Author: Cheikh Tidiane Dieye
Site of publication: Africa Policy research Institute (APRI)
Type of publication: Short Analysis
Date of publication: 22, November 2021
From 2000, following the first Europe-Africa Summit held in Cairo, the trade relationship between Europe and Africa entered a new phase with the conclusion of the Cotonou Partnership Agreement, providing the framework for new trade cooperation that is to be built around the Economic Partnership Agreement (EPA).
Trade relations between the two continents have evolved through history under the influence of strategies and policies that were initially imposed on Africa by Europe, then developed for Africa by Europe, and that are now made in collaboration with Africa.
Trade preferences: mixed economic results against a background of historical misunderstandings
As is the case for all ACP (African, Caribbean and Pacific) countries, African exports to Europe consist almost exclusively of raw and largely unprocessed materials. Conversely, in the same period, they imported most of their food and capital goods needs from Europe.
Another feature of this period consistent with present day realities is the primacy of their economic links with Europe to the detriment of trade between African countries themselves. Each of these countries traded more with Europe than any country within its own regional integration community.
The Economic Partnership Agreements: a liberalisation ambition out of reach for African LDCs
In the Cotonou Agreement, Europe’s demands were deemed too ambitious, disproportionate and unfair in relation to the economic capacities of African states, most of which belong to the category of least developed countries (LDCs).
By demanding an 80% opening of the ACP regions’ market over a period of 15 years, the effort towards liberalisation imposed by the EU on these countries proved to be unrealistic.
Despite its initial presentation as an instrument that could enhance integration, the EPA ultimately functioned to disintegrate regions. This can be seen in the emergence of several different trade regimes between members of the same region and Europe.
Overlap between the EPA and the AfCFTA: an additional challenge
The AfCFTA is designed to establish an intra-African regime of preference and to present African countries with the possibility of granting one another trade benefits without the involvement of third countries. However, this can only be optimally deployed if trade benefits between African countries are secured.
In the Cotonou Agreement, Europe’s demands were deemed too ambitious, disproportionate and unfair in relation to the economic capacities of African states, most of which belong to the category of least developed countries (LDCs)
The EU, which enjoys substantially similar trade benefits under the EPAs as those obtained by African countries through the AfCFTA, would then be a direct competitor in the African market.
The inclusion of the most-favored-nation (MFN) clause in the EPA could pose a threat to the AfCFTA. This clause obliges African signatories to extend more favourable trade benefits to Europe than to any other major trading partner. The activation of this clause in the EPA could undermine the efforts of African countries to diversify their partners.
What place is there for North Africa in the Africa-Europe and Europe-OACP partnership?
North Africa is the EU’s most important partner on the African continent. It provides almost half of the trade between Africa and Europe. North Africa is not included in the OACP group or covered by the Africa Protocol of the EU-OACP Agreement.
As a result, African countries will need to maintain efforts to reconcile existing legal frameworks and to deepen dialogue with the EU in order to avoid duplication or worse, contradictory commitments or decisions.
Making a new start…
From a position of quasi-monopoly in the aftermath of independence, Europe has seen its share gradually disappear to China, other emerging countries and also to Africa itself. Although it is still emerging, real intra-African trade is experiencing an evolution.
A change of methods is needed to move away from the utilitarian, short-term and free-trade expectations that led the EU to impose unjust EPAs in the first place, towards strategies that are rooted in co-production, sustainable partnerships and the co-construction of Euro-African value chains
However, Europe is still the continent’s lead trading partner. Many actors in Africa and Europe have called for a re-foundation of the economic and trade partnership between them based on new principles and bases. Achieving this ambition first requires a change in behaviour.
For Europe, this means abandoning the paternalism that underlies its relations with Africa and moving away from a spirit of conquest towards one of sharing.
Africa should move towards utilising its assets and potential by positioning itself as a true commercial partner.
A change of methods is needed to move away from the utilitarian, short-term and free-trade expectations that led the EU to impose unjust EPAs in the first place, towards strategies that are rooted in co-production, sustainable partnerships and the co-construction of Euro-African value chains. This option would make it possible to move on from the limitations of existing trade preferences towards more productive ones that are better adapted to current economic realities.
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