The ACP-EU Trade team recently asked Frederick Alipui – an expert in regional integration and trade issues – about the prospects for EPAs and the Regional Economic Communities in Africa.
What is the impact of Economic Partnership Agreements (EPAs) on the regional integration process in Africa?
The impact of EPAs on Africa cannot be assessed without first considering its impact on the individual African countries that are participating in the EPA process. Therefore in order to assess the EPA impact, one would need to examine a sample number of impact studies that have been conducted for the African countries. On the basis of the same, then one would relate those anticipated results to the overall process of regional economic integration process within the Regional Economic Communities (RECs) on the continent. To cite an example, the ECOWAS case impact studies that have been undertaken for Ghana and Nigeria indicate that the immediate impact of the EPA, would be revenue losses due to the decrease of import duties on more competitive European products. This will not only have an immediate negative impact on the region’s productive sectors, causing job losses and diminishing households’ ability to maintain their livelihood, but will also lead to a shift in the sourcing of imports into the region, notably from Asia to Europe. There is a need for a comprehensive study that would sum up the impact of the EPA process on each RECs’ own regional integration process, on the one hand and at the continental level, on the other hand. This would have to be done within the context of Article 6 of the Abuja Treaty of 1991 establishing the African Economic Community which is an integral part of the Constitutive Act of the African Union. These agreements seek to create over a period 34 years since its entry into force Africa’s own continental Free Trade Area/Customs Union, African Common Market and the African Monetary Union and the African Economic Community (AEC).
How can the EU support African regional integration in the context of EPAs?
According to the provisions of the Cotonou Partnership Agreement (CPA), the EPA is expected to contribute to the deepening of the regional economic integration process in Africa and thereby also contribute to poverty reduction in Africa. But with the expected elimination of customs tariffs on imports from the EU to African countries within the RECs with which they would establish Free Trade Areas (FTAs), cheaper and “subsidized” European imports would surge into their economies, which may also result in increased competition with local manufacturers and their industries. In this respect, I would recommend, inter-alia, that the RECs and the AU may have to negotiate with the EU to put in place, firstly, a substantial investment programme to expand the infrastructure sector in Africa, such as transportation, communication, but also trade facilitation, information and communication technologies (ICT), etc. A second investment programme should give special attention to African countries’ production capacities. Market access programmes have been on the table since the Yaoundé Conventions in the sixties, maintained under the Lomé Conventions throughout the seventies, up to the nineties. Yet, African countries have not been able to benefit from their special and preferential access to the European markets. Then how could EPAs do the trick? Hence the challenge to assist the African countries to expand their production base. We strongly recommend a comprehensive intervention programme with PROINVEST of the EU. Furthermore, assuming that African countries’ production capacities will be enhanced, Africa’s private sector capacities also need to be built. This should include technical assistance to help increase the quality of their export products to the European market and therefore comply with sanitary and phyto-sanitary measures (SPS), notably for fisheries, agricultural products as well as horticultural products.
What role should and can the African Union Commission play in the EPAs?
The African Union already has the mandate to coordinate the regional integration programme of Africa spelt out in the Abuja Treaty. In July 2003, the Maputo Summit reiterated this and gave the AU Commission an extra mandate to coordinate the EPA negotiations process. However, although the decisions have been taken, the AUC has not been able to play these two coordinating roles. Firstly, it does not have the material time to do so due to a lack of human and financial resources. Indeed the staffing situation is critical and has to be urgently improved especially in the Economic Affairs Department as well as the Trade and Industry Department respectively. Secondly, legally speaking, the AUC is not a party to the Cotonou Partnership Agreement and hence does not have a direct legal involvement in the EPA negotiating process. This could be resolved, This could be resolved by amending the Cotonou Partnership Agreement and consequently the negotiating structure accordingly. Furthermore, stronger institutional linkages between the AUC and the RECs should be established, in the form, for example, of Permanent Delegations of the AUC to each of the RECs, with the adequate technical expertise to contribute to the integration process. Another instrument that we strongly recommended in our study is the setting up of a Trade Policy Review Mechanism that would operate as a sub-Committee of the African Peer Review Mechanism. That Mechanism should provide for sanctions for non-compliance of both the EPA and the Abuja Treaty respectively. We further recommend that the AU Panel of Trade Experts, which has already been set up at the AUC level to assist on key technical issues under negotiation, be reactivated. A joint AUC/RECs Secretariat should be established to provide the operational structure to support the African regional integration and the EPA processes, as well as an Integrated Task Force of Sector Directors. This Task Force would meet at least twice a year to develop joint programmes for implementation and undertake joint Annual Reporting to the AU Summit. Between the AUC and the EU there should also be an informal Joint Secretariat to mobilise the required financial and technical support through the European Development Fund instrument for the Joint EU-AUC EPA Monitoring Mechanism which was already put in place by the Maputo Summit of the AU in July 2003. In the most optimistic scenario and notwithstanding funding and staffing issues, this should be decided upon at the next AU Summit in Banjul, so that the AUC and the RECs have the time to develop a joint pre-EPA programme in view of their conclusion in December 2007. But over and above these legal, structural and financial questions, the issue of the AUC’s role in the regional integration and EPA processes has more to do with the political willingness of Member States to actually involve the AUC in their negotiating schemes.