Bridges Weekly Trade News Digest • Volume 14 • Number 12 • 31st March 2010

West Africa and EU Make Modest Progress in Trade Talks

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A group of West African countries and the European Union (EU) crept closer to reaching a trade deal during negotiations in Brussels last week, although long-standing disagreements remain.

The Economic Community of West African States (ECOWAS) - a regional group of 15 countries that is joined by Mauritania in these talks - is one of five African bodies negotiating Economic Partnership Agreements (EPAs) with the EU. The negotiations mark a complex effort to arrive at trade arrangements between Europe and many of its former colonies in the African Caribbean and Pacific (ACP) states.

Historically, the EU has granted ACP countries better market access than it provides to other developing countries; however WTO rules require that this arrangement be reciprocal. In other words, the ACP states must also open up their markets to EU exporters.

In a rush to meet an end-2007 deadline, Côte d’Ivoire and Ghana initialed so-called interim EPAs - deals that would be replaced by a full regional agreement with the EU. Since then, negotiations at the ECOWAS-EU level have progressed slowly.

One of the more contentious issues in the negotiations is how much the West African countries must open up their markets to European imports. The WTO demands that regional free trade agreements - such as the EU-ACP EPAs - must cover “substantially all trade” and be implemented in a reasonable amount of time. But the lack of specifics has led to widely diverging interpretations as to what percentage of trade must be liberalised and over what period.

At the meeting on 22-26 March in Brussels, ECOWAS tabled a new market access offer that would open about 70 percent of their tariff lines and volume of trade over a 25-year period. EU officials have acknowledged the proposal but they have also indicated that they would like to see the tariffs brought down more quickly.

Meanwhile, the EU and ECOWAS remain at loggerheads over a controversial Most Favoured Nation (MFN) provision. The EU has pushed for an MFN provision in the EPA that would grant it the same treatment that ECOWAS countries provide to “major trading partners” in other FTAs. In Brussels, the EU proposed a list of 22 countries that each account for more than 1 percent of world trade. The list includes major emerging economies such as China, India, Brazil and Indonesia.

ECOWAS is uneasy with the proposed provision, fearing it will inhibit West African countries from pursuing agreements with major developing countries. Under the EU proposal, for instance, any trade preferences granted between a West African country and China would also have to be passed on the EU. ECOWAS wants to limit the MFN clause to developed countries.

ECOWAS is also pushing the EU to remove agricultural subsidies that it believes are having a negative impact on West African farmers. However, the EU says there is little political appetite for further concessions on agricultural subsidies within the WTO negotiations. At the meeting in Brussels, the parties did agree to set up a contact group that would analyse the economic impact of the EU agricultural subsidies on West Africa.

Dates for the next negotiations have not been set.

ICTSD reporting.