Trade Negotiations Insights • Volume 8 • Number 5 • June 2009

The ECOWAS EPA: A ‘Funeral Oration’ to Regional Integration?

by Ken Ukaoha

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Côte d’Ivoire’s recent signing of a bilateral Economic Partnership Agreement (EPA) with the EU poses a lethal challenge to the successful conclusion of a regional EPA between the EU and the Economic Community of West African States (ECOWAS). When considered alongside the possibility that Ghana will soon follow suit with its own EPA, the Ivoirian deal represents an ominous threat to regional integration within the West Africa region, setting ECOWAS up as the first casualty of the EPA.

One important hypothesis on which this prediction is founded is that most of the issues that Côte d’Ivoire and Ghana have agreed in their interim agreements are either being re-negotiated by ECOWAS or have already been rejected by some of its member countries. Given these differing standards, it is not clear whether Brussels would be willing to give up more concessions or re-negotiate those areas and sectors in which it had already secured ‘a better deal’ with Côte d’Ivoire and Ghana. If the EU is so magnanimous as to accept anything less, would it also be ready to give in to West Africa’s demand for no more than 60 percent liberalisation in its market access offers? It is instructive to note that the EU reportedly rejected an offer of 70 percent from CEMAC, the Central African group, which is higher than that proposed by ECOWAS. Is there any foreseeable meeting point? Is the EU ready to accept West Africa’s assertion that the EU’s commitment on the EPA must extend beyond 2020, when the Cotonou Agreement - which now governs development cooperation and political relations between the EU and a number of African, Caribbean, and Pacific countries - will expire?

Sensitive issues unresolved

It may prove difficult for both parties to reach an agreement on salient issues such as the separation of tax instruments from the text of the agreement, as well as on contentious issues regarding export and re-export taxes within the region. Intellectual property could also prove to be a challenging area of the negotiations, as the EU wants the agreement to include a provision on bio-technology licensing, which ECOWAS has declared ‘a no go area’. Would the EU be ready to reconsider the controversy concerning the services sector, in which they want to have immediate liberalisation commitments from West Africa? West African officials want to be allowed three years to properly evaluate the region’s capacity and potential before making commitments; some countries in the region are not ready to go beyond their multilateral commitments on this sector. And finally, controversies will likely arise over the possibility of an agreement on Rules of Origin, especially with regard to the cumulation and control of origin of goods between both parties.

Taking the questions further, it is unclear how the parties are working to solve the technical problems of linking the sensitive products list with the recently adopted Common External Tariff (CET) and the fifth tariff band of 35 percent. How are parties handling the Herculean task of harmonising the CET with liberalisation schedules, as well as with the categorisation of products under the tariff nomenclatures? How are parties working out solutions to the issues of non-tariff barriers and sanitary and phytosanitary (SPS) concerns? The parties will need to support the development of related infrastructure such as laboratories for products testing and traceability, which do not now exist in West Africa. Should such infrastructure be put in place before or after an agreement is finalised?

Averting the ‘funeral’

Such questions must be answered within the context of the deadline of June 2009 that has reportedly been agreed upon by the parties for the signing of a West Africa-EU EPA. But only when clear answers to the questions outlined above are provided, can the ‘funeral’ prophesied in this essay’s introduction be averted. The connotation and the nuance of this forecast must be linked to the fact that there is an agreement in principle that commits both parties to set aside the interim agreements by the two West African countries when and only when a regional agreement takes effect. The question then is, could there be a possibility of providing solutions to the aforementioned divergences, tasks and commitments to get the clear outlines of an agreement in the next year, if not the next few months? In the event that it is not possible to meet such a deadline, it is not clear whether the EU would be ready to wait for West Africa until the latter is able and ready to clear the mist for a comprehensive regional agreement. Impatience among officials in Brussels would certainly signal a formal announcement of the obituary of ECOWAS.

