Economic Columnist – Edwin Laurent CMG OBE
It is over four years since the Caribbean concluded Economic Partnership Agreements (EPAs) with Europe, but negotiations are still going on in Africa and don’t seem to be getting anywhere.
Not surprisingly therefore the stalemate featured prominently at the recent ACP summit in Malabo.
A key obstacle in the talks is that the EU requires countries to open their markets by 80 percent, in other words remove all duties and restrictions on four-fifths of their imports from Europe.
The Africans also disagree on the scope of the EPA and on numerous technical provisions, and consider the amount of aid that will accompany the trade deal to be inadequate.
The outcry in African countries comes particularly from civil society organizations which claim that there is the risk of damage to African economies, which are based largely on the production and export of unprocessed raw materials. They fear that the principal beneficiaries of free trade will be exporters from Europe not from Africa.
It is thought not just the NGOs who are questioning the EPAs, but also officials. Carlos Bonfim, Common Market Director of the Economic Community of Central African States (CEEAC) said, “Our productive and supply capacity is so limited that we cannot draw real benefits offered by the opening of EU market towards us.
Cameroon Trade Minister Luc Magloire Atangana. Photo courtesy economie.jeuneafrique.com.
As to what we see that the EU is putting on the table as possibilities that should accompany the deal, it does not represent much.” He claimed, for example, that had Gabon signed the EPA, they would have lost as much as US$270-360 million per year in the export of plywood to the European market.
The case of Cameroon is instructive; its strategic economic sectors such as banana, aluminium, processed cocoa, fruits and plywood, benefit from trade privileges granted by the EU. The economy is therefore vulnerable to disruption should the trade benefits be withdrawn.
This makes the country susceptible to pressure. Not surprisingly therefore it signed an interim EPA to safeguard its trade with Europe; the only country in Central Africa to have done so.
This does not mean though that the government is fully convinced that the EPA is the best option for its economy. In 2009, it adopted a Strategy Document for Growth and Employment which estimated that, if the EPA were implemented without either its development package or the upgrading of local enterprises, Cameroon would lose up to US$1.095 billion dollars in non-oil revenue over the period 2010-2020.
In a replay of tactics similar to those successfully deployed in its EPA negotiations with the Caribbean, the EU has threatened to withdraw its special trade preferences to Cameroon unless parliament ratifies the interim EPA before 1st January 2014.
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