ECOWAS-EU EPA: A regional (dis)integration tool?
By Uzo Madu
Photo: (No attribution required) Creative Commons 1.0
18 April 2016 – The potential Economic Partnership Agreement (EPA) between the European Union and West Africa (ECOWAS and UEOMA) would mean West Africa would liberalise 75% of tariff lines at the end of the transition period of 20 years, after the agreement has been implemented. West Africa would have fully liberalised (duty and quota free) access to the EU market, replacing the current Generalised Scheme of Preferences (GSP), under which 11 of the 16 Members of the West African EPA trading blog were already benefiting from duty and quota free access to the EU market, under the Everything But Arms Scheme.
The EPA is currently at a firm standstill with The Gambia, Mauritania and Nigeria refusing to sign the agreement, following the conclusion of negotiations by both the EU and West Africa over two years ago. Arguments against signing the agreement are largely entrenched in the threat posed by increased EU competition, the loss of tariff revenues, and most notably for the purpose of this article, regional disintegration.
Regional Integration as an objective
The originating concept of the ECOWAS is to facilitate free movement of persons and goods within the West African sub-region and to finally reach ‘economic integration in all fields of activity of the constituting countries.’ (ECOWAS website) Although this is yet to be fully realized due to the prioritisation of national interests over larger regional interests by ECOWAS member states, which is considered to be the greatest obstacle to regional integration in the West African region. However, its most recent triumph signals a wind of change – the adoption of the the Common External Tariff policy (CET) and subsequent implementation from 1 January 2015 (although with staggered implementation across the region). The adoption of the CET has built upon the ECOWAS’ free trade area and elevated it closer to a customs union and in turn closer to its lofty ambitions of becoming an economic union, in which there is harmonisation of policy in fields such as economic planning, industrialisation, monetary policy, and exchange rate determination.
The ECOWAS story of regional integration is not complete without taking into account the influence of the EU. Its extensive and long relationship with the West African region includes financial assistance (2008-2013 the budget was €595 million and the 2014-2020 budget amounts to €1.15 billion) for, amongst other things, regional integration projects. And within the EPA, financial support to the tune of €6.5bn EUR from 2015-2019, under the EPA Development Fund has been budgeted to focus on the development aspects of the agreement, including, under Article 56 of the EPA: ‘building a regional economy that is competitive, harmoniously integrated with the world economy and stimulates growth and sustainable development…deepening the process of regional integration and increasing intra-regional trade.’Furthermore, the EPA vocalises throughout the legal text that regional integration is an ‘essential part of their [EU-West Africa] partnership’ (Aricle 1 of the EPA).
Regional integration in reality.
The reality of regional integration, as a practical consequence of the agreement, is however, a different actuality. The EU’s main argument for the EPA being in support of regional integration is that the 15 countries and two regional organisations (ECOWAS and UEOMA) had to define common positions and policies on the matters subject to the EPA. However, this argument is somewhat narrow, in so far as the EPA negotiating process has disrupted existing regional economic blocs, since there is ‘no coincidence between EPA-alignments and pre-existing regional combinations’ (See Nwoke, 2009). Mauritania is no longer an ECOWAS member but is in the ECOWAS negotiating bloc, also the 13-Member Southern African Development Community (SADC) is split between three different EPA negotiating blocs. Therefore, the EPA negotiating blocs on the African side can be said to go against regional integration on the continent as a whole. Furthermore, because regional blocs are engaging into EPA’s, rather than the continent as a whole it means that each region will have significantly different texts and different liberalisation commitments, resulting in trade between regional blocs remaining fragmented and potentially frustrating plans for a continental trading bloc in the coming years.
This also comes at a time when Africa is implementing intra-regional trade policies which cross the continent and extend beyond even the regional blocs it has made for itself. The Tri-Partite Free Trade Area was launched on 10 June 2015 and brings together three of Africa’s major regional economic communities—the Southern African Development Community (SADC), the East African Community (EAC), and the Common Market for Eastern and Southern Africa (COMESA). The Continental Free Trade Area, set to bring together fifty-four African countries by 2017. However, it should be borne in mind that a necessary precursor for regional integration is to focus on trading with countries in the same region, or in the same continent, over and above trade with third countries, such as the EU. Since one of the key aspects of economic integration is combining ‘elements for free trade with foreign trade protection. Thus, while an economic community establishes free trade among member states, it however imposes restrictions on trade with countries outside the community’ (See Nwoke, 2009) Therefore, it could follow that it is more optimal for West Africa and the continent more widely to focus on internal trade strategies and policies in their own backyard, such as the two regional trade agreements (The Tripartite and Continental Free Trade Agreement) being put in place, but also within their smaller regional blocs. This would also enable African regions to better navigate external negotiations and not be left to merely react on proposals put to them, but rather proactively seek out the partners they wish to do business with and on their own terms.
See the Inside the Issue show addressing the agreement below…