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What Next for the Economic Partnership Agreements? Thoughts on Deepening the EU-Africa Trade Partnership

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What Next for the Economic Partnership Agreements? Thoughts on Deepening the EU-Africa Trade Partnership A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Brandi, Clara; Hulse, Merran; Keijzer, Niels Research Report What next for the Economic Partnership Agreements? Thoughts on deepening the EU-Africa trade partnership Briefing Paper, No. 9/2017 Provided in Cooperation with: German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE), Bonn Suggested Citation: Brandi, Clara; Hulse, Merran; Keijzer, Niels (2017) : What next for the Economic Partnership Agreements? Thoughts on deepening the EU-Africa trade partnership, Briefing Paper, No. 9/2017, Deutsches Institut für Entwicklungspolitik (DIE), Bonn This Version is available at: http://hdl.handle.net/10419/199797 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu Briefing Paper 9/2017 What Next for the Economic Partnership Agreements? Thoughts on Deepening the EU-Africa Trade Partnership Summary Scenario A: Continuing the current EPA strategy Many actors in the G20, the EU and Germany are calling for Scenario B: Discontinuing EPA negotiations a quantum leap in the economic co-operation between Scenario C: Resuming EPA negotiations on a new basis Europe and Africa. However current discussion of EU-Africa trading relations frequently focuses solely on the much- Scenario D: Pursuing an adapted and more flexible EPA debated Economic Partnership Agreements (EPAs). agenda EPA negotiations date back to the 2000 signing of the The discussion of these scenarios shows that EPAs offer key Cotonou Partnership Agreement (CPA) between the EU benefits to EU-Africa trading relations, for example by and the African, Caribbean and Pacific states (the ACP strengthening legal security for the parties involved group). The ensuing negotiations took a highly contro- (Scenario A). The discontinuation of negotiations (Scenario versial contentious turn, culminating during the 2007 EU- B) offers no solution for the future of EU-Africa relations, Africa Summit, when African heads of state and govern- with a restart of these (Scenario C) also offering little ment accused the EU of looking to conclude trade agree- prospect of success. We therefore urge the adoption of a ments between fundamentally asymmetrical markets. modified and more flexible EPA agenda (Scenario D), which In light of the upcoming EU-Africa summit in November specifically addresses the concerns of the ACP countries, 2017, it is important to continue the dialogue regarding reinforces African regional integration processes, and what the EU and Africa wish to achieve with the EPAs. EPAs delivers more supportive measures than a continuation of could contribute to the strengthening co-operation the current strategy. between the EU and Africa by forming part of a broad It is not helpful to consider the EPAs in isolation from the strategy supported by adequate political, human and broader field of trade and development and expect them to financial resources. EPAs however remain a divisive topic, deliver substantial results on their own. If the current with many actors having divergent expectations. Yet in impasse is to be overcome, all actors – whether critical or spite of ongoing controversy regarding EPAs on both sides, moderate – need to take part in explicitly interest-led there remains a strong common interest in intensifying discussions. Scenario D offers the possibility of the EPAs trade co-operation between Africa and the EU. forming an integral element of the debate regarding Against this background, this paper examines four trade and investment, whereas to date they have formed possible scenarios for the future of the EPAs– with their more of a separate thread of discussion in EU-Africa respective opportunities and risks: relations. What next for the Economic Partnership Agreements? Thoughts on deepening the EU-Africa trade partnership Introduction: EU-Africa trade relations The current EPA impasse Strong political relations between Africa and Europe are A number of African states – namely Burundi, Nigeria and more important than ever before. Challenges such as Tanzania – are delaying ratification of their respective instability, terrorism, migration and climate change point regional EPAs with the EU. Nigeria argues that the EPA to the need for greater co-operation, while Africa also has undermines its industrialisation strategies, while for the potential to be an important partner for Europe in Tanzania, Brexit is considered to render an EPA with the EU forthcoming challenges to the international liberal order. less attractive. Negotiations in Central and Eastern Africa are Trade policy is an indispensable element of EU foreign faltering; with no regional EPA thus far concluded. This relations and closely connected to other policy areas. The means that the EPA with SADC (currently provisionally EU and the German government increasingly acknowledge applied) is likely the only regional EPA in Africa that will enter this, and the current German initiatives (Marshall Plan with into effect in the near future. Africa & Compact with Africa) emphasise the need to EPAs also face challenges related to faltering regional strengthen and deepen economic and trade policy co- integration processes in Africa. Discussions towards an operation with Africa. ambitious continental free trade zone are continuing, yet under current conditions, the agreed deadlines for achieving Unfortunately, EPA negotiations largely lacked such an integration milestones appear unrealistic, while technical integrated approach, resulting in largely unsuccessful and political obstacles to increasing intra-African trade outcomes during the first phase of negotiations that lasted remain. until December 2007. No regional EPAs were concluded, only bilateral interim agreements with middle-income In confronting these challenges, the African states also face a countries. The EU subsequently set new deadlines for 2014 highly fragmented framework with regard to EU trade policy. and 2016 to force the pace of negotiation and ratification. Some African countries are covered by unilateral EU However, so far only one regional EPA – with the Southern preferences (Everything But Arms, EBA; Generalized System African Development Community (SADC) – is being of Preferences, GSP), whilst others are covered by regional or provisionally applied. In other regions, bilateral EPAs with bilateral EPAs, or not covered by any EU framework at all. individual countries have been the sole outcome as The various schemes (including different EPAs) include regional EPAs have fallen by the wayside. As a result, there differing obligations and commitments to the EU, which will are numerous challenges in the realisation of both EPAs be difficult to harmonise within a continental framework. and the more comprehensive agenda of intensifying co- Whilst some have a long-term view of the EPAs as an interim operation with Africa and countering the institutional step towards a pan-African free trade zone, critical fragmentation of EU-Africa trade policy. opponents see EPAs as hindering regional integration processes through unintended negative effects. Firstly, the controversy over EU-Canada and EU-United States trade agreements may contribute to a greater How to proceed? impetus for the discussion of EPAs and their effects, There are several of starting points on which to build. Firstly, including in Germany. In addition, a perceptible decline in the EU should implement the decision to rework the 2007 US support for an open, liberal, multilateral trade system “Aid for Trade” strategy, also to take into account the may also contribute to a hindering of further progress on priorities expressed in its 2016 “Trade for All” strategy. The EPAs and further erosion of liberal multilateralism. “Aid for Trade” strategy should be converted from a mere Secondly, increasing nationalism and/or anti-globalisation overview of trade-related measures of development co- movements at the European level represent a challenge for operation into a realisable strategy that ensures that EPAs both EPAs and the proposals aiming for closer co-operation can achieve trade and development goals. with Africa. Against this background, the German govern- Secondly, policy-makers should acknowledge that the EU’s ment needs to conduct a structured dialogue regarding free reaction to the refugee crisis in the shape of EU mobility and fair trade with relevant actors in society, in order to partnerships has had the effect of
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