EU-Africa summit fails on trade

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A major meeting of European and African leaders, aimed at boosting relations between the two continents as China tightens its grip on the former European colonies’ economies, was overshadowed by Africa’s refusal to sign up to comprehensive trade liberalisation agreements.

An EU-Africa Summit in Lisbon on 8-9 December ended with the signing of a strategic political “partnership of equals” that, according to the text, will serve to overcome “the traditional donor-recipient relationship”. The joint declaration promised cooperation on investment, development, human rights and peacekeeping and came with a detailed action plan for the coming three years. 

However, the two continents failed to reach agreement on comprehensive trade deals – the so-called “Economic Partnership Agreements” – that the EU hoped to conclude with African nations before the end of the year. 

“We are not talking any more about EPAs, we’ve rejected them […] we’re going to meet to see what we can put in place of the EPAs,” Senegalese President Abdoulaye Wade told a press conference after the summit.

Instead, the EU signed “interim agreements” with a number of African countries, covering only trade in goods and leaving out sensitive issues, such as opening up developing countries’ services and investment markets. 

European Commission President José Manuel Barroso warned that – apart from the poorest African countries, whose exports would continue to benefit from zero-tariffs under EU trade provisions for Least Developed Countries – those countries that refused to rapidly accept the new trade deal would be faced with the re-imposition of tariffs. 

However, Africa’s negotiating position has been strengthened by its increasingly tight relations with China, which is threatening to knock Europe off the top spot as Africa’s number one investor and trading partner. 

China’s investment approach to Africa – for example offering loans in return for natural resources on a ‘no conditions’ basis – has been much more popular in Africa than the EU’s insistence on tying aid and investment to improvements in terms of democracy and human rights. 

The divergence between the two continents on these issues was highlighted by the presence of Zimbabwean President Robert Mugabe, accused by Europeans of persistent human right abuses in his country and impoverishing his citizens, but defended by many in Africa as an independence hero. His presence at what was only the second EU-Africa summit in the past seven years prompted British Prime Minister Gordon Brown to boycott the whole event. 

European Commission President Jose Barroso defended the proposed treaties, saying: "They will turn our trading relationship into a healthy, diversified, development-oriented partnership." He added that the formulation of interim trade agreements would help avoid trade disruption and was a good illustration of the spirit of partnership between the two continents. 

German Chancellor Angela Merkel said compromise was still possible. "If we don't get an agreement, several of the better developed African countries will be in a worse position on trade with the EU," she said, adding: "It won't impact on the poorest countries but rather all those states that have reached a certain level of development." 

Senegalese President Abdoulaye Wade said: "It's clear that Africa rejects the EPA". He added that the EU was losing out to China in Africa because Chinese products are cheaper and Chinese companies "more pragmatic" and better at carrying out business in Africa: "Europe is close to losing the battle of competition in Africa," he said. 

Botswana's Foreign Minister Mopati Merafe said that although he opposes EU demands to include services in the new trade deals, he was concerned about the failure to come to an agreement. "We would be very unhappy if no agreement was reached by 31 December, which would result in the termination of our preferences for beef,'' he said, adding: "We are the biggest exporter of beef to Europe. We have to secure our beef market." 

African Union President Alpha Oumar Konare criticised the handful of interim trade deals signed, highlighting the danger of "playing certain African regions off against each other." 

"Our dearest hope is that the interim accords don't tie down the rest (of the countries) and complicate things afterwards," he said. "If we build our partnership on the weakness of unity in Africa we'll have problems."

"We need to take the necessary time to conclude fair agreements," he insisted, adding: "Speeding up these negotiations will bring no benefits," and a "hasty deal might come at a tremendous cost to the rural African populations and to African industry". 

World Bank Managing Director Ngozi Okonjo-Iweala, however, defended the EU's position, saying: "Trade liberalisation in many of these countries could and should be a benefit." 

Aid agencies and development organisations, such as Oxfam, have criticised the EU for attempting to "strong-arm" poor countries into free trade deals "that may be very harmful for their economic development". 

"Many African governments have expressed concern about the content and schedule for these negotiations, as have a range of others, including civil society groups, trade unions and the IMF, and yet the EU is being inflexible and insisting on the deadline. If the wrong sort of deals are agreed many very poor people will lose their jobs, and spending on health and education could fall," Oxfam’s trade spokesperson Amy Barry warned. 

The European Union has been negotiating so-called 'economic partnership agreements' (EPAs) with its former colonies in Africa, the Caribbean and the Pacific since September 2002. 

The aim is to replace the non-reciprocal trade preferences granted by the EU to the 77 ACP countries under the existing Cotonou agreement, which was originally intended to span from 2000-2020, but has been contested by other developing countries for being incompatible with World Trade Organisation rules. 

A total of six EPAs were being negotiated, on a regional basis, with groups of countries in West Africa, Central Africa, Eastern and Southern Africa, the Southern African Development Community, the Caribbean and the Pacific. The EU said it hoped to encourage regional economic integration and the elimination of trade barriers among ACP countries, in order to stimulate south-south trade exchanges and boost economic growth. 

However, African nations have resisted pressure from the EU to sign the agreements before a WTO waiver allowing them to continue benefiting from the current framework expires on 31 December 2007.

The EU has warned that countries that have not concluded an EPA with the EU will lose the generous preferences accorded under Cotonou and will have to trade with the EU under the less-favourable terms of the Union's General System of Preference, which is available to all developing countries, including countries such as Brazil and India. 

However, African countries fear that the reciprocal market opening demanded by the EU will not only slash government budgets by eliminating tariff revenues, but also give powerful European companies unlimited access to developing markets, killing off local industry. 

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