Europe is proposing the Economic Partnership Agreement (EPA) to West Africa. While other countries in the region have accepted the free trade agreement, Nigeria and Gambia are holding back. For starters, the EPA is a free trade agreement between the 15 countries of the Economic Community of West African States (ECOWAS) and the Europe, seeking to enable West African countries access the European market and vice versa, without paying tariffs. Europe is committing 6.5 billion euros every five years beginning from 2015-2019 to the scheme, including during the 20-year transition period that will end in 2035.
The EU will open its market completely from day one, while West Africa will remove import tariffs partially over a 20-year transition period once the deal is ratified. For agricultural products or finished consumer goods currently produced in West Africa or for which the region plans to develop production capacity, West Africa will not reduce its import duties. The EU says the EPA will improve ‘rules of origin’ only for West Africa, making it easier to consider goods sourced and transformed in various countries of the region as West African goods benefitting from free access to the EU market.
The EU further says that it will support West Africa’s economic development, industrialisation and job creation, through a body called ‘Competitiveness Observatory’, which will monitor and assess, based on clear indicators, the implementation and impact of the EPA on the economies of the West African countries. However, Nigerian manufacturers say it is an obnoxious trade agreement that will decapitate industries, as Nigerian cannot compete with Europe at the moment.
According to the Manufacturers Association of Nigeria (MAN), Nigeria and West Africa are not in a position to conclude a reciprocal trade relationship, saying that the EPA is structured to limit the growth of manufacturing in West Africa, particularly in Nigeria. Last week, the federal government temporarily put the kibosh on the EPA by stating that “unless Nigeria has an agreement that is favourable to us, unless we have an EPA that will not endanger our businesses, we will not be signing it.”
This could hurt Europe but it also could hit Nigeria’s export to the EU as it could be subjected to the World Trade Organisation (WTO) standard tariffs, which are very high. What is, therefore, required is a re-negotiation that will guarantee that local industries are protected while ensuring an open border for certain types of European products.
Source : BusinessDayOnline