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Nigeria "threatens" neighbours in wake of bilateral EPAs

Inter Press Service | 2 June 2008

TRADE : Nigeria ‘‘Threatens’’ Neighbours in Wake of Bilateral EPAs

By Aileen Kwa*

GENEVA, Jun 2 (IPS) — West African states are working at salvaging regional relations with a renewed attempt to collectively negotiate an economic partnership agreement (EPA) with the European Union.

Talks have taken place at regional level since Ghana and Cote d’Ivoire each initialled their own EPA with the European Union (EU), putting the two countries at odds with their neighbours who had all declined to initial an agreement.

IPS has been able to confirm that the member states of the Economic Commission for West African States (ECOWAS) have agreed that the body would coordinate the region’s negotiations with the EU from now on until June 2009, the target date for conclusion. This will be done with the assistance of the West African Economic and Monetary Union (WEAMU).

This decision flows from a meeting held between Nigeria, Cote d’Ivoire and Ghana and the ECOWAS Secretariat in early January this year.

These three states are the only ones in the region without least developed countries (LDCs) status. This explains why Cote d’Ivoire and Ghana felt pressured to sign EPAs last year, since their exports to the EU market would otherwise have met with higher tariffs. LDCs are able to continue their exports to the EU at zero tariffs under the EU’s Everything But Arms trade preference policy.

IPS received conflicting reports that Nigeria threatened its neighbours to achieve this decision.

Speaking to IPS, Ndiogou Fall of a West African farmers’ organisation known as ROPPA, said, ‘‘Cote d’Ivoire was told by Nigeria that they would have to pay higher taxes on products they export to Nigeria if they did not align themselves with the ECOWAS in the EPA negotiations. As a result Cote d’Ivoire retreated from its stand.’’

Fall said that Ghana, too, was told that it could face higher tariffs from the big Nigerian market.

Nigeria accounts for 61 percent of the region’s real gross domestic product and therefore is an important market for the other countries in that region.

However, this was denied by a West African government official, who declined to be named due to his involvement in the process. ‘‘At no stage did that kind of thing happen. The January meeting was not hostile.’’

Arianne Idzenga of Oxfam International added that, ‘‘what was even a stronger signal from Nigeria to Cote d’Ivoire and Ghana was its announcement to suspend the talks for a common external tariff for the region.

‘‘Since the ministerial meeting in early 2008, when the region aligned their positions anew, ECOWAS’s negotiations on a common external tariff have resumed and Nigeria is participating’’.

Now, according to the West African official, ‘‘in West Africa, we are not divided. Cote d’Ivoire and Ghana did what they needed to do to avoid economic collapse. If there is a contradiction, it is because these countries have initialled. But we are now determined to work together towards a comprehensive EPA.’’

He conceded that there may still be problems ahead. ‘‘For now, nobody is really concerned (about the fact that these countries have initialled). Those (interim) texts have been frozen, pending the ECOWAS process. The concern will arise when the European Commission says, ‘Ghana, please sign and ratify the interim EPA’. That is when we will have a problem.’’

The countries are well aware that their regional designs can collapse at that point. The reason is that the common external tariff regime which western African states decided in 2001 to conclude is impossible if Ghana and Cote d’Ivoire go through with their bilateral agreements with the EU.

To make matters even more problematic, indications are that Cote d’Ivoire has continued its bilateral negotiations on its own despite the renewed regional effort. Ken Ukaoha, president of the National Association of Nigerian Traders (NANTS), told IPS that ‘‘rumours have it that Cote d’Ivoire is doing some negotiations bilaterally’’.

This was confirmed by an inside source who declined to be named. He described the present situation as ‘‘quite chaotic. It is strange since these countries should converge on a regional text. There is no information-sharing mechanism in the region. If this continues, there is a strong likelihood that they would end up diverging’’, the source told IPS.

According to a joint research paper by the Overseas Development Institute (ODI) and the European Centre for Development Policy Management (ECDPM), published in March 2008, the individual EPA signed by Cote d’Ivoire requires liberalisation from 2009 onwards.

Between 2009 and 2012, 60 percent of Cote d’Ivoire’s imports from the EU are supposed to be liberalised. Ghana’s liberalisation timetable also starts in 2009, with 70 percent of imports to be liberalised within the first 10 years.

If implemented, the different EPA market access schedules will throw ECOWAS’s attempt at establishing a common external tariff into disarray. After all, the two bilateral EPAs were based on Ghana and Cote d’Ivoire’s individual tariff schedules.

The West African official told IPS that, ‘‘the basis for market access for the EC should be ECOWAS’s common external tariff and not individual country schedules. Otherwise we will end up with multiple access conditions for the EU.

‘‘Some of our members do not have established industrial sectors, for example. Working from their individual schedules, it may be possible for them to grant zero tariffs for industrial goods from the EU. But what happens to other members that have an interest in protecting their industries ?’’

Meanwhile, the EU has organised a seminar in Bamako, Mali, which started on May 29. The Europeans have characterised it as an ‘‘information seminar’’ to update state and non-state actors on the way forward with the EPA talks in West Africa.

This seminar, according to the EU, follows from the ‘‘difficult period’’ in the final months of last year when most of the region declined to sign an interim EPA.

Will the Bamako meeting smooth out the bumpy road towards regional integration or lead to further divisive results ? Idzenga spoke to IPS from Bamako on May 29, saying, ‘‘this information seminar is a good example of the pressure the EC is putting on actors in the region in terms of imposing their (the EC’s) calendar and issues.

‘‘In the programme, there is an entire slot on investment when investment has been something the region has said it does not want to negotiate in an EPA. How does investment get onto a programme on the regional state of play ? I am outraged.’’

*This is the first in a series of two articles. Aileen Kwa is a specialist writer on trade policy who is attached to the non-governmental organisation Focus on the Global South.

 source: IPS