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MAN wants Economic Partnership Agreement put on hold

Business Day, Nigeria

MAN wants Economic Partnership Agreement put on hold

6 November 2012

By Siaka Momoh

The much disparaged European Union’s Economic Partnership Agreement (EPA) got a fresh beating Tuesday in Lagos, as the Manufacturing Association of Nigeria (MAN) told a gathering of Industry stakeholders, including EU’s Ambassador to Nigeria, David Macrae, that the EPA Road Map should be put on hold and that the entire negotiation process be subjected to a complete review.

The EPA is essentially a Trade and Development Cooperation Framework between ECOWAS countries (plus Mauritania) and the EU, mandated by the Cotonou Partnership Agreement (CPA) in 2000 and to be consistent with Article XXIV of WTO, conceived as an agreement between two Free Trade Areas or two Customs Unions (FTA + Common External Tariff).

A similar seminar was organized in May 2008 by MAN in cooperation with the Nigerian Economic Summit Group (NESG).

Addressing participants at a MAN seminar, on EU-ECOWAS EPA workshop at MAN House, Ganiyu Giwa, chairman, MAN’s Economic Policy Committee, said, “In order to positively impact on the Nigerian economy, the EPA should be repositioned to facilitate the resolution of supply-side constraints facing the competitive production of goods and services. The capacities of domestic manufacturing and processing sectors should be strengthened to avoid regression and to give a fillip to the competitiveness of the productive sector.”

He said government should take urgent steps to improve the business environment, especially on factors that impact on market infrastructure, transportation and communication transaction costs, supply capacity and productivity; energy and market entry conditions and that sector-based analysis should be carried out to evaluate the specific impact on each sector in order to determine the right liberalization schedules that would not affect Nigeria’s development objectives.

For him, the time frame for the take off of EPA if concluded should be tied to achievement of basic development thresholds in Nigeria and ECOWAS countries and the principle of reciprocity should only commence after the attainment of these thresholds and the Service Sector should be removed from EPA negotiations and made compatible with the stand of developing countries in the WTO negotiation.

As guide for further negotiations, Giwa said “Nigeria’s position should be predicated on the principles of autonomy; realistic appreciation of gains and losses with appropriate safety nets; consistency with national interest and other trade agreement; simplicity and transparency to enhance implementation and limit corruption; and appreciate the limitation of trade policy in addressing structural constraints.”

He said EPA should link up to the region’s strategic development vision and provide support measures and financing framework. “To this end, Nigerian Government should defend the exclusion of the country’s sensitive industrial products from the EPA and the 5th band of the CET should be finalized for such sensitive products. The import prohibition list of banned items should be maintained in order to protect local industries. Nigeria should provide relief packages to the Agricultural sector particularly, for cocoa manufacturers in order to ameliorate the burden faced by Nigeria for not signing the EPA.”

Said Kola Jamodu, president of MAN, “From all available analyses, a badly negotiated or concluded EPA can only spell doom for the more than 250 million people and the private sector in ECOWAS. In this regard, no sacrifice is too great to exercise patience and caution in reviewing all proposals from the European Union.

“The urgent and substantial import liberalization promoted by EPA has the strong potentials to further weaken trade relation which is currently less than 15 percent among ECOWAS members. It follows therefore that if ECOWAS and other regional groups in Africa are made to liberalize their economies at a faster pace and not in line with their respective poverty reduction and development plans, the outcome would further constrain regional cooperation and throw away all benefits associated with regional integration. It is for these reasons that the private sector in Nigeria is unanimous and takes serious exception to any and even act from European Union Commission to induce Nigeria to swallow hook, line and sinker, the bitter pill of EU-proposed EPA. ”

But David Macrae, the EU ambassador to Nigeria disagreed with Giwa and Jamodu. Said he: “What we are saying is that, from day one, West Africa will have total access to Europe but Europe will not have this kind of advantage. The engagement will not be across all trade but only a part of it – between 20 and 30 percent. Secondly, it is not an overnight thing. It is over a long period of time – 15 to 25 years. This is what we are negotiating.”