In its Economic Partnership Agreements with ACP countries, the EU has pushed for African countries to significantly reduce tariffs in return for having access to the EU market. In an interview with Triple Crisis blogger Timothy A. Wise, Aileen Kwa of the South Centre discusses the dangers of the EPAs for African economies and offers possible solutions.
For background and more on the issue, see:
EPAs: The Wrong Development Model for Africa And Options for the Future
Need for Africa to Re-think the EPAs in Light of the Economic Crisis
Legal Analysis of Services and Investment in the Cariforum-EC EPA: Lessons for other Developing Countries
Hi,
Thanks for discussing and highlighting this important topic. However, I would just like to emphasize that unilateral EU liberalizations for the ACP countries, as recommended here, are likely to not be WTO compatible. After all, that was the reason why the EPA negotations are taking place, since the Cotonou preferences for ACP countries were deemed ‘illegal’. Having some insights into the discussions in the EU, I know there is a constant struggle between offering ACP countries as much as possible, while still doing nothing that would be incompatible with WTO rules.
The EU has sought and attained waivers for unilateral preferences for several countries. Similarly, the US and Canada and there are now 9 active waivers at the WTO – EU for Moldova, for the Western Balkans countries (Croatia, Albania etc), US for the Africa Growth Opportunity Act (AGOA) for nearly all Sub-Saharan African countries, US for the Caribbean, Andean countries, Pacific countries. In addition, the EU is now holding consultations regarding a waiver for Pakistan. The idea of parties opposing such a waiver for Pakistan on certain lines (essentially textiles, maybe also rice) by other WTO members has not deterred the EU. In fact, the corridor news is that even the DG of the WTO has said he can help in the political efforts to get this waiver through the WTO.
Pakistan’s exports to the EU are about 2.3 billion a year. Exports from the 14 non-LDC African countries that would need a waiver are about 6 billion a year. (African LDCs do not need to be part of such a waiver since they already have the Everything But Arms scheme – duty free quota free access- EU provides to all LDCs). Of course Pakistan due to the floods is deserving of this support. But is not Africa equally deserving?
According to news reports, EU diplomats were asked if they would not be challenged at the WTO if a waiver for Pakistan were given. The response given by these diplomats was that a WTO dispute takes at least a year to be officially addressed. This means that in the meantime, Pakistan could beneift from temporary trade facilitators which could be withdrawn before a legal case starts (EurActiv ‘EU leaders set to back trade waiver for flood-hit Pakistan’, 13 Sept 2010).
The challenge brought to WTO regarding Cotonou was regarding bananas. Since then, Latin American countries such as Colombia and Costa Rica has signed FTAs with the EU. The tariffs the EU charges them will be 75 Euros per tonne i.e. these countries got what they wanted. Ecuador, without an FTA with the EU, but with the WTO Agreement on Bananas of Dec 2009 will eventually face an MFN tariff of 114 Euros per tonne, down from existing tariff levels.
There is a possibility that these countries could oppose the waiver for Africa. However, if the EU has political will to truly support Africa, political efforts can be made to overcome this – these are not major roadblocks (as with the case for Pakistan).
David Cameron, UK Prime Minister noted during the discussions on the waiver for Pakistan, ‘I believe this was a test for the EU to make sure that when we talk about our external relations we deliver results, not just rhetoric’ (Financial Times ‘EU Waives Tariffs to Aid Flood-hit Pakistan’, 16 September 2010). Is the EU willing to go beyond rhetoric in its external relations with Africa?
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