By THE AFRICA BAZAAR Staff Writer
July 14, 2014
After months of negotiations between West African governments and the European Union, 16 West African heads of state signed the Economic Partnership Agreement (EPA) with the European Union last week.
The Economic Partnership Agreement, which dates back to the signing of the 2010 Cotonou Agreement, aims at promoting trade between the African regions and EU through trade development, sustainable growth and poverty reduction. The EPA involves the EU and its member states.
The EPA was signed by heads of state from Benin, Burkina Faso, Cape Verde, Ivory Coast, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, Togo and Mauritania.
Key focus areas in the negotiations were on strengthening regional integration, developing the region economies by enhancing competitiveness mainly through capacity-building for West African companies and exporters and promoting the agricultural sector in West Africa.
The latest agreement potentially would favor the African nations through increases in the total trade figure.
The West Africa region currently accounts for 40 percent of total trade between the EU and all the ACP (African, Caribbean and Pacific) regions, with Ivory Coast, Ghana and Nigeria accounting for a total 80 percent of the exports to the EU.
European annual exports to the region are worth approximately €30 billion. West African exports towards the EU account for €42 billion.
Despite advanced regional integration processes in the region, barriers to intra-regional trade remain a challenge for the economies in West Africa. Regional trade lags behind compared to trade with developed and emerging countries outside West Africa.
Under the terms of the agreement, West Africa will continue to be able to shield its sensitive agricultural products from European competition either by keeping tariffs in place or, when necessary, by imposing safeguard measures.
West African companies will also have more flexibility to use foreign components while still benefitting from free access to the EU market.
The EU exports to the region are largely dominated by equipment such as industrial goods, machinery, vehicles and transport equipment and chemicals that contribute to the economic growth and development in the region.
A limited number of basic commodities dominates EU imports from the West African countries.
Nigeria is a major oil exporter, recently followed by Ghana. Ghana and Ivory Coast are the world’s two largest cocoa exporters. They also export bananas and, together with Cape Verde and Senegal, processed fisheries products. Other exports from the region include a range of agricultural commodities (mango, pineapple, groundnuts, cotton etc.) and to a far lesser extent metals (copper, gold) and diamonds.
To support local agricultural production, the EU has also agreed not to subsidize any of its agricultural exports to West Africa.
The agreement also takes fully into account the differences in the level of development between the two regions. The EU said it will provide West African firms with conditions that are more advantageous than those that apply to European exports to Africa. In the negotiations, the EU has committed itself to open its market to all West African products as soon as the agreement enters into force. In exchange, the EU has accepted a partial and gradual opening of the West African market.
If and when West Africa will be ready to grant more far-reaching concessions to the Europe’s main competitors, the EU will be able to claim those same improvements, the EU said in a statement.
All the countries in the West Africa region except for Liberia are members of the WTO. Liberia is currently going through the accession process with full support of the EU.