Brussels — 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."
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Neo-colonization is taking steady shape in Africa.This agreement between Ivory Coast and the EU is not in the interest of West Africa and Africa at large.I advise that Ivory Coast's neighbors take immediate steps to discourage dutiy-free goods imported from European Union countries through Ivory Coast from entering their countries.If this is allowed to happen,it will deprive them of badly needed revenue from import duties. poverty,disease,illetracy,hunger,political instability are not the main problem Africa has to address:it is neo-colozination which will always deprive africa the means to get rid of henger,diseases,poverty,etc.
There must be something inherently wrong with this concessionary deal that Cote d'Ivoire signed with the EU. I do believe that earlier this year, the ECOWAS countries were unanimous in rejecting such overtures that could destabilize the economy of the entire region. The fear expressed by the EU is the overall influence that Nigeria was wielding on its sister countries, to the degree that ECOWAS countries are becoming less dependent on the EU, and more interdependent on each other. For Ivory Coast to agree to an 80% reduction of taxes levied on imports, the result would lead to massive importation of cheap and "gray market" goods, and/or contrabands which many European countries would not even allow to be sold in their respective countries. The Chinese, as well as Indians or cheap products from the Asian Sub-Continent will find their way into Cote d'Ivoire by using ficticiously registered companies from EU countries to allow such shipments to find their ways into the country. Cote d'Ivoire will be saddled with unfavourable balance of payment problems. This will spell doom to an economy which has been ravaged by war, and are just recently trying to find its footing in the globalized economy. With cheap products comes criminal elements from neighbouring countries who would see Cote d'Ivoire as a country to smuggle cheap goods from. Any attempt to develop local industries would be weakened because the economies of scale would far outweigh the need for alternative and competing industries. In the end, a 15-year concession for a supposedly free trade deal would be equivalent to 100-years of economic slavery. For an economy that is just about to define itself, and to create a lasting industry for a sustainable growth and employment for its citizens, the few local products such as coffee, bananas,and cocoa which the country is using as a justifiable reason to slash 80% tax levy on foreign imports is not worth its weight in salt. The trade-offs in real terms is very disproportionate and the odds are stacked against Cote d'Ivoire and its citizens. The previous commentary described this agreement as neo-colonialism. I would classify this as the equivalence of Japanese Kamikaze. The EU has everything to gain, and nothing to lose. Had Cote d'Ivoire been a major producer of coffee, banana, and cocoa in the world to the degree that the impacts made by other producers of the same products would be deemed negligible, I can see the rationale for this Agreement. But, from the ECOWAS countries alone, not to mention similar products coming from East Africa's Kenya, Uganda and the Congo, and/or, even countries from Central America and the Caribbean, this Agreement is bad for the ECOWAS countries. I fully agree with Chibuzo Nwoke of the Nigerian Institute of Int'l Affairs. This is worse than playing the double role of partner and umpire. And for Beberage manufacturers to attempt to relocate their entities from Nigeria to Ghana, not only looks like the "divide and conquer" syndrom which Africans have often accused the EU as a methodology, or a precursor to destabilization, but, it seems to serve as a warning to Nigeria, that it should desist from playing the "Big Brother" role. I would caution though, that a destabilized ECOWAS would spell trouble for the EU, as more and more migrant workers would land on the shores of the EU in search of jobs. Meanwhile, African countries spend all their resources in training their citizens in their various countries, and the ultimate beneficiaries of these talents, be they in medicine, law, engineering, agriculture, and other allied fields of endeavour would be the EU. Cheap labour would be rife for employment, with their wages so deplorable that many can hardly make it on a day to day basis in these countries. It is sometimes very depressing to observe highly educated African professionals doing odd jobs in the EU as Security Guards, Taxi Drivers, Cleaners, Waiters in restaurants, etc, etc, only because they are not welcome in the EU corporate environment. This type of trade deal that Cote d'Ivoire has signed is bad for the entire continent and truly a slap in the face of all well-meaning and good thinking Africans. I do hope the Ivorian Congress would reject this deal.