A rethink of the agreements that govern European-African trade would benefit both sides, say Paul Collier & Kalypso Nicolaïdis
7 - 01 - 2008
The media coverage of the European Union-African summit held in
The need to review
But the deal has come unstuck. From 2002, the EU has promoted the adoption of new economic partnership agreements (EPAs) between the EU and six new ACP regions. These EPAs have become the subject of intense controversy, with their advocates (the European commission, led in this area by its trade commissioner Peter Mandelson)opposed by assorted NGOs, academics and a number of other WTO members.This is what the Lisbon summit - characterised by tense discussions between Europe and African states- was really about.
The necessity for reform, as well as the nature of the proposed changes, has been justified by the need to make these agreements compatible with the World Trade Organisation (WTO). The global trade regime allows for trade preferences only when they are either reciprocal (as they are within the EU) or when they are provided to developing countries on a non-discriminatory basis (as with the so-called "general [or generalised] system of preferences" [GSP]).
But the existing EU-ACP agreements are neither. The WTO waiver which made this state of affairs possible expired on 31 December 2007, thus making the preferential trade terms of the Cotonou agreementreached in 2000 no longer legal.
Does this mean that a deal needed to be rushedthrough by the end of the year, even as many of the ACP countries were still reluctant to sign? We do not think so. A great majority of WTO members stood, and still stand, to benefit from a careful revisiting of the EPAs and would not have insisted on a rigid respect of the deadline. Indeed, although close to twenty ACP states have concluded trade agreements with the European Union, most are (unlike the full EPA agreement concluded with the dozen
In full sight
So what could such a rethink consist of? ACP countries in general and African countries in particular need two things from a trade deal that they can't do unilaterally.
First, they need a "commitment technology". The region suffers from a reputation as a high policy-risk environment - an image that events such as the post-election crisis in Kenya only reinforce -so it needs credible means of signalling to the rest of the world that it is locking in its own future policies. The reciprocity requirement of EPAs can provide such an insurance. But
Moreover, such an opening of ACPs need not be discriminatory. The decision to set lower tariffs on goods imported from
The second need of the ACP countries is for improved market access to
Instead, the European commission continues to rely on the outdated argument that its preferential scheme rightly encourages - deep vertical integration of production within single countries. EU experts need to recognise the structural realities of globalisation. The contrast with the success of African garment exports to the United States as a result of thebetter-designed American scheme - the African Growth Opportunity Act (Agoa) - makes the point, albeit here again thanks to a WTO waiver.
The final point is that additions to this core bargain should be avoided in the EPA deals. In particular, EPAs should not beseen as a return to policy conditionality: the reluctant acceptance by African governments of policy change in return for promises of aid. Nor should they be a device for reintroducing issues like investment, procurement, trade in services or intellectual property in forums where these governments are more susceptible to asymmetries of power than in the context of the Doha round which is at last creeping forward. This way lies a car-crash: African governments unwillingly agreeing to changes in which they do not believe. The European Union we believe in can do better.