Inter Press Service | 28 Nov 2008
Cote d’Ivoire Succumbs to EU
BRUSSELS, Nov 28 (IPS) — Cote d’Ivoire became the first country in Africa to sign an economic partnership agreement (EPA) with the European Union this week, prompting fears that the accord will prevent the country from developing closer ties with its neighbours.
More than 80 percent of the taxes levied on imports from the EU will be eliminated over a 15-year-period as a result of the free trade deal, formally copper-fastened in Abidjan Nov. 26. Under the agreement, Cote d’Ivoire will immediately open its markets to chemicals and vehicles, that it does not produce domestically.
Despite the steep loss in government revenues this will incur for a country where the national income per capita is only 900 dollars a year, the European Commission, the executive arm of the EU, sought to put a positive spin on the deal. It promised that an unspecified amount of aid will be given to help the Ivorian economy adjust to the slump in earnings from tariffs.
Brussels officials have attached the prefix ’stepping stone’ to the agreement, stating that they hope it will lead to a similar agreement involving most, if not all, of the countries in the west African region. Almost 80 countries from Africa, the Caribbean and the Pacific have been involved in EPA negotiations.
"Economic partnership agreements will allow developing countries to benefit from open trade, while protecting some of their key interests over a long period of time," said Louis Michel, the European commissioner for development and humanitarian aid. "They have a strong development dimension, and will bring the reforms necessary for economic integration within the region and beyond."
But anti-poverty activists accused the Commission of putting pressure on the Ivorian government to sign a deal that is not in the country’s interests.
Oxfam argued that after the EU had failed to reach an EPA with the 16 countries in a West African regional grouping during October 2007, it decided to pressure Cote d’Ivoire into signing an accord on its own. Threats were made to punish the country if it did not sign by applying duties on exports to Europe of coffee, bananas and cocoa, according to Oxfam. The group is concerned that by applying a different trade regime to Cote d’Ivoire than to its neighbours, the deal will have deleterious consequences for regional integration in west Africa.
"With this signature, the European Commission is reinforcing its pressure on the entire region," said Jean-Denis Crola from Oxfam France.
Until the end of last year the preferential market access granted by the EU to African exports was subject to a waiver from the rules of the World Trade Organisation (WTO). Crola contended that the Union had unfairly invoked WTO rules to browbeat African countries into liberalising trade.
"Out of fear of being faulted by the World Trade Organisation, the European Commission is putting in danger the imperatives of development and regional integration in West Africa," Crola added. "The signature of a ’stepping stone’ agreement with Ivory Coast (Cote d’Ivoire) reflects the scorn of the European Commission for the internal dynamics of the region."
Nigeria has been the most reluctant country in the region to sign an EPA. Its oil comprises about half of all exports from West Africa to the Union.
While oil has been unaffected by its refusal to sign an accord, according to the Commission, the EU imposed extra duties of 4.3 percent and 6.3 percent on exports of cocoa butter and coca liquor respectively.
With 95 percent of Nigeria’s cocoa exports destined for the Union, the increased levies cost the country about five million dollars by end of March this year. Beverage manufacturers using cocoa have relocated their production from Nigeria to Ghana.
Chibuzo Nwoke from the Nigerian Institute of International Affairs said that the EU has assumed "the amazing double role of partner and umpire" in the EPA negotiations.
While the Commission has been portraying the Nigerian government as recalcitrant, an impact assessment requested by Nigeria predicted that the country would have lost 478 million dollars in revenues this year if it had scrapped most of its tariffs on European imports, as required by an EPA.
"The EPA negotiations exist within a framework of two distinct political groups of vastly different power," said Nwoke. "It is a ’partnership’ between donors and debtors, between benefactors and consistent dependencies, and between former colonial empires and their former colonies.
"It pits a group of the world’s most advanced economies against a group of the world’s least developed, mono-cultural and raw material exporting economies. In such a skewed relationship, it is clear who would drive the negotiations, dictate the rules, enforce them and dole out punishment to partners who breach them."