It must be noted that West Africa is the only ACP region where an EPA is being negotiated by two regional institutions, namely, ECOWAS and the West African Economic and Monetary Union (UEMOA). There have been several calls for a merger of UEMOA and ECOWAS, and some of us, in recognition of the giant strides that UEMOA has made in fostering economic integration of its eight member countries, had sincerely advocated that UEMOA be subsumed into ECOWAS to become the economic arm of the entire 15-member group of West African countries. But this proposal has not been warmly received by many West African leaders.

Cote d’Ivôire, Ghana and the West African fairy tale

With Cote d’Ivôire’s signing of its unilateral EPA with the EU and Ghana likely to do same, what would remain of West Africa in the equation of trade and regional integration? The only thing remaining would be a fairy tale beginning with the words “once upon a time…” Indeed, the story would likely continue “…there were efforts at promoting a regional CET, but that dream was shattered by the EPA;” or “once upon a time, an EPA was established and the dream of a Customs Union in West Africa was cut short;” or “once upon a time, there was an ECOWAS Trade Liberalisation Scheme (ETLS) and its protocol was unwittingly abolished when the turbulence of the EPA could no longer be managed;” or “once upon a time, the Common Currency approach for the region aimed at fostering trade and economic integration was struck down by the thunder of an EPA;” or “once upon a time, the UEMOA and ECOWAS Commissions became redundant and almost irrelevant, courtesy of the disorganisation brought about by the non-application and or implementation of the abovementioned regional frameworks and policies. Soon the centre could no longer hold and consequently, things began to fall apart even in terms of political integration within the West African region.”

The fairy tale would effectively mean a legal collapse of the treaties that established these bodies. Multiplicity of regional trade regimes would be created in West Africa. The various Community sectoral frameworks and policies such as the Common Agricultural Policy - ECOWAP, Common Industrial policy, Common Investment Policy, Common Competition Policy, etc., would all become vestibules to oblivion. Their efforts as well as the funds utilised in their design and promotion would forever go down the drain. As for the regional institutions created out of the need for a healthy economic and prosperous West Africa such as the ECOWAS Parliament, ECOWAS Court of Justice, etc, would also become irrelevant.

Nigeria remains key to regional integration

Nigeria still stands as the saving grace for regional integration in West Africa in the face of the EPA, and is being looked up to as an important leader by all the countries in the region. There are four possibilities and options available for Nigeria in the face of the current entanglement. One is that Nigeria could remain under the current GSP arrangement deciding not to go further than that since little is being lost in relation to the country’s total export basket. The second is that while others are struggling in a state of confusion, Nigeria can still wait patiently for the next round of GSP+ application, clearing the way to being granted the status by 2010. The third possibility is that Nigeria could ‘go solo’ by adopting the example set by South Africa’s Trade Development and Cooperation Agreement, which would apparently mean towing the line of Cote d’Ivoire and Ghana. The fourth option is that Nigeria could gather the remaining 13 LDCs in West Africa and plan to negotiate a regional package with the EU, taking into account the peculiarities of the various countries in the marriage.

Notwithstanding the above scenarios, Nigeria still finds joy in ensuring that all member states of ECOWAS stay connected in the same train along the journey. In doing so, Nigeria has been able to provide pro-poor input into the potential ECOWAS-EPA text - something no other country has been able to do. Nigeria is not producing a text of its own, as some people have erroneously suggested. Nigeria has no intent to negotiate a solo EPA with the EU for now. Rather, Nigeria is trying to influence and add a push to the process by providing the required leadership for ECOWAS to move toward a pro-development EPA, as directed by the Ministers of ECOWAS during the Nouakchott Ministerial in February 2008.

All ECOWAS member countries, as well as civil society, the private sector, the two ECOWAS and UEMOA Commissions, as well as the EU must buy into this project in good faith with a view to supporting the survival of West Africa. This is the time for the African Union to stand up in defence of one of her own; if it fails on that front, Africa will hear the song “Good night UEMOA! Good night ECOWAS! Good bye regional integration”!

Author

Ken Ukaoha is President of the Nigerian Association of National Traders (NANTS)