The past five years have seen the European Union (EU) and its former colonies in the African, Caribbean, and Pacific (ACP) group locking horns in potentially far-reaching trade and development negotiations. Called “Economic Partnership Agreements” (EPAs), these are ordered in a series of regional processes with the EU playing “hub” to six ACP regional “spokes”, four of which are in Africa. EPAs are intended to replace longstanding EU tariff preferences for the ACP with reciprocal trade agreements.
The clock stands at five minutes to midnight: the waiver expires at the end of 2007. So by January 2008, EPAs must be in place or the current preferential access regime, known as the Cotonou Partnership Agreement, will be vulnerable to more challenges. This is of great consequence for Africa, reliant as it is on exports of various commodities to the EU under the Cotonou Agreement. It is particularly urgent for African states that are not least-developed countries (LDC) to conclude EPAs. The programme for LDCs - the EU’s “Everything but Arms” (EBA) preference arrangement – is permitted under WTO rules as it discriminates on the basis of an accepted development category.
Many African policy-makers, civil society representatives, and western development-focused NGOs argue that the EPA agenda is too broad and intrusive for African countries. Some go further in arguing that the trade liberalisation implicit in it would be harmful to African development. I am in favour of a broad and liberalising agenda under certain conditions. The economics at play convincingly point to the need for it. These consist of well-known African development challenges on which there is a consensus in development circles. Broadly, they can be categorised into two agendas: supply-side constraints, and trade constraints.
Unfortunately there is no guarantee that FDI will flow to Africa if these conditions are met, because markets are small; they are necessary, if not sufficient. Furthermore, the economics and content issues must be related to the capacity of African states both to negotiate EPAs but more importantly to implement negotiated outcomes. This should determine the overall scope of negotiations and commitments, and the manner in which they are sequenced. Unfortunately, the continent suffers from a generalised political and technical crisis of the state. This, and the continent’s aid-dependency means that substantial “aid for trade”, targeted at adoption of regulations and supporting institutions, will be necessary for a long time to come. Efforts to promote greater efficacy of aid disbursements must continue, albeit with the long-term objective of phasing out aid flows altogether.
So it is scarcely surprising that Africa is embracing China with such enthusiasm. The Chinese state does not lecture African leaders on their development priorities. It does not lecture them (nor could it) on democracy and good governance (and unfortunately may promote the reverse). It provides pots of money freely and quickly, albeit opaquely. And its state-owned companies have netted a treasure trove of African resources as they venture where Europeans fear to tread. Last year’s China-Africa summit in Beijing, in which African leaders literally queued up to greet Chinese President Hu Jintao in a nauseating display of fealty, rammed the message home to Europe’s political elite.
So at the end of this year, notwithstanding Mr. Mugabe’s likely baleful presence, Europe will host African leaders in the first Euro-Africa summit in several years. Clearly Europe’s diplomatic leadership has recognised the threat China poses to their long-established dominance of African commodity supplies. If they wish to match this on the trade and aid fronts, they would be well-advised to pay closer attention to the EPA negotiations.
Unfortunately there does not seem to be a political consensus in the European Union to pursue this path.8 Rather, the Commission seems to prefer maintaining pressure on its African partners in order to secure its ambitious agenda. Hopefully EU mercantilism will not stand in the way of an outcome supportive to African development needs.
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