15. EU, West Africa Delay EPA Conclusion
Western African countries and the European Union acknowledged in June that more time was needed to conclude an economic partnership agreement between the two regions.
The parties had hoped to wrap up the negotiations in mid-2009, but have now agreed to take the process forward in two stages. They aim to sign an agreement on market access, development co-operation and certain trade-related issues by late October, and pick up other subjects, such as services, as of January 2010.
Western African countries have offered to open up 60 percent of their agricultural and industrial goods markets. The EU first said this was not compatible with WTO rules on regional trade agreements, and then characterised the offer as ‘lacking in ambition'. Western Africa, however, argues that its market access proposal is entirely in line with WTO disciplines. GATT Article XIV.5(b) defines a free-trade area as a "group of two or more customs territories in which the duties and other restrictive regulations of commerce [...] are eliminated on substantially all the trade." However, despite years of discussions, WTO Members are yet to agree on what constitutes ‘substantially all the trade'.
During the first phase, West Africa's market access offer will be examined sector-by-sector. The principal aim will be to come up with a result that "promotes development while keeping in mind the need to preserve legal certainty vis-à-vis the WTO." Other questions to be discussed during this phase include the controversial most-favoured-nation clause, which requires EPA parties to extend to each other any further trade concessions made to other countries after the EPA enters into force. Brazil has warned that the obligation could have a serious impact on South-South trade. It could, for instance, make other developing countries reluctant to negotiate trade agreements with EPA partners, and undermine their efforts to extend of duty- and quota-free market access to least-developed countries (Bridges Year 12 No.1 page 8).
The EPA Development Programme, which is to accompany the market access agreement, will also be a key issue. Western African delegates will seek to ensure that this funding mechanism has a secure legal status, as well as attempt to rein in the ‘non-execution' clause, under which the EU could suspend EPA benefits, potentially including for reasons such as human rights violations or poor governance practices.
As of January 2010, negotiators will focus on the other areas to be included in the final EPA, with services at the heart of the discussions. Western Africa had asked for a delay in the services talks. Other trade-related issues will also be examined, since the parties recognise the importance to regional integration of modernising the business environment, enhancing economic governance and attracting investment.
Safeguarding Regional Integration
Western Africa attaches great importance to ensuring that the EPA does not weaken regional integration. A quick solution must be found for dealing with Côte d'Ivoire, Ghana and Nigeria, West African negotiators insist.
The three states are the only non-least-developed countries (LDCs) in the region. As such, they do not benefit from the EU's Everything but Arms (EBA) initiative, which grants duty- and quota-free access for nearly all LDC exports. Both Côte d'Ivoire and Ghana have initialled interim EPAs (covering only trade in goods), but Nigeria remains reluctant. Currently, its exports fall under the EU's Generalised System of Preferences.
Instead of facilitating regional integration, this situation impedes it, Western African negotiators say. They maintain that the final EPA should include all members of the Economic Community of West African States on an equal footing. In practice, this would imply the EU granting full duty- and quota-free access to the entire ECOWAS bloc, including oil-rich Nigeria.