused to sign the Economic Partnership Agreements (EPAs)with European Union (EU). In this report, ITUNU AJAYI (Abuja) explains the reason for the reluctance.
The Economic Partnership Agreements (EPAs) was initiated in response to continuing criticism that the trade agreements negotiated between the EU and its 76 former colonies comprising African, Caribbean and Pacific (ACP), are incompatible with the WTO rules.
On the surface, the EPAs are meant to facilitate ease of access to trade and investment and promote regional economic integration processes, but questions are being raised on the sincerity of the EU in the process.
With the agreements, ACP countries will be required to open their markets to EU imports and furthermore require liberalization in other areas such as investment and services.
The negotiation began in 2002 in Brussels and was supposed to have taken effect in 2008, but till date, some parties in the negotiation including Nigeria have not appended their signature on the document and this has continued to stall the implementation of the agreement.
Some of the perceived benefits of the EPAs include opening up EU markets fully and immediately but allow ACP countries long transition periods to open up partially to EU imports while providing protection for sensitive sectors.
EPA will also help provide scope for wide-ranging trade co-operation on areas such as sanitary norms and other standards, including WTO-compatible agreements, but go beyond conventional free-trade agreements.
It will also focus on ACP development, taking account of their socio-economic circumstances, including co-operation and assistance to help ACP countries benefit from the agreements. The agreements are “tailor-made” to suit specific regional circumstances and create joint institutions that monitor the implementation of the agreements and address trade issues in a cooperative way.
They are also designed to be drivers of change that will help kick-start reform and contribute to good economic governance.
This will help ACP partners attract investment and boost their economic growth and they are a process dating back to Cotonou agreement which was signed in Cotonou on 23 June 2000 by 78 ACP countries excluding Cuba and the then fifteen member states of the European Union.
Three ECOWAS member states including Nigeria are yet to sign the EPAs. One of the areas where Nigeria expressed reservation on the agreement is the perceived divide and rule tactics of the EU. ACP countries were further divided into seven regional groupings namely, the ECOWAS, the Southern African Development Community (SADC), the East African Community (EAC), the Eastern and Southern Africa (ESA), the Caribbean community and the Dominican Republic (CARIFORUM), the pacific region and the French-speaking block.
Nigeria fears that this division will not allow Africa to speak with one voice on the negotiation table and this is viewed as a deliberate move by the EU to break the region.
Ken Ukaoha, a trade lawyer who has been on the negotiation team on a personal ground told The Guardian that the EU members were not ready to shift on the issue of market access adding that they negotiated with some of their intentions hidden. He said this attitude made Nigeria jittery of the entire process as it does not reflect the reciprocity claim by the EU and so the initial challenge of non-reciprocity by the EU is already playing out and the agreement might further plunge African countries into economic slavery.
His words, ‘’On market access, we started moving from 60 to 63 to 65 percent but what beats my imagination was that while we were shifting ground as part of ECOWAS, the EU stood its ground, no shifting. This is not how to negotiate’’.
Ukaoha, however, is optimistic that there is hope that Nigeria can still append its signature on the document if the EU is ready to compromise on some of its original stands and address the issue of development in Africa.
He said it is not good for Nigeria to send its goods to other countries while it has not yet industrialised its economy, thereby exporting jobs to Europe.
“Our industries need to be developed, we have what it takes to get raw materials for our industries and produce goods from start to finish so why should we ignore such vital area of our development while some people want us to send them our products while they bring the finished products to us,’’ he asked.
Part of the demands of Nigeria is that the EU should come out clean and put all its cards on the table. For instance, countries that are categorised Least Developed Countries (LDC) which currently benefit from preferential market access to the EU market for all their products other than arms under the Everything but Arms arrangement (EBA) stand to gain nothing from signing an EPA since they would still receive the same preferences but have much to lose as they would have to open their markets to EU imports and regulations.
In order to force every country into signing an EPAs, the European Commission (EC) had threatened that any country that refuses to sign an EPA will lose access to EU market and imports from such African countries will no longer enter the EU through duty-free quota-free access instead they will face high tariff on goods from high income countries.
Some of the contentious issues in the EPAs are that the agreements do not address the challenges African countries face. Most countries face high unemployment linked to weak productive capacity, and are vulnerable to external shocks because of very limited diversification, and face food insecurity because of lack of investment in agricultural production and infrastructure.
Yet the EC insists that every country must tag along. And regional economic integration with the EU comes at the expense of real progress towards regional integration in Africa.
Professor Chukwuma Soludo, former governor of the Central Bank of Nigeria (CBN) who although was not on the negotiation team, supported Nigeria’s refusal to sign the agreement.
“In private whisperings, not many Africans or policymakers are happy with the deal but there is a certain sense of helplessness,” he said.
Aliyu Modibo was Nigeria’s minister of commerce and he was on the negotiating team of the EPAs. He told The Guardian that as far as he is concerned, Nigeria does not need the EU and so should not sign the agreement as it would not be in the best interest of the country with all the lacuna therein.
‘’The EPAs should not be a key focused issue now but industrialising our own economy. Most of our industries are not working and you will discover that those that are working such as Cadbury, Nestle and others are not Nigeria originated. They have their parent company somewhere in Europe or elsewhere. And the EU will not even take anything from these companies despite the fact that they are originated from abroad, they will say the products are for Nigeria markets; it is as bad as that’’.
He went further, ‘’Even our agricultural produce are not attractive to them, they will not take our cotton because, according to them, we do not have the quantity they want, they will take cocoa because they do not have a choice – we are a major producer. They have excuses for not taking crops like yams and sesame seeds, that we are not using the appropriate chemicals and fertilizers. When I was the minister of commerce, they said they could not take our shrimps because we were using the wrong net to catch them
“I will not advice Nigeria to sign the EPAs. We can call the EU bluff off. It is better we don’t sign unless we see in concrete terms of how it will increase our trade and remove trade barriers’’.
It is not only Nigerians that have expressed reservation on EPAs; other representatives of African countries have repeatedly stated that the current deal on the table is not in their development interest.
According to Dr. James Ndahiro, Rwanda’s representative to the East African Legislative Assembly “We are concerned that the outstanding issues, if not resolved and included in the EPA framework, will bind the EAC to poor trading terms”.
Also, the former president of Tanzania Benjamin Mkapa insisted that “We cannot continue to export a narrow range of largely primary products and import a broad range of finished goods on our way to development. The hard work of industrialization and food production must be done”.
Africa insists that the level of liberalisation the EU is asking for is too high. The EC is insisting on 80 percent of liberalisation of the goods market in African EPA countries. They present this as a fair and development friendly asymmetrical liberalisation, a claim Nigeria, in particular, disagreed with.
of the 15 ECOWAS member states including Mauritania, Nigeria, Mauritania and the Gambia are yet to sign EPAs. The Gambia has promised to sign if Nigeria signs. Stakeholders have warned Nigeria as a major voice in the ECOWAS block not to allow itself to be cowed into signing an agreement that would jeopardise its future. They insist that Nigeria must put its feet down and call for terms that would benefit its people.
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