Africa feels pain of trade talks with Europe
Reuters | Tue 25 Sep 2007
Africa feels pain of trade talks with Europe
By Ed Harris
PORT LOUIS, Sept 25 (Reuters) — Africans are reluctant to sign new trade deals with Europe that would open the floodgates to cheaper, subsidised products — but some analysts say they can’t afford to refuse.
The European Union (EU) and former European colonies are negotiating new trade and investment agreements to replace preferential deals the World Trade Organisation has ruled illegal and says must be scrapped by the end of the year.
Faced with the end of favourable market arrangements dating back decades, Africa is in a catch-22 situation.
Experts say long-term growth is at risk if the continent spurns a global trend towards liberalisation, but its fragile industries are also threatened with closure if they do.
Economic Partnership Agreements (EPAs) will ensure continued tariff-free exports to Europe, but many Africans say the deals would, in turn, flood their markets with cut-price goods, killing domestic production.
Already, some African nations have felt that pinch because of an influx of cheap Chinese goods.
The debate has whipped up so much opposition that anti-poverty campaigners are planning protests for Sept. 27, dubbing it the global "Stop EPAs Day".
INFANT ECONOMIES
Across the continent, the examples of potential threats are myriad and especially dangerous for countries that lack diversity in their exports.
If EPAs are not in place by Dec. 31, affected African firms will face European import tariffs of at least 8 percent. Other exports could face tariffs of between 5 percent and 25 percent.
Joel Bruneau, general manager of a Mauritius tuna processing firm employing about 2,000 people, is afraid of competition from countries vying for the European market if no deal is struck.
"Our industry is only in its infancy," he told Reuters.
In Kenya, flower growers who supply the EU with more than a quarter of its cut flower requirements, say any deal is better than nothing.
In Ghana, some analysts worry the EPAs will slash government revenue from import tariffs and allow an influx of European poultry that will hurt local chicken and grain farmers.
EU Trade Commissioner Peter Mandelson says African, Caribbean and Pacific countries — grouped into six trading blocs — will lose out if they miss the December deadline.
With so much at stake, west African trade groups are racing to cut a deal by the deadline, said Guy M’Bengue, managing director of Ivory Coast’s private sector export promotion body Apexci.
"We do not envisage a situation where we will not sign," he told Reuters. "The longer this is delayed the worse it is. The stakes are enormous."
Others are less optimistic. The west African trade bloc, ECOWAS, has said talks are likely to drag into 2008.
STOP-GAP AGREEMENT?
Campaigners accuse the EU of pressuring poor nations to sign without giving them room to discuss an alternative even though many of them lack the expertise to push their interests.
"It’s a bit of a David and Goliath situation," said Laura Merrill, an Oxfam fair trade official in Nairobi.
She urges Africans to demand a stop-gap agreement to protect their industries until they are ready to sign the EPAs.
One temporary solution could be the General System of Preferences (GSP+) that allows countries to protect products on which their economies depend for an agreed period.
About a dozen Latin American and Asian producers benefit from GSP+ deals that let them export to Europe without dismantling the bulk of their tariffs.
"Ghana is very qualified for that," said Tetteh Hormeku, head of programmes at Third World Network, a non-governmental organisation in Ghana. "We would be able to export and we wouldn’t need to remove tariffs on 80 percent of products."
Not all African countries stand to automatically lose their European markets on Jan. 1, in the absence of new pacts.
In fact, 33 out of the continent’s 53 countries will still enjoy secured access under an "Everything But Arms" trade pact.
Nigeria, Ghana, Ivory Coast, Kenya and Mauritius are among the nations that do not fall under that category.
"We will never grow if our industries have open competition with those from Europe," said Isaiah Kipyegon, an official of the Norwegian Church Aid advocacy group.
"EPAs are an oppressive tool seeking to liberalise (trade) in all that we live on in Africa."
(Additional reporting by Orla Ryan in Dakar, Peter Murphy in Abidjan and Helen Nyambura-Mwaura in Nairobi)
