EPAs and the Economic impact on African Countries

Some African regions and countries have been experiencing, for some months now, a new EU pressure campaign to sign an economic partnership agreement.[1] On the one hand, the EU is impatient with the slow pace of EPA negotiations. On the other hand, we find African countries and regions that are reluctant to accept unfair economic conditions that threaten poverty reduction and the sustainable development of their countries.

                One of the most contentious points that highlights the potential economic injustice of the EPAs for Africa concerns tariff elimination. These tariffs are taxes that African countries apply, to protect their national economies, to European and other third country products sold in their territories. These duties make imported goods and services more expensive for consumers. Furthermore, the African governments use this income "to raise revenue or to protect domestic industries from foreign competition."[2]

                Among the objectives of these EPAs one is especially important: the progressive elimination of tariffs for European products. The immediate consequence would be the lower price of these products in African countries.[3] This might seem at first glance something positive for those with lower salaries in Africa. However, it will become, even in the short term, a real threat to the economies of the poorest countries. Let us look closely at the effects of tariff elimination on Africa and its regional economies.

                Firstly, these tariffs are a significant source of income for governments in Africa that can be invested in their domestic economies, e.g. in infrastructure, health, education, or culture. So a reduction in this revenue will lead to a worsening of the essential public services that a state should guarantee to those with fewer resources. The EU is reluctant to listen to the least-developed countries that insist they cannot exceed a 60 or 70% liberalisation of trade in goods in 20 or 25 years - whereas the EU wants 80% tariff elimination in 15 years.[4]

                Secondly, these tariffs help protect the national and regional economy in Africa. In general, the production processes in African countries are much more expensive than in Europe and transport and the raw material needed are more expensive. Industrialization and mechanization of production is more developed in Europe which makes the final price of goods cheaper. When tariffs are applied to foreign products it helps protect African economies as it aligns prices. This will allow African business to compete with products coming from Europe.

                If current tariffs stop being applied to European products and services, the latter will be much cheaper and the profits of local businesses will go down because it will be difficult to compete with European products. In Africa, millions of people depend on commodity production, production dominated by subsistence agriculture that provides livelihoods. Small and medium enterprises in Africa need to be stimulated by their Governments. Enterprises are the backbone of the local financial sector and if their economic growth diminishes it will suffocate not only the private sector but also the public services. 

                Furthermore, this has consequences for regional integration. When a region loses any kind of goods production it has to look to other countries and regions for them. It means that prices will increase again and European enterprises will overwhelm the African markets.

                Thirdly, the interim EPA forbids new export taxes and restrictions unless the EU allows them. This means that countries cannot apply taxes to their raw materials (mainly minerals and oil) that could be an important source of income for some African governments. This prohibition is in clear contradiction with the provisions of the WTO that "gives developing countries the right to protect their markets from imports in order to promote the establishment or maintenance of a private industry. It Also Gives Developing Countries The Right to Protect Their markets from Imports in cases of balance-of-payments difficulties.”[5]

                These EPAs requirements cause African governments to lose the ability to create and design their own economic policies. The requirement to reduce or even prohibit tariff barriers threatens democracy in African countries, preventing their governments from deciding on future economic strategies as well as measures that promote economic initiative. The states should be proactive in trade and industrial policies and able to adapt them as time and circumstances change.[6]

                These three consequences of EOAs will impact most intensively on the population. If states lose economic capacity and their ability to decide on their economic policies and if they lose their production structure, the poorer people will suffer severe long-term consequences. The EU must end its out-dated patronising way of dealing with Africa. The tendency to tell Africans what is good for them is one reason why the EPA negotiations have run into difficulty[7].

                African countries need to preserve their sources of wealth in a sustainable manner to keep on the path to economic development. The European Union has to understand that it cannot prioritize (impose) its economic interests upon a population that is at a clear disadvantage. If the EU wants to maintain its economic status it has to listen to the voice of Africa and it has to respect the basic principles of freedom and independence of African countries as the only ones entitled to decide their future.


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José Luis Gutiérrez Aranda

Policy Officer

Africa Europe Faith and Justice Network

[1] Currently, few countries have signed interim EPAs. Because of this, the EU is threatening several countries with a change in their category of least developed countries. These would then lose their favourable trade status with Europe (Regulation 1528).

[2] Evolution of the EU's Trade Balance with African ACP Countries http://trade.ec.europa.eu/doclib/docs/2011/january/tradoc_147192.pdf


[4] The EU’s failure to impose comprehensive, deep integration agreements on Africa and the Pacific.


[5] http://www.wto.org/english/tratop_e/devel_e/d2legl_e.htm

[6]  The EPAs and Risks for Africa, southcentre.org

[7] Ascending Africa: Challenges and opportunities, Friends of Africa. Policy Briefing

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