Bridges Weekly Trade News Digest • Volume 13 • Number 2 • 21st January 2009
EU, Cameroon Ink Trade Deal as ‘Stepping Stone’ to EPA
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The European Union and Cameroon signed an interim bilateral trade agreement last week, which the EU billed as a positive step toward a broader regional deal.
The agreement, which was signed on 15 January, will give Cameroonian exports duty-free and quota-free access to the European market. In turn, Cameroon has agreed to lift tariffs on 80 percent of EU imports over the next 15 years. The agreement also includes provisions to streamline customs procedures, and additionally promises development assistance from the EU to help Cameroonian producers meet EU import standards and compete with their European counterparts.
In time, Brussels aims to establish a far-reaching trade agreement with a regional bloc that includes Cameroon along with seven other Central African countries (Central African Republic, Chad, Congo, Democratic Republic of Congo, Equatorial Guinea, Gabon, and São Tomé e Príncipe). Trade between Europe and Central Africa is worth roughly 11 billion Euros, according to the EU Trade Commission, and the balance of trade is tilted toward Central Africa.
The EU is in similar regional-level negotiations with several other coalitions of developing nations (largely former European colonies) around the globe in an effort to render preferential trading schemes compatible with WTO rules.
A series of non-reciprocal trade preferences was authorised under the Cotonou Partnership Agreement, a deal signed in 2000 by all EU member states and ministers from more than 70 African, Caribbean and Pacific countries. But when that agreement expired at the end of 2007, Brussels had to find other means of continuing the preferential treatment without breaking world trade rules.
They decided that pursuing a series of regional-level Economic Partnership Agreements, or EPAs was the way forward.
Yet after several years of talks, to date only one full-fledged EPA, between the EU and the CARIFORUM bloc of Caribbean countries, has been enacted, although interim bilateral deals have been signed with Côte d’Ivoire, Cameroon, and have been tentatively agreed upon with Ghana (see BRIDGES Weekly, 18 September 2008, http://ictsd.net/i/news/bridgesweekly/29488/).
Despite the slow progress, European leaders continue to express their commitment to following through on the regional-level negotiations.
“I am strongly committed to pursuing and concluding regional negotiations in Central Africa and this agreement should be seen as a milestone on the path to the successful conclusion of a regional Economic Partnership Agreement with Central Africa,” EU Trade Commissioner Catherine Ashton said in a statement.
An EU memo posted last week on the Trade Commission’s website called the recent deal a ‘temporary solution’, and declared that “the full EPA will entirely replace this interim agreement.”
Some sceptics, however, say that if EPA negotiations continue to stall, such ‘interim’ deals could become permanent, or at least long-lasting, by default.
EPAs: Friend or foe of development?
But while government officials champion the EPAs, some civil society groups and development campaigners have warned that prematurely opening up markets to a deluge of European imports could destroy fledgling industries and undermine the countries’ growth prospects.
The UK-based charity group Oxfam International has been an especially outspoken critic of the agreements.
“In a fair deal, Europe would fully open its markets to all exports without demanding reciprocation,” Oxfam’s Mouhamet Lamine Ndaiye said in April upon the release of an Oxfam report criticising Brussels’ stance in the talks.
“It would give developing countries the policy freedom to govern in the public interest and pursue regional integration on their own terms. And it would assist these countries to become more competitive, generate decent jobs and access new technologies.”
But some argue that greater market opening can kick-start developing country economies, and that safeguards and development aid can help ease the transition toward a more liberal trade regime.
“Economic partnership agreements encourage developing countries to benefit from global trade, while maintaining a certain level of protection for some of their key interests,” EU Development Commissioner Louis Michel said in a statement last week. “I trust this agreement with Cameroon will pave the way for the regional integration sought after by Central African countries. It has a very strong development element that will support the implementation of reforms necessary for this regional integration.”
A group of African trade and finance ministers weighed in on the issue themselves in April, and spelled out their concerns and priorities in no uncertain terms.
In a declaration signed in Addis Ababa, the ministers identified several ‘contentious issues’ in the interim agreements, including how the terms ‘substantially all trade’, ‘transitional periods’, ‘national treatment’, and ‘infant industry’ – among others – should be defined.
The ministers also urged the EU to provide ‘adequate and predictable additional resources’ – above and beyond those offered through the European Development Fund – to help developing nations build infrastructure and adjust to the new economic conditions created by the deals.
The officials further called for the deals to include an appropriate level of ‘asymmetry’ to account for the economic differences between the EU and its developing country trading partners.
The extent to which such concerns might be reflected in a regional-level agreement remains to be seen. Technical-level negotiations toward a full-fledged EPA between the EU and the Central African bloc are set to resume before the end of the month. Continued points of disagreement include export taxes, regional levies, and rules of origin, according to an EU memo on the talks. Officials are also weighing the possibility of including a separate chapter on forest governance, given the importance of the forest sector in the region.
ICTSD reporting.
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a deal which will help cameroon to strengthen its economy