West Africa Endorses EU Trade Pact, Despite Lingering Concerns

3 April 2014

West African leaders endorsed "in principle" their Economic Partnership Agreement (EPA) with the EU last Saturday, two months after the negotiations were completed. However, divisions linger over some outstanding technical issues, particularly as some African countries - most vocally Nigeria - raise questions over the deal's potential economic impact.

The EU and West Africa had reached a compromise on an EPA at the senior officials' level at the end of January, pending political endorsement. However, the deal must also be initialled, signed, and ratified ahead of a 1 October deadline. Otherwise, some of those West African countries may lose their existing preferential access to the EU market. (See Bridges Weekly, 13 February 2014)

The West African endorsement came at a summit of the Economic Community of West African States (ECOWAS), which was held in the Ivorian political capital of Yamoussoukro just days ahead of a separate EU-Africa summit in Brussels. The latter event, which is also expected to address the EPA subject, was still ongoing as Bridges went to press on Thursday.

The planned EPA, if ratified, would establish a free trade area between the EU and West Africa, replacing the previous non-reciprocal regimes that have largely guided the EU's trade relations with those 16 countries over the past several years.

The ECOWAS group consists of Benin, Burkina Faso, Cape Verde, Gambia, Ghana, Guinea, Guinea-Bissau, Ivory Coast, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, and Togo. The EPA with the EU also includes Mauritania.

Nigeria concerns

Since October of last year, the efforts to close an EU-West Africa pact have advanced quickly, after a two-year stall over differences involving market access offers and the level of support that Brussels would provide the region in implementing the EPA, particularly given the region's development needs.

Under the draft compromise text, ECOWAS and Mauritania have agreed that they will phase in access to 75 percent of their markets over the next two decades. The EU, for its part, has pledged to make a €6.5 billion contribution to an EPA-focused development programme over the 2015-2019 period, along with providing West Africa full access to its market.

Despite last week's endorsement, some African countries still have concerns over whether to approve the final deal. At Saturday's summit, Nigeria reportedly questioned whether the deal could potentially harm some of its industries, should certain EU products be granted tariff-free entry into its market.

"Nigeria is the biggest country in the ECOWAS and we are already producing some of those goods that they want us to liberalise their importation," Nigerian trade minister Olusegun Aganga said this week, in comments reported by Premium Times Nigeria.

"What this means is that, not now, but from 2025 to 2026, based on the items that have been included and excluded, there will be significant loss of revenue to the government, loss of jobs, investment, and loss of even the ECOWAS market," he added.

Nigeria is the largest economy in the region, and has struggled to rally domestic support around the EU pact. Meanwhile, Ivory Coast and Ghana - the next two largest economies of the group - have been ardent backers of the deal, as both have initialled bilateral interim EPAs with the EU that are due to expire later this year.

While Ivory Coast has also signed its interim EPA, the EU deadline requires Economic Partnership Agreements to be ratified as well by the October deadline. Together, the three countries account for 80 percent of the region's exports to the EU.

"We need to negotiate an EPA that is beneficial to our sub-region and will contribute to the prosperity of our people," said Ghanaian President John Mahama, who assumed the ECOWAS bloc's rotating chairmanship at the summit.

Even with the scepticism from some West African countries, some officials say that they remain assured that these differences will be resolved in time.

"The deadline for the entire sub-region is 1 October and we are working towards that deadline. Our agenda is to work towards a signature, so I am confident," Ivorian trade minister Jean-Louis Billon told the Reuters news agency.

Others were less certain, however, with one member state official from the region noting that "there are still countries with reservations" about the EU deal.

"There's not exactly unanimity at the level of the ministers," the official said.

Back in Brussels, European officials have touted the trade pact's potential for Africa, both economically and otherwise.

"Europe is open for business from and with Africa - contrary to what some critics seem to think," European Commission President José Manuel Barroso told a meeting of African and European business leaders on Monday.

"Beyond tariffs, [EPAs] contribute to wider reforms to strengthen the rule of law and to ensure a stable, predictable, and transparent business climate, which helps African countries attract much needed investment," he continued.

Next steps

West African leaders have urged their chief negotiators - the presidents of the ECOWAS Commission and the West African Economic and Monetary Union (UEMOA) - to resolve the remaining technical questions over the next two months, in order for both sides to sign the deal.

The two negotiators will establish a committee of representatives from Ghana, Ivory Coast, Nigeria, and Senegal to revisit these issues and make proposals for leaders to review.

ICTSD reporting; "West African leaders fail to agree on EU trade deal," REUTERS, 29 March 2014; "Why Nigeria delayed signing EU/ECOWAS trade liberalisation pact - Aganga," PREMIUM TIMES NIGERIA, 31 March 2014.

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