‘EPA accord with EU’ll stifle Nigeria’s growth’
This Day (Nigeria) | 02.18.2009
‘EPA Accord with EU’ll Stifle Nigeria’s Growth’
By Crusoe Osagie
Switzerland-based intergovernmental organisation, South Centre, has warned Nigeria and other African nations that the Economic Partnership Agreement (EPA) being proposed by the European Union (EU) will eliminate the capacity of African nations to industrialise within five to 10 years of signing the agreement.
The EU had in the last few years been breathing down the necks of African nations including Nigeria, Ghana, Cote d’ Ivoire, Senegal, among others, trying to goad them into endorsing the EPA, which had been identified by various stakeholders as obnoxious and harmful.
The EU had so far got countries such as Ghana, Cote d’ Ivoire and some others to endorse an interim version of the EPA and had penalised Nigerian exports to EU countries because Nigeria refused to endorse the interim EPA.
South Centre, in a report released to THISDAY yesterday, warned that the way EPA had been conceived, based on the requirement for reciprocal market opening with the EU, is likely to bring more losses than gains to Africa.
According to the group, the EPA gains are not much for African countries, as the Least Developed Countries (LDCs), which make up 34 out of 47 African countries negotiating the EPAs, can avail of the Everything But Arms (EBA) Preferential Scheme of the EU and the value of the preferences African countries will reap from an EPA will essentially become nil in about five to 10 years.
“It is of vital importance for developing and the least developed countries, that the options for industrialisation for future generations are not foreclosed.
“The Economic Partnership Agreement (EPA) negotiations, which African countries are negotiating with the European nations, are unlikely to bring Africa closer to their development objectives. The way EPA has been conceived, based on the requirement for reciprocal market opening with the European Union (EU), is likely to bring more losses than gains for Africa . It will make the path to development even more difficult and uphill than it already is,” the group said.
The Geneva based group explained that while the price to pay for African countries wanting to maintain preferential access into the EU is very high, the value of EU’s preferences is going to diminish rapidly.
“The value of the preferences African countries will reap from an EPA will essentially become nil in about five to 10 years. This is because the EU is already negotiating Free Trade Agreements (FTAs) with Central America, Andean countries, ASEAN, India and others. Therefore, for preferences that will last five or at most 10 years, African countries are being asked to sign away their trade policy space,” the report said.
“In any case, the Least Developed Countries (LDCs), which make up 34 out of 47 African countries negotiating the EPAs, can avail of the Everything But Arms (EBA) preferential scheme of the EU. For non-LDCs, options more supportive of development should be fully explored, including the search for regional and other markets (rather than looking mainly to the EU for export markets), the Generalised System of Preferences plus (GSP+), as well as renegotiating Article 24 of the World Trade Organisation (WTO),” the report said.
South Centre advised that for countries that want to sign an EPA, they should make use of development benchmarks pegged to their trade liberalisation schedules.
This, the group said, will ensure that only when countries attain a certain level of development will they have to undertake very far reaching reform of their trade regimes vis-à-vis a very strong economic partner, the EU.
“Pegging development indicators to countries’ liberalisation schedules, the liberalisation schedules we propose kicks in 10 years after the entry into force of an EPA. If at that time, countries have attained 20 per cent the economic size (measured by per capita Gross National Income and per capita value of manufactured exports) of the EU, and if their exports show a certain level of diversification, they would eliminate tariffs on 20 percent of their tariff lines,” South Centre said.
