No - but the Europeans are not ready either!

In December last year the ECOWAS refused to sign an Economic Partnership Agreement (EPA) with the European Union (EU), in spite of pressures from the EU to have the agreement go through before the 31st of December 2007. At the time the ECOWAS  declared that it needed 18 months to work things out and that it would be ready on the 30th of June 2009. What is the situation at present with regard to this deadline?

 The Trade ministers of the ECOWAS (Economic Community of West African States) have done some remarkable work. Today they are able to submit proposals to the EU which take West African interests into account and which are compatible with WTO regulations. Here are the three main points of the ECOWAS bid to the EU:

1.      The ECOWAS is prepared to open up 60% of its market to its European counterpart, whilst the 40% sensitive products would remain excluded from competition. And this on the grounds that there are some good reasons for refusing the interpretation that the EU has imposed on Ivory Coast, i.e. to liberalise 81% of its market and setting this as a precedent for all ECOWAS members. Today it is generally recognised that Article XXIV of the GATT (on which the European proposal was based) is fairly flexible and that it is difficult to maintain that the West African proposal is not in compliance with WTO rules.

2.      In addition West Africa sets out a period of 25 years for the fulfillment  of such liberalisation.

3.      Finally, the Cotonou Agreement specifies that the objective of the EPA is to give support to regional development. Therefore the ECOWAS Heads of State have given mandate to senior officials in the region to act along these lines. They therefore recently recalled that there could be no EPA on June 30th this year without the inclusion of a development programme in the text. A document has been prepared, stating that the pace of liberalisation will be linked to the financing of such a programme. (PAPED = an EPA development programme). However there is not unanimity within the civil society as to the terms of the programme. Some find that it does not set the stakes high enough. The funds, €9.5 billion over a 5 year period, are seen to be insufficient. But, as the saying goes, at least it has the merit of existing!

According to the latest news the Europeans accept none of these three main points, essential to the ECOWAS,  as they stand at present.

Thus we may say that

Europe is not prepared to sign an EPA in its present form. Negotiations will therefore continue!

Can we say that the ECOWAS is ready? To tell the truth the ECOWAS is not ready either!

Its difficulties stem from the fact that a certain level of regional integration should be achieved before the signing af an agreement.  How could an EPA be concluded which aims at facilitating regional integration as long as the member states have not come to an agreement on a system and a level of protection (in particular a Common External Tariff) and a series of joint policies (as the ECOWAP in agriculture, which ought to be followed by an industrial policy, an environmental policy ..) as an expression of a common vision for the future of the region.

For instance the negotiations on a Common External Tariff are yet at a standstill. Member States have agreed on the introduction of a 5th tariff band of 35%, but not on which products should be covered by this band.

Together with others we remain convinced that a customs tariff below the 50% level will not make it possible to ensure protection for some sensitive products, such a milk. The price of milk is now plummeting dramatically in Europe and in the world ! (See: "Crise du lait: vers une mondialisation des prix? ")(fr).

Therefore we believe that it is extremely urgent for the ECOWAS fo undertake the necessary steps to strengthen its customs union at the WTO and obtain recognition as a legal person there. As such it will be able to establish common bound customs duties for the entire region. As we have previously stated the ECOWAS should have no difficulty in adopting bound 73% customs duties and other levies of 58.1%. "In other words a total of bound customs duties of 131.5%"

When this is done the ECOWAS would be much more at ease in its negotiations with the EU. Even if its CET is not perfect, or only partially in place, it would have good leeway in talks at the WTO and therefore also in regard to its other trading partners.

On the other hand the ECOWAS should not be in a hurry to restart negotiations. On June 30th this year it could merely note, together with the EU, that several points of disagreement remain to be settled: It could suggest a pause in negotiations, with the commitment to take up the talks again once the negotiations of the WTO Doha round have been concluded. Needless to press on, while there is no agreement within the WTO.

In order to prevent the interim agreement with Ivory Coast to endanger the regional integration, the ECOWAS could ask Ivory Coast to notify the Euroopeans (who never cease to repeat that regional integration is one of the objectives of the EPA) that it will start its liberalisation six months after the end of the Doha Round.

It should be pointed out that we have drawn much of the content of this newsletter from the recent co-ordination and discussion seminar held in Ouagadougou with Burkinabe members of parliament on the 20th of May. Many of our ideas reported here are now also shared by the MPs at the seminar. And this is of some comfort to us !

Koudougou, May 22nd 2009

Maurice Oudet

Director, SEDELAN