Intra-ECOWAS trade should be first priority, not signing EPA

Tuesday, October 24, 2017

The West African bloc, ECOWAS, should make it its first priority to improve trade among member states than go in for the Economic Partnership Agreement (EPA) proposed by the European Union.

This was the advised of the UN Economic Commission for Africa (UNECA) after an extensive study of the EPA in light of its advantages and disadvantages and related issues for ECOWAS.

“Africa, ECOWAS, and other regional blocs should first improve the trade among themselves, after that they could sign trade agreements with others and they will reap more benefits,” said Dr Dimitri Sanga, West Africa director of ECA. 

In spite of the implementation of the ECOWAS trade liberalisation scheme, which aimed at boosting intra-regional trade, evidence showed that the intra-ECOWAS trade, as a percentage of total ECOWAS trade, was highly insignificant.

According to the ECOWAS Statistical Bulletin 2008, between 1999 and 2006, the total intra-ECOWAS trade was 12 per cent of the total ECOWAS trade.  The 2016 statistics shows no improvement.  This is insignificant compared to the European intra-regional trade of about 60 per cent of total trade.

For this reason, the ECA West Africa director said blocs like ECOWAS should first prioritise promoting trade among its member states than with the outside world.

“If we are able to improve intra-ECOWAS trade first, the benefit we will reap by signing the EPA will be five to six times more significant,” Dr Sanga said in an interview with this paper on the sideline of the launch of the Network of Economic Journalists for West Africa (NEJWA) by UNECA in Dakar, Senegal, recently. 

The EPA is EU-proposed bilateral trade deal with ECOWAS, alongside Mauritania.  Following more than ten years of negotiations, the final version of the deal was confirmed in June 2014.

In July 2014, ECOWAS heads of state endorsed the agreement and opened it up for signature by member states.  To date, 13 of the 15 ECOWAS member states signed the agreement.  The Gambia and Nigeria have not yet signed, besides Mauritania.

Given that the agreement requires the signature of all ECOWAS member states to become effective, it is still not implementable.  Though the EU is apparently courting The Gambia’s new leadership, the focus is almost entirely on Africa’s largest economy, Nigeria, which cites a number of equity and industrialisation concerns as motivations for not signing the EPA.

The EPAs is built on reciprocal, but uneven liberalisation of trade in goods, offering ECOWAS 100 per cent immediate tariff-free access to the EU market in return for gradual liberalisation of 75 per cent of the ECOWAS market.

“This is a very good thing on paper but effectively, you have to have something to sell; if you don’t have manufacturing sector that is well prepared to produce a variety, what are you going to export to the EU,” Dr Sanga said.

“So if you are not well prepared, even if the market of Europe is open to you more than 100 per cent, you will only sell 2 or 3 commodities; you wouldn’t be able to reap the maximum benefit from that agreement.  So going for such agreement at this stage doesn’t make sense.”

On the other hand, Dr Sanga said, the European entrepreneurs will send to ECOWAS all the products from soft drinks to rice, to cassava.

He said even if ECOWAS member states managed to have small industries that produce and pack some very good products for export; there are phytosanitary laws in the EU that have to be respected for the products to enter the European market. 

“So on paper, they tell you the market is open 100 per cent but those barriers created by the phythosanitary laws will not help you to tap the market 100 per cent,” he said.

The ECA official said their advice to ECOWAS and other countries is that if ever they decide to go in for the EPA, they have to negotiate with the EU to make sure that capacity building component is part of the agreement. 

“That will help to bring our industries at a level to meet up the phytosanitary measures of the EU,” he said.  “In that case, they could go in for the agreement knowing that they will benefit from the capacity building to enhance their standards.”

Author: Lamin Jahateh
Source: Picture: ECA West Africa Director Dr Dimitri Sanga