The Economic Partnership Agreements and the Central African Region: Challenges and Prospects - Chofor Che

The Economic Partnership Agreements and the Central African Region: Challenges and Prospects - Chofor Che

Economic Partnership Agreements (EPAs)are special agreements to put in place a free trade area(FTA) between the African, Caribbean and Pacific Group of States (ACP)and the European Union(EU). According to Wikipedia, the Free Encyclopedia, EPAS are an answer to ongoing criticism that the discriminating and non-reciprocal preferential trade agreementspresented to Africa especially by the EU are not in line with rules of the World Trade Organisation (WTO). The EPAs are a major component of the Cotonou Agreement, the most current in the history of ACP-EU Development Cooperationand were supposed to go operational in 2008.

The Central African Region is one region of interest to the EU. The EU is presently in negotiations for an EPA withCameroon. Cameroon and the EU agreed on an interim Economic Partnership Agreementin 2007. According to a report in Jeune Afrique dated the 11 of July 2014, this agreement was adopted by the European Parliament in June 2013 and ratified by Cameroon in July 2014. According to the European Commission this agreement is supposed to furnish duty-free, quota-free EU access for all goods from Cameroon to Europe. This agreement is supposed to also gradually eradicate duties and quotas over 15 years on 80% of EU exports to Cameroon. Apart from trade in goods, the interim agreement also focuses on institutional issues, dispute settlement and aid for trade. The European Commission adds that the EPA also includes "rendezvous" clauses giving room for additional negotiations on other trade-related matters such as intellectual property and competition policy.

Cameroon is not the only country in the Central African region the EU is interested in. The EU is equally interested in establishing EPAS with Chad, the Central African Republic, Congo, Equatorial Guinea, Sao Tome and Principe, the Democratic Republic of Congo, and Gabon. Congo (Brazzaville) and Gabon are yet to sign EPAs with the EU. According to the World Bank, Congo does business with the EU under the EU's Generalised Scheme of Preferences, as an upper-middle income state. Gabon is no longer qualified for the new Generalised Scheme of Preferences scheme as of 1 January 2014.

The European Commission adds that as Least-Developed Countries, the Central African Republic, Chad, the Democratic Republic of Congo, Equatorial Guinea and São Tomé all benefit from duty-free, quota-free EU access under the EU's "Everything but Arms" scheme.

There is no gainsaying that regional integration remains a great hurdle for the economies in the Central African region. Compared to other regional groupings like the Economic Community of West African States, the Southern African Development Community, the East African Community, the Caribbean Community + Dominican Republic (CARIFORUM)and the Pacificregion, the Economic Community for Central African States (ECCAS) remains the weakest. Part of the reason for this melee is because of poor governance, the non encouragement of interstate trade within the region and porous economic policies such as double taxation.

The European Commission concurs that imports from the EU into the Central African region are dominated by vehicles, pharmaceutical products, machinery, equipment, mechanical appliances, foodstuffs. Still according to the European Commission, oil dominates (70%) of exports to the EU from the Central African states. The only state in the region that does not export oil to the EU is the Central African Republic. Other major exports from Central African states are wood, copper, bananas, diamonds and cocoa.

The ongoing negotiations for comprehensive EPAS between Central Africa and the EU are laudable, but there remain serious challenges especially at the level of individual states.  In the aforementioned report by Jeune Afrique dated the 11 of July 2014, Protais Ayangma Amang, a Cameroonian activist argues that there is no fiscal compensation envisaged in the eventuality of financial losses on the part of the Cameroonian government. The government of Cameroon estimates a loss of about 1500 billion Frs. CFA (2, 3 billion Euros) in 2020 and around 2500 billion CFA Frs. (3, 8 billion Euros) by 2030. This will be a great destabilizing factor for markets within the national territory.

It is thus clear that there is need for fair trade negotiations to be arrived at by the EU and Central African states. In as much as Central African states demand for fair trade conditions, it is also germane for issues like corruption and heavy taxes to be revisited in the region. Central African states thus need to reform their governance systems so as to better benefit from EPA agreements.

Chofor Che is an integral part of the Africanliberty’s Voice of Liberty initiative. He is also a Doctoral Law candidate at the Faculty of Law, University of the Western Cape and blogs at http://choforche.wordpress.com/

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