logo logo

Ivory Coast initials interim trade deal with EU

Reuters | 8 December 2007

Ivory Coast initials interim trade deal with EU

By Peter Murphy

ABIDJAN (Reuters) — Ivory Coast inked an interim trade accord with the European Union on Friday as the bloc pushes for deals with as many former European colonies as possible before preferential trade terms expire on December 31.

The top cocoa producer is the first West African country to sign a bilateral deal, breaking ranks with the region’s ECOWAS economic community which hopes to extend decades-old trade terms deemed illegal by the World Trade Organisation.

"We think we have a good agreement. It is a consensual agreement between the private sector, the Ivorian government and the European Union," Ivory Coast’s African Integration Minister Amadou Kone said at the signing ceremony.

The interim deal will provide for the gradual abolition of trade taxes, notably tariffs on goods imported into Ivory Coast from Europe, except for a limited list of "sensitive products" drawn up during more than a week of negotiations.

The agreement is effective from January 1 but may not be signed until June. It foresees dismantling of tariffs over 15 years on 80 percent of goods entering the former French colony.

Kone told Reuters that as part of tax reforms required to comply with WTO rules, a 220 CFA/kg export tax on cocoa, a major source of income, would eventually be repackaged as a tax levied earlier in the supply chain before the export stage.

"We have another 10 years for that. For the moment we will carry on as normal," he said.

The European Union will compensate Ivory Coast for lost tariff and customs income and provide expertise to help local industries, particularly food processors, become more efficient to withstand competition from European imports.

"The initialing of the agreement secures access for Cote d’Ivoire exports to EU markets and removes the risk of trade disruption on 1 January 2008," the European Commission said.


Oxfam said the deal undermined regional integration. "It risks destroying an economic community being built in one of the world’s poorest regions," the international charity said.

"It is ironic that on the eve of the (EU-Africa) Lisbon Summit, which is meant to increase partnership, the European Union seeks to divide African countries."

Brussels hopes ECOWAS states will eventually agree on a broader Economic Partnership Agreement (EPA) for all its 15 members and adjoining Mauritania, which together form one of six regions around the world negotiating EPA deals with Europe.

The new deals will replace preferential trade terms offered to nearly 80 African, Caribbean and Pacific states which the WTO has deemed illegal and says must end on December 31.

In West Africa, Ivory Coast, Ghana and Nigeria would be hit hardest if they failed to sign a deal by the end of the year.

They do not qualify for continued tariff-free or reduced-tariff access to the EU market under Europe’s "Everything but Arms" initiative granted to poor countries.

Ghana has backed ECOWAS demands for Brussels to request a further WTO waiver on the existing trade preferences, a request the EU’s European Commission executive has resisted.

Ivorian ministers said Ghana was making progress on its own deal and said they would meet Nigerian officials shortly.

 source: Reuters