ECONOMIC PARTNERSHIP AGREEMENT (EPA) WITH WEST AFRICA

In “A Stronger Europe in the World”

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Background and state of play

In 2002 the European Union launched negotiations to conclude free trade agreements with different configurations of ACP countries, called Economic Partnership Agreements (EPAs). One of the groups to be covered by such an agreement is made up of 16 countries in West Africa - the 15 members of the Economic Community of West African States (ECOWAS) plus Mauritania. ECOWAS is itself a party to the agreement, as is UEMOA (the West African Economic and Monetary Union), a further level of regional integration comprising 8 ECOWAS countries. The negotiations with West Africa started in 2003 and lasted until 2014, when the text of the agreement was finally initialled by the chief negotiators.

According to the Council negotiating directives, the overarching objective was to conclude an agreement that would promote the smooth and gradual integration of West-African partners into the world economy, spur sustainable development and reduce poverty. A more concrete objective was to assure further free access for West African countries to EU market in line with WTO rules. Since some of the countries in West Africa had graduated from the status of least developed countries (LDCs), without a free trade agreement they risked losing free access to EU market; the EU can grant such access unilaterally only in a non-discriminatory fashion, and it has limited it to LDCs. This situation has been of particular concern to Ghana and Côte d'Ivoire, two middle income economies that export agricultural products to the EU for which they benefit from tariff exemptions.

Content of the agreement

The agreement provides for asymmetric liberalisation of trade in goods. While the EU will fully open its market, the African partners can maintain tariffs on 25% of tariff lines in order to protect sensitive sectors. The agreement sets the objective of pursuing sustainable development at all levels of the economic partnership. The agreement establishes a dedicated development programme, endowed with 6.5 billion EUR for the period 2015-2019, in order to support its implementation.

In order to protect the parties from the potentially harmful effects of trade liberalisation, the agreements provides for a series of safeguards, including the temporary imposition of customs tariffs and quantitative restrictions in case of a sudden surge in imports threatening local producers. Certain export taxes are temporarily allowed in order to protect infant industries in West Africa. The agreement contains a rendezvous clause providing that the parties will start negotiations on a comprehensive agreement covering services, capital transfers, competition, investment, copy right and sustainable development.

The debates on the agreement have focused mainly on two crucial issues: the potential disruptive effects of trade liberalisation on agricultural and industrial sectors in West Africa, and the loss of customs duties - an essential source of government revenue in many countries in the region.

Concerning the first aspect, during the negotiations phase, civil society organisations from Europe and West Africa as well as West African farmer associations have expressed their concerns about the potential effects on the West African agriculture. Responding to such concerns, the final text of the agreement protects many sensitive agricultural products at the same level as the ECOWAS Common External Tariff. The agreement also includes substantial safeguards for protecting emerging industries.

Concerning the second aspect, the loss of tax revenue, when liberalisation is completed, is estimated by the European Commission to be lower than the GDP growth expected as a result of the EPA. Government revenue in the region should decrease by 2% by 2035 because of the EPA, but the agreement provides for dialogue and cooperation on the matter, including financial resources.

Status of the procedure to adopt the agreement

The agreement was signed by all EU Member States in December 2014. So far, 15 of the 16 West African countries have also signed it, most recently the Gambia and Mauritania in 2018. However, the EPA needs to be signed by all West African countries to open the way to provisional application. Nigeria is the only remaining West African country that has to sign the agreement. It is the region's biggest economy and its endorsement of the EPA is crucial. The administration of President Buhari has been opposed to the agreement allegedly in order to protect national industries and to create local jobs for young people. Buhari's re-election in February 2019 signals that probably there will be no quick ratification of the agreement. Nigeria has a long tradition of protectionist policies, with a questionable record – as its current economic woes show. This policy may be however shifting. In July 2019 after much hesitation, Nigeria signed the Africa continental free trade agreement. The two regional organisations in West Africa, ECOWAS and UEMOA, support the EPA. ECOWAS has encouraged all its member states to proceed with the signature.

In order to fully enter into force, the Agreement will have to be ratified by the EU (which implies the consent of the European Parliament), by all EU Member States, and by at least two thirds of West African States.

Position of the European Parliament

During the EPA negotiations, the Parliament supported the objective of concluding asymmetric trade agreements with ACP countries that promote sustainable development, regional integration, and a reduction of poverty. It encouraged the Commission to adopt a flexible and pragmatic approach to negotiations with West Africa. It also insisted on the inclusion of appropriate provisions for the protection of human rights and good governance in the agreement.

The EP decided that the work on this file should be continued in the new term. Jude Kirton-Darling (S&D) is the new rapporteur for the procedure in the INTA Committee.

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Further reading:

Author: Ionel Zamfir, Members' Research Service, legislative-train@europarl.europa.eu

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As of 20/05/2022.
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