1412 The TTIP and the consequences for Africa

Fair politics

The Transatlantic Trade and Investment Partnership (TTIP) is a trade agreement presently being negotiated – in secret – between the European Union (EU) and the United States (US). Both parties justify this agreement saying that such partnership will stimulate trade through removing tariffs. But the true intention of the TTIP is to remove regulatory barriers which restrict the potential profits to be made by transnational corporations (TNC) on both sides of the Atlantic[1]. Both arguments promote a deregulation of the global economy and prioritize the interests of the TNC, keeping aside the needs of the population and the necessary measures to assure sustainable development.


The TTIP is a complex agreement and the consequences for Africa are not so evident at first sight. However, the fact that the two biggest world economies are negotiating this partnership has implications not only for their countries but for the global market, especially for developing countries in the South. In the case of African countries there is increasing concern regarding the consequences of a bilateral free trade agreement between EU and US which would provoke trade diversion[2] effects and establish new standards and rules on trade that would be finally imposed on the rest of the world. In this article I will analyse the main elements that are being negotiated between EU and US[3] and the consequences for African countries.


A)     Market access.


The main (official) goal of the TTIP is to remove all duties on transatlantic trade between the EU and US in industrial and agricultural products by way of fostering the liberalization of the market. However, transatlantic tariffs barriers are currently very low and these tariffs are used by the governments to protect national industries and jobs. At the same time the TTIP wants to facilitate the access of private companies as providers of public services and government procurement contracts as a first step to introduce further privatization in sectors such as health and education.

Bilateral FTAs have always consequences not only for the parties implicated in such agreements but for third parties. In this case negotiation between the EU and US will have trade diversion effects for Africa because African exporting producers will have to compete with new and cheaper products on both sides of the Atlantic. It will necessarily affect the trade relations between Africa and both the EU and US, as well as their current trade bilateral agreements. African products will lose their market share in Europe and the US as the latters’ companies increase access to each other's market.


For many years African countries have resisted EU and US pressure to liberalize their markets and eliminate economic barriers. These measures help African countries to protect their infant industry and strength their capacity to produce goods and products with added value in the chain of production. For this reason, the exclusion of African countries from the TTIP negotiations and the elimination of economic barriers mean a disaster treat for African economies because in the long term its goods and products will have to compete with the world largest free trade zone.


B)      Regulatory issues and non-tariffs barriers


The second groups of measures currently negotiated by TTIP are related to non-tariff barriers and regulatory issues. Most of the experts agree that that these questions are the real aim of both parties (EU and US) since the current economic barriers are very low. The EU and US officials would be negotiating these measures in the interests of the TNC since this kind of measures limits the TNC’s     profits. However the main losers of the modification of these measures would be the citizens who would see their protection consumer protection and rights as citizens reduced. 


The modification of sanitary and phitosanitary standards, the lower quality mechanism control or the new consumer and environment protection rules would undermine the progress that social-democratic countries at the EU made after many years of effort. This would reduce the safety of consumers and put at risk the health of the population and the environment as such regulatory harmonization is more interested in decreasing the cost of exports and increasing the profits of TNC.


The new regulatory convergence in the EU and US markets will have a strong impact on African economies. The more powerful position of developed economies will force the South to adapt their own production. The deregulation of non-tariff barriers will oblige African countries to modify their trade relations with other regions in the South and find new production styles, to the detriment of their public enterprises, agriculture and industry. The deregulation will impoverish the fundamental rights of the people in Africa who will have to accept an economic model appropriate to developed countries, but not to subsistence economies.


C)      Global trade Challenges


The third group of measures in the negotiations concern global trade challenges and disputes that have been discussed at the WTO for many years. The EU and US currently have other trade agreements with many other countries and regions in the world. This causes trade distortion and also a lack of coherence between trade liberalization and development policy towards developing countries. While developed countries foster the interchange of products and goods, these trade policies simultaneously diminish the capacity of developing countries to create the conditions to strengthen their economies and create jobs.  


Among the global challenges are the Intellectual Property Rights, sustainable development, food safety standards and the Investor-State Dispute Settlement (ISDS). These challenges are stronger for African countries because the EU and US will strengthen their role at WTO and weaken the resistance of poor countries. While the strategy of TTIP is to increase economic power, the strategy of developing countries is to protect their countries and population in order, for example, to have access to medicines of quality at affordable prices (the case of Intellectual Property Rights); to preserve the environment and deal with the effects of climate change; and to maintain their independence without renouncing their sovereignty in favour of third trade international courts (as with the Investor-State Dispute Settlement- ISDS).




The TTIP affects not only the people of the EU and US but would also have negative impacts on third parties. The people would suffer a loss of their rights, consumer protection and their traditional way of subsistence. The economies in African countries and other developing economies would have to adapt to new rules that only benefit the Transnational Corporations. The creation of the biggest world free trade area would distort the economies in Africa that, unable to compete with more efficient ways of production, would lose their share in the EU and US markets.


 The TTIP is an attack against Democracy and in Africa could affect the population because it consolidates the power of TNC to the detriment of the population. AEFJN insists on the need to push for a fairer strategy at EU level , one that contributes to sustainable development and the well-being of citizens (high levels of environmental protection, decent jobs in Europe and in Africa) not only to growth for a few.


José Luis Gutiérrez Aranda

Trade Advocacy Officer

[1] John Hilary, The Transatlantic Trade and Investment Partnership, Rosa Luxemburg Stiftung, February 2014.

[2] In an international trade situation, a trade area that is able to offer a lower cost product for importation into a particular country tends to create a trade diversion away from another importer or local producers whose prices are higher for a similar product.

[3] DG Trade European Commission, Member States endorse EU-US Trade and Investment Negotiations, http://trade.ec.europa.eu/doclib/press/index.cfm?id=918

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