Summary
The EU delegate to Nigeria and ECOWAS maintains West Africa’s economic development interests and not EU commercial interests underpin the EU-West Africa EPA, citing the range of measures aimed at protecting sensitive sectors in West Africa, such as the agri-food sector. However this ignores the likely trade effects in the agri-food sector of West African commitments contained in the EPA on the elimination of non-tariff barriers to imports from the EU. How these EPA provisions are interpreted and applied in practice will be critical to the future evolution of EU agri-food exports to markets like Nigeria. If Nigerian concerns over the trade and economic consequences of EPA implementation are to be addressed, the EU Council of Ministers will need to commit to subordinating the interpretation and application of any EU-West Africa EPA provisions to the structural economic transformation aspirations of West African governments and societies.
While asserting Nigeria’s sovereign right to determine whether to sign on to the EU-West Africa EPA, the EU Delegate to Nigeria and ECOWAS, Michel Arrion has sought to clarify some misconceptions around EU EPAs and hence make the case for Nigeria signing on to the agreed EPA text. He firmly rejected the EU was putting ‘pressure on Nigeria to sign the EPA’ and that the negotiations were being driven by EU commercial interests. He maintained ‘the EU will not obtain many economic or commercial benefits in the short or medium term’, given the gradual nature of the tariff reduction process to which West African governments were required to commit.
The EU Delegate highlighted the extended implementation timeframe on the West Africa side of the agreement, with tariff reductions only starting after 5 years, being gradual, and extending over between 15 and 25 years. He maintained West Africa would still be able to maintain ‘high import duties on most finished and consumer goods imported from Europe’. Under these circumstances it was maintained ‘only few EU suppliers would…be able to increase sales to West Africa as a result of the EPA’.
He rejected suggestions ‘the Nigerian market would be flooded by cheap European products’ once the EPA entered into force, arguing ‘European products are not cheap’, compared to some local products and good imported from Asia. In addition he maintained ‘the EPA has been negotiated in a way to reduce any risk of a possible negative impact for West Africa’, for example it included infant industry protection provisions, which allow import duties to be increased if imports from the EU threatened to flood the market.
He claimed the main aim of the EPA was ‘to support, not to undermine, the economic development and industrialization of West Africa’. The EU Delegate argued the EPA placed more obligations on the EU than on West Africa and gave ‘more rights in favour of West Africa than the EU’. In this context he made reference to the products excluded from tariff reduction processes, particularly ‘sensitive sectors, such as agriculture, food and beverages’. He maintained most tariff reductions were for capital goods, machinery and parts which did not compete with locally produced goods, but which were used as inputs into local manufacturing in Nigeria. The agreement, it was argued, would thus help reduce costs of production in Nigeria.
In terms of facilitating increased exports from Nigeria, the Delegate referred to the regional nature of the rules of origin applied to products exported to the EU, which allow inputs to be sourced from across the region. He further highlighted how a ‘Competitiveness Observatory’ would be set up to ‘monitor and assess…the implementation and the impact of the EPA on the economies of the West African countries’. These findings could then be taken on board during the five year review of the agreement.
He also noted the EPA ‘provides for enhanced cooperation in agriculture, fisheries and food security, by establishing a high-level dialogue on agricultural policies, creating transparency and supporting West African farmers to meet the EU’s sanitary and phyto-sanitary standards’. Finally he stressed how the EPA was a ‘trade and development agreement’, with the EU already having committed ‘€6.5 billion in development cooperation projects linked to trade, industry, energy and transport infrastructure for Nigeria and West Africa for the first five years of implementation of the EPA’. Further funding he held would be ‘committed throughout the whole EPA implementation process’.
He did however acknowledge that EU had interests in West Africa specifically in ‘more peace, stability, security and prosperity in West Africa’, since this would ‘offer more opportunities for the EU to export and invest in West Africa’.
| Comments and Analysis
As is commonly the case when EU representatives speak of the impact of an EU-West Africa EPA on local economies, no reference is made to the commitments included in the agreement dealing with the elimination of non-tariff barriers to EU exports. Yet it is these commitments which are likely to first make themselves felt in the agri-food sector in West Africa. The importance of these commitments have long been recognized by EU agri-food exporters, which since June 2007 have requested the EC to give priority to using EU trade agreements to systematically remove non-tariff barriers to EU agri-food exports. These demands were reiterated during the EC’s 2015 public consultations on future EU trade policy.
This issue of the use of non-tariff trade policy measures is particularly important in sub-Saharan Africa where WTO Trade Policy Reviews conducted since October 2010, reveal no less than 27 African governments making use of non-tariff trade policy tools to manage trade in no less than 11 sensitive agro-food sectors. The use of these non-tariff trade policy measures often forms an integral part of broader efforts to promote more locally integrated agri-food sector development (see for example the companion article ‘Nigerian government adopts trade measures against tomato imports’, 15 May 2017). The EC needs to acknowledge and address this issue of how it will seek to interpret and apply in practice these provisions dealing with the use of non-tariff trade policy measures. A number of the provisions dealing with the elimination of non-tariff measures have no extended transition period but rather apply from the date of entry into force of the economic partnership agreement. The EU Council of Ministers needs to make a clear commitment to subordinating the interpretation and application of any EU-West Africa EPA to the structural economic transformation aspirations of West African countries, through taking on board the concept of the ‘right to development’ as elaborated by Joseph Stiglitz and Andrew Charlton in their 2013 report ‘The right to trade: Rethinking the aid for trade agenda’. This proposed the establishment of a ‘right to development’ which would seek to limit the applicability of trade agreement commitments ‘when the enforcement of such obligations would have a significant adverse effect on development’. It would create a right for developing countries ‘not to be harmed by the imposition of trade rules’. This concept of the ‘right to development’ while initially elaborated in a WTO context, also needs to be applied in the implementation of bilateral trade agreement commitments. This is certainly the case for the EU’s EPAs, where many ACP governments have been required to go substantially beyond their WTO commitments in terms of tariff liberalization and other commitments. In the agri-food sector this could serve to hamstring efforts to promote locally integrated agri-food sector supply chains, given the distortions which exist on global agri-food markets. |
Source:
Guardian (Nigeria), ‘Some important clarifications about the Economic Partnership Agreement and EU trade policy’, 26 April 2017
https://guardian.ng/business-services/some-important-clarifications-about-the-economic-partnership-agreement-and-eu-trade-policy/
| Key words: Nigeria Tags: West Africa EPA, EPA General |