The conditions of trade as stipulated under the Economic Partnership Agreements (EPAs) have been described as too stringent and would further impoverish the African continent by stifling economic growth and development.
Former governor of the Central Bank of Nigeria (CBN) Professor Chukwuma Soludo warned that the EPAs currently being negotiated with African countries, Caribbean and Pacific Group of States (ACP) on sub-regional basis by the European Union (EU) would only fleece the continent despite the seemingly “juicy” promises.
Some of the conditions stipulated by the EPAs, which he said would end up enriching Europe at Africa’s expense, are elimination of tariffs on at least 80% of imports from the EU, abolishment of all export duties and taxes and elimination of all quantitative restrictions, among others.
In order to continue to have access to European markets on the terms that they had enjoyed for more than three decades, African countries are expected to “meet all these and other intrusive and destructive conditionalities that literally tie the hands of African governments to deploy the same kinds of instruments that all countries that have industrialized applied to build competitive national economies,” Soludo warned.
In the last 10 years, the EU has been negotiating the EPAs with the ACP countries as a fully reciprocal trade arrangement to replace the previous non-reciprocal, preferential trade access of ACP countries to EU markets under the various Lome Conventions and the Cotonou agreement.
The EU argues that the EPAs are set out to help ACP countries integrate into the world economy and share in the opportunities offered by globalisation.
Some of the carrots being dangled before ACP countries are that the EPAs are expected to be “tailor-made” to suit specific regional circumstances, open up EU markets fully and immediately, provide scope for wide-ranging trade cooperation on areas such as services and standards, and are designed to be drivers of change that will kick-start reform and help strengthen rule of law in the economic field, thereby attracting foreign direct investment (FDI) and helping to create a "virtuous circle" of growth.
But Soludo has warned ACP governments to look closely at the agreements as they would further impoverish their countries.
So far, only 10 out of 47 sub-Saharan African countries have either signed or initialled the EPAs; trade ministers of the affected regions have largely rejected the agreement.
“Despite all of these, and the reported public protests in 20 countries against the raw deal, it seems all but certain to be rammed through. In private whisperings, not many Africans or policymakers are happy with the deal but there is a certain sense of helplessness,” Soludo wrote.
He went on to point out the inbuilt dangers which might not be obvious to many ACP countries, especially as their advisers and negotiators are Europeans.