The Echoes from AEFJN No. 30 - July August 2016 are now available online. 1406 Potential scenarios for the EPAs and implications for the Continental FTA process
The current Trade scenario between Africa and the EU is focused on the Economic Partnership Agreement (EPAs). These negotiations aim at agreements that will entail reciprocal trade preferences between the EU and African countries. On one hand, the EU is anxious to conclude the agreement as it would open African market for EU goods and keep preferential access to the EU’s internal market for African products. On the other hand, many African countries are fighting more determinedly against negotiations they feel have been dominated by the EU.
While the main worries for African countries about the EPAs concern loss of historic revenue and the consequences for the African industry, the EPAs pose other challenges to relationships among African countries that will distort relationships with the EU.
In January 2012, the African Union Summit took the decision to establish a fast-track Continental Free Trade Agreement Area (CFTA) by 2017 with the aim of boosting intra-African trade. For this reason, how different countries progress in the EPA negotiations will have important implications for the promotion of intra-African trade within the context of the CFTA. Many are the challenges that African countries have to face in adapting their industry and economy to the EPAs such as strengthening their capacity for production, improving the infrastructure or streamlining trade facilitation. If African countries sign the EPAs the continent will be flooded with European products and will have to compete with economies that have a high level of development.
In their effort to strengthen productive capacity, the poorest countries in Africa will lose the opportunity to develop their domestic industries in higher value products and will be limited to trade with lower value products. Therefore, what should be an opportunity will in fact be a continuation of the same old situation.
If African countries refuse to sign the interim EPA, some countries will lose preferential access to the European market but will have the opportunity to strengthen their industries and boost intra-African trade. The strengthening of African economies depends on a holistic development of their capacities and industries - not on a potential increase in exports of basic products to western countries.