March 2018 AU Position on Future Negotiations with EU Sparks Controversy

The AU statement to the effect that the new AU-EU agreement ‘should be separated from the ACP context’, sits uncomfortably alongside the positions previously adopted by African governments in an ACP context. This includes the December 2012 ACP Sipopo Summit Declaration which reaffirmed the determination of ACP governments to ‘strengthen …the historic and unique cooperation ties that bind us, through a new and mutually beneficial partnership agreement after 2020’, in support of structural transformation of ACP economies’ (4).

These sentiments were reiterated in the report of the 2014 ACP Ambassadorial Working Group on the future of the ACP and the Waigani Communiqué on the future perspectives of the ACP Group adopted at 2016 ACP in Port Moresby. The Waigani Communiqué not only ‘expressed determination to renew and enhance the ACP-EU partnership with a legally binding agreement building on the Cotonou acquis’ but also committed ACP governments to a process that would ‘jointly identify issues of common interest with their EU partners to ensure that the ACP-EU cooperation framework comprehensively takes into account the implementation of SDGs, promotion of regional integration, trade, Economic Partnership Agreements (EPAs), financing for development, and other identified priorities’ (5).

The CARIFORUM statement was issued with the AU statement very much in mind. This position had been signalled earlier in a note distributed by the AU Secretariat office in Brussels, which postulated two scenarios for the future to which African governments should give consideration, namely:

·         Should African governments opt for a stronger Africa in a reformed ACP post-2020?

or

·          Should African governments opt for a stronger AU-EU Strategic Partnership excluding the ACP?

The third option, which had been implicit in earlier African endorsement of common ACP position was ignored, namely:

·          using the framework of ACP-EU negotiations and the umbrella agreement (the only agreement the EC is legally obliged to conclude by March 2020) to secure substantive agreement on all areas of concern to ACP countries with a view to strengthening the hand of regional negotiators in translating the areas of substantive agreement into regionally relevant compacts.

It is this option which CARIFORUM Ministers implicitly endorsed in the context of the emerging AU position.

The pursuit of this third option would appear to be important given the tensions between African aspirations for what any future agreement should promote and EU objectives for the future agreement with African, Caribbean and Pacific countries.

The EC has placed domestic EU concerns over migration and security centre stage in its preparations for the negotiation of a new agreement with ACP countries. This is driven by migration flows which due to their scale have begun to carry political consequences in the EU. This has seen the rise of right wing populist movements with strong anti-immigrant and increasingly anti-EU sentiments. This is seen as potentially posing a threat to the ‘European project’, a vision of a common European future which was put under additional strain by the UK’s decision to leave the EU.

This political context is has seen from some EU member states who want to ‘see more economic opportunities from the EU’s new relations with ACP countries’, in a context where ‘in the next 10-15 years, 90% of the world’s growth will come from outside Europe’. Particular priority is placed on creating opportunities ‘to accelerate economic growth for the EU’, with more advanced ACP economies being seen as having ‘a role to play as strategic partners to achieve with greater success the EU’s own growth, jobs and investment agenda through trade, investment and other sector cooperation’ (6) (see companion article, ‘Implications of the EC orientation for Post Cotonou negotiations for ACP agro-food sectors’, 28 January 2017).

This focus could sit uneasily with African aspirations for an agreement with the EU which supports ‘structural transformation of economies and inclusive growth’.

Given the extent to which non-tariff trade policy tools are used by African governments in support of national sector development programmes (in countries as diverse as Namibia and Nigeria) it would appear essential to enshrine in the legally binding pan ACP-EU agreement a commitment to the flexible and responsible interpretation and application of EPA commitments, in ways which place the ‘right to development’ of African and other ACP countries centre stage in the development cooperation process.

The pressure on the EC to more rigorously enforce full compliance with commitments entered into by ACP governments under existing trade agreements is only likely to increase should a ‘hard’ Brexit occur. A ‘hard’ Brexit is most likely in the agro-food sector where EU controls on imports from 3rd countries are particularly.  Should this lead to similar controls on EU27 exports to the UK, then this could disrupt existing EU27/UK trade flows, with exporters across the EU28 then looking for alternative markets.

Initial analysis suggests the products of greatest interest from an African perspective where trade displacement could take place would include:

·          poultry meat (West Africa and Southern Africa);

·          dairy products in the form of fat filled milk powders (mainly in West Africa, but with exports to east Africa emerging);

·          refined sugar (West Africa, East Africa, with the ACP taking 22% of EU sugar exports in 2017);

·          frozen beef (West and central African markets)

·          onions and similar vegetable products (West Africa).

This is particularly important in the agro-food sector where such policy tools are most extensively used (see table) and where the use of these tools could be brought into question under EPA provisions dealing with the ‘Prohibition of Quantitative Restrictions’ and ‘National Treatment’.

Illustrative List of Sector Use of Non-Tariff Trade Policy Tools in ACP countries

In addition the underlying security and migration concerns have seen the EC putting forward proposals for a radical reform of traditional cooperation instruments which would de facto grant the European Commission greater autonomy of decision making over the utilisation of future development financing. This would provide the EC with even more leeway than it has already been able to secure under existing arrangements, in mobilising the financial resources necessary to ensure new more urgent EU priorities in cooperation with ACP countries are effectively addressed.

This financial dimension has been given added importance by the implications of Brexit for the financing of EU activities. The UK’s departure will affect all aspects of EU financing and not only cooperation with the ACP and other third countries. This will intensify pressure on the EC to make far better use of the already available funding in addressing EU core priorities